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                                                       Calendar No. 346
104th Congress                                                   Report
                                 SENATE

 2d Session                                                     104-241
_______________________________________________________________________


 
   AMENDING THE INDIAN GAMING REGULATORY ACT, AND FOR OTHER PURPOSES

                                _______


   March 14 (legislative day, March 13), 1996.--Ordered to be printed

_______________________________________________________________________


    Mr. McCain, from the Committee on Indian Affairs, submitted the 
                               following

                              R E P O R T

                         [To accompany S. 487]

    The Committee on Indian Affairs to which was referred the 
bill (S. 487) the Indian Gaming Regulatory Act Amendments Act 
of 1995 having considered the same, reports favorably thereon 
with an amendment and recommends that the bill (as amended) do 
pass.

                                Purposes

    The purpose of S. 487 is to ensure the rights of Indian 
tribal governments to conduct gaming activities on Indian lands 
consistent with the United States Supreme Court decision in 
California v. Cabazon Band of Mission Indians, 480 U.S. 202 
(1987), to provide a more comprehensive statutory basis for the 
conduct and regulation of gaming activities on Indian lands, 
and to establish minimum Federal standards for the conduct of 
gaming activities on Indian lands.

                               Background

    On March 2, 1995, Senators McCain and Inouye introduced S. 
487, the Indian Gaming Regulatory Act Amendments Act of 1995. 
Senator Campbell joined as a co-sponsor of the legislation on 
August 1, 1995. During the previous three years, Senators 
McCain and Inouye met with representatives of State and tribal 
governments to discuss amendments to the Indian Gaming 
Regulatory Act of 1988 (IGRA). This three-year process also 
included consultation with representatives of Federal agencies 
that are charged with various responsibilities associated with 
Indian gaming or law enforcement. In these discussions with 
State and tribal governments, a wide variety of proposed 
amendments to IGRA were discussed. Although there was general 
agreement supporting increased Federal regulation of Indian 
gaming, neither the States nor the tribes could agree on 
specific legislation to accomplish this objective. S. 487 was 
introduced to continue the discussions among the parties 
regarding amendments to the Indian Gaming Regulatory Act. It 
reflects many of the positions considered during the 
discussions between the Indian tribes and States.
    In order to properly consider the issue of Indian gaming, 
there must be a review of the legal and constitutional basis of 
Indian gaming. The authority of Indian tribal governments to 
conduct gaming activities on Indian lands arises out of their 
status as sovereign governments and the well-established legal 
principle that, absent an express authorization by the United 
States Congress, state laws do not apply on Indian lands. The 
legal foundation of Indian gaming was addressed by the U.S. 
Supreme Court in its 1987 ruling in California v. Cabazon Band 
of Mission Indians.

                            Cabazon Decision

    On February 25, 1987, the U.S. Supreme Court issued its 
decision in California v. Cabazon Band of Mission Indians, 480 
U.S. 202, 107 S. Ct. 1083, 94 L. Ed. 2d 244 (1987). This case 
involved the Cabazon and Morongo Bands of Mission Indians of 
Riverside, California. At the time of the case, both tribes 
were operating high stakes bingo games and card rooms which 
were open to the general public. These games were conducted 
pursuant to tribal ordinances that had been approved by the 
Secretary of the Interior. The issue presented in the case was 
whether the State of California and the County of Riverside 
could apply their regulatory authority and ordinances to the 
tribal gaming operations which were located wholly within the 
Cabazon and Morongo Indian Reservations. In deciding this 
question, the U.S. Supreme Court weighed several factors, 
including the fact that in 1953, the Federal Government had 
granted California limited jurisdictional authority over Indian 
reservations within the State under Public Law 83-280. In 
analyzing whether the State of California possessed the 
authority to impose and enforce State laws regulating bingo and 
card games on the Cabazon and Morongo Indian Reservations, the 
U.S. Supreme Court considered whether the State statutes 
regulating bingo and card games were criminal or civil in 
nature. Under the authority of Section 2 of Public Law 83-280, 
six States, including California, were granted broad criminal 
jurisdiction over offenses committed by or against Indians 
within all Indian Country within those States. However, the 
United States Supreme Court in Bryan v. Itasca County, 426 U.S. 
373 (1976), interpreted Section 4 of that Act to grant these 
States jurisdiction over private civil litigation involving 
reservation Indians in State court, but not to grant general 
civil regulatory jurisdiction to these States. To grant States 
``general civil regulatory power over Indian reservations would 
result in the destruction of tribal institutions and values. 
Accordingly, when a State seeks to enforce a law within an 
Indian reservation under the authority of Public Law 280, it 
must be determined whether the law is criminal in nature, and 
thus fully applicable to the reservation under Section 2, or 
civil in nature, and applicable only as it may be relevant to 
private civil litigation in state court.'' Cabazon, 480 U.S. at 
208. Under Public Law 83-280, those State statutes which were 
determined to be civil/regulatory in nature could not be 
enforced on Indian reservations by the States. In applying this 
analysis to the facts presented in the Cabazon case, the U.S. 
Supreme Court determined that California's statutes regulating 
bingo and card games were not criminal/prohibitory in nature, 
but rather, these statutes were civil/regulatory and therefore 
did not apply to activities on the Cabazon and Morongo Indian 
Reservations. Further, the U.S. Supreme Court found that the 
application of State and Country ordinances to the gaming 
activities on the Indian reservations had been preempted as a 
matter of Federal law.
    The U.S. Supreme Court's decision in Cabazon made clear 
that Indian tribes had the authority to conduct gaming 
activities on reservations unfettered by any State or County 
regulation. This decision recognized the important Federal 
principles of tribal self-governance and self-determination and 
found that these Federal principles preempted the application 
of California civil statutes. At the same time that the Cabazon 
case was being litigated, there was a wide spread growth of 
Indian bingo halls in many parts of the country. The growth of 
Indian gaming increasingly came under congressional scrutiny 
during the 99th and 100th Congresses and was the subject of 
numerous congressional hearings. In response to State concerns 
that Indian gaming activities presented attractive targets to 
organized crime infiltration due to the absence of any 
comprehensive Federal regulation of Indian gaming, Congress 
enacted the Indian Gaming Regulatory Act, Public Law 100-497 in 
1988.

                    The Indian Gaming Regulatory Act

    On October 17, 1988, Public Law 100-497, the Indian Gaming 
Regulatory Act (IGRA) was signed into law by President Ronald 
Reagan. This law established a system for the joint regulation 
of Class II and Class III gaming operations on Indian lands. 
Under IGRA, Class II Indian gaming activities are jointly 
regulated by the Federal government, through the National 
Indian Gaming Commission, and by the Tribal government. Class 
III Indian gaming activities are jointly regulated by the 
Tribal government and the State government pursuant to Tribal-
State Gaming Compacts. Class I Indian gaming activities are 
under the exclusive jurisdiction of Indian tribal governments. 
Class I Gaming is defined as traditional or social games played 
solely for prizes of minimal value or played in connection with 
tribal ceremonies or celebrations. Class II Gaming activities 
are defined in IGRA as bingo, pull-tabs, lotto, punch boards, 
tip jars, instant bingo, and other games similar to bingo, and 
non-banking card games which have not been prohibited by the 
State in which the reservation is located. IGRA defines Class 
III Gaming activities as all forms of gaming that are not Class 
I or Class II Gaming. Examples of Class III Gaming activities 
under IGRA include blackjack, baccarat, parimutuel wagering, 
roulette, craps, and any type of banking card games.
    IGRA established a three member commission within the 
Department of the Interior known as the National Indian Gaming 
Commission (NIGC). The Commission is charged with the oversight 
and regulation of all Class II Indian gaming operations. The 
Chairman of the Commission is vested with the authority to 
issue temporary closure orders, to collect and levy civil 
fines, to approve tribal ordinances or resolutions governing 
Class II and Class III gaming activities, and to approve 
management contracts for Class II and Class III gaming 
operations. The Commission is responsible for monitoring Class 
II gaming operations on Indian lands, which includes the 
authority to inspect and examine all Class II gaming 
operations, and to inspect, examine, and audit all papers, 
books and records of any Class II Gaming operation. The 
Commission is also authorized to conduct or cause to be 
conducted background investigations as required under the Act. 
The Commission has the authority to issue permanent closure 
orders, issue subpoenas, hold hearings and take testimony, and 
receive evidence.
    The IGRA makes clear that an Indian tribal government may 
engage in Class II or Class III gaming activities on Indian 
lands if such gaming is located in a State that permits such 
gaming for any purpose by any person, organization, or entity 
and for purposes of Class III gaming activities, if such gaming 
is conducted pursuant to an approved Tribal-State gaming 
compact. The Act requires all Class II and Class III Indian 
gaming to be conducted pursuant to tribal gaming ordinances 
which have been approved by the Chairman of the National Indian 
Gaming Commission. A tribal gaming ordinance must include 
provisions that ensure the Indian tribe has the sole 
proprietary interest and responsibility for the gaming 
operation. Tribal gaming ordinances must provide that net 
revenues for any tribal gaming operation be used to fund tribal 
governmental operations, provide for the general welfare of the 
tribal government and its members, promote tribal economic 
development, and fund other operations of local government. A 
tribal government may also use net gaming revenues for 
charitable donations. In addition, a tribal government may make 
per capita distributions of gaming proceeds to tribal members 
if the tribal government has a distribution plan approved by 
the Secretary of the Interior. These per capita distributions 
are subject to Federal income tax and the tribal government is 
required to notify the tribal members of their tax liability 
when such distribution payments are made.
    Under the IGRA, all Class III Indian gaming operations must 
be conducted under the authority of a Tribal-State gaming 
compact or under procedures which have been prescribed by the 
Secretary of the Interior. A Tribal-State gaming compact may 
include provisions relating to the application of civil and 
criminal laws and regulations of the Indian tribal government 
or the State government for the licensing and regulation of the 
gaming activity. Compacts may also include provisions that 
allocate civil and criminal jurisdiction between the Indian 
tribal government and the State government. Pursuant to the 
Compact, a State may assess the costs of any enforcement or 
regulatory activities undertaken against the gaming operation. 
Similarly, an Indian tribal government may assess a tax against 
the gaming operation to defray the costs of tribal regulatory 
enforcement activities. IGRA explicitly prohibits a State or 
any political subdivision of a State from imposing any tax, 
fee, charge or other assessment upon an Indian tribe or any 
other person or entity authorized to operate a Class III gaming 
enterprise. Further, IGRA prohibits a State from refusing to 
negotiate with an Indian tribe for a Class gaming compact due 
to the failure to include such taxing authority.
    An Indian tribal government seeking to conduct Class III 
gaming activities on Indian lands is required under the IGRA to 
make a request to the State in which such lands are located to 
enter into negotiations for a Tribal-State gaming compact. Upon 
the request of an Indian tribal government, a State is required 
to enter into good faith negotiations with the tribal 
government for a Class III gaming compact. In the event that a 
State fails to negotiate a gaming compact in good faith, an 
Indian tribal government may file an action in Federal court 
alleging bad faith negotiations on the part of the State. In 
such an action, the State has the burden of proving that it has 
negotiated in good faith with the Indian tribal government. If 
the Court determines that the State has failed to negotiate in 
good faith, the court shall order the State and the Indian 
tribal government to conclude Class III compact negotiations 
within 60 days. The Court may consider the public interest, the 
public safety, criminality, financial integrity, and adverse 
economic impacts on existing gaming activities in determining 
whether a State negotiated in good faith. The Court shall 
consider any demand by the State for direct taxation of the 
Indian tribe or any Indian lands as evidence that the State has 
not negotiated in good faith.
    If a State and an Indian tribal government have failed to 
successfully conclude compact negotiations within the 60 day 
period established by the Court, the State and the Indian 
tribal government are required to submit their respective last 
best offers for a compact to a mediator who has been appointed 
by the Court. The mediator is required to select the compact 
which best comports with IGRA, other applicable Federal laws, 
and the findings and order of the Court. The selected compact 
is then submitted to the State and the Indian tribal government 
for approval. If the State approves the compact, it is 
considered an effective Tribal-State gaming compact on the date 
it was submitted by the mediator to the State. If the State 
fails to approve the selected compact during the 60 day period, 
the mediator notifies the Secretary of the Interior who then 
prescribes procedures under which Class III gaming activities 
may be conducted. These procedures must be consistent with the 
provisions of the selected compact, the provisions of the IGRA 
and any relevant provisions of State law.
    The IGRA also includes provisions that limit the authority 
of Indian tribal governments to conduct gaming activities on 
lands acquired after the enactment of the IGRA. An Indian 
tribal government may conduct gaming activities on lands 
acquired after the enactment of IGRA if such lands are located 
within, or are contiguous to, the tribe's existing reservation. 
For Indian tribal governments located in Oklahoma which have no 
reservation, gaming can be conducted on after-acquired lands if 
such lands are within the boundaries of the tribal government's 
former reservation, or are contiguous to trust allotted lands. 
For Indian tribal governments located outside of Oklahoma which 
have no reservation, gaming can be conducted on after-acquired 
lands if such lands are located within the tribal governments 
last recognized reservation. An Indian tribal government may 
petition the Secretary of the Interior to conduct gaming 
activities on lands acquired after the enactment of IGRA. The 
Secretary must determine that the conduct of gaming on such 
lands is in the best interest of the Indian tribe and its 
members and is not detrimental to the surrounding community. In 
making this determination, the Secretary must consult with the 
Indian tribal government and appropriate State and local 
officials, including officials of any nearby Indian tribes. An 
Indian tribal government may only conduct gaming on these lands 
if the Secretary determines that it would be in the tribe's 
best interest and the Governor of the State in which such lands 
are located concurs in the Secretary's determination. The Act 
specifies that the limitations on the Secretary's authority to 
bring lands into trust only apply to lands on which gaming 
activities will occur and do not apply to the Secretary's 
authority to bring lands in to trust for purposes other than 
gaming.
    In its consideration of IGRA in 1988, it is clear that 
Congress balanced the competing interests of Federal, Tribal, 
and State governments. It also considered the need for strong 
enforcement of gaming laws and regulations and the Federal 
interest in protecting and preserving the sovereign authority 
of Indian tribal governments. In enacting IGRA, the Congress 
specifically recognized several longstanding principles of 
Federal Indian policy:

          It is a long- and well-established principle of 
        Federal-Indian law as expressed in the United States 
        Constitution, reflected in Federal statutes, and 
        articulated in decisions of the Supreme Court, that 
        unless authorized by an act of Congress, the 
        jurisdiction of State governments and the application 
        of state laws do not extend to Indian lands. In modern 
        times, even when Congress has enacted laws to allow a 
        limited application of State law on Indian lands, the 
        Congress has required the consent of the tribal 
        governments before State jurisdiction can be extended 
        to tribal lands. * * * In determining what patterns of 
        jurisdiction and regulation should govern the conduct 
        of gaming activities on Indian lands, the Committee has 
        sought to preserve the principles which have guided the 
        evolution of Federal-Indian law for over 150 years. In 
        so doing, the Committee has attempted to balance the 
        need for sound enforcement of gaming laws and 
        regulations, with the strong Federal interest in 
        preserving the sovereign rights of tribal governments 
        to regulate activities and enforce laws on Indian land. 
        The Committee recognizes and affirms the principle that 
        by virtue of their original tribal sovereignty, tribes 
        reserved certain rights when entering into treaties 
        with the United States, and that today, tribal 
        governments retain all rights that were not expressly 
        relinquished.\1\
    \1\ (S. Rept. 100-446, 2d session, 1988, at page 5.)

    Under IGRA, the Congress authorized Indian tribal 
governments to negotiate with State governments for compacts 
governing the operation of Class III gaming activities on 
Indian lands. Under these compacts, Indian tribal governments 
and State governments could negotiate the extent of State 
jurisdiction, if any, over criminal violations on the 
reservation, or the amount of State regulation, if any, of the 
tribal gaming operation, or the application of any other State 
laws to the tribal gaming operation. The Congress recognized 
the unique character of the Tribal-State compacts authorized in 
---------------------------------------------------------------------------
IGRA:

          The mechanism for facilitating the unusual 
        relationship in which a tribe might affirmatively seek 
        the extension of State jurisdiction and the application 
        of State laws to activities conducted on Indian land is 
        a tribal-State compact. In no instance, does [this Act] 
        contemplate the extension of State jurisdiction or the 
        application of State laws for any other purpose. 
        Further, it is the Committee's intention that to the 
        extent tribal governments elect to relinquish rights in 
        a tribal-State compact that they might have otherwise 
        reserved, the relinquishment of such rights shall be 
        specific to the tribe so making the election, and shall 
        not be construed to extend to other tribes, or as a 
        general abrogation of other reserved rights or of 
        tribal sovereignty.\2\
    \2\ (S. Rept. 100-446, 2d session, 1988, at page 6.)

    In IGRA, Congress provided State governments with an 
unprecedented opportunity to participate in the regulation of 
Indian gaming activities on Indian lands pursuant to Tribal-
State compacts. IGRA provided this authority to State 
governments to work cooperatively with Indian tribal 
governments in the regulation of Indian gaming in recognition 
of significant State interests in the lawful conduct of gaming 
activities within a State including the paramount concern of 
Federal, State, and tribal governments in preventing the 
infiltration of organized crime in gaming activities conducted 
on Indian reservations.
    IGRA reflected a compromise. It diminished the extent of 
tribal sovereign authority over gaming that had been determined 
by the U.S. Supreme Court in the Cabazon decision, authorizing 
the exercise of some authority by State governments that was 
previously reserved to the Federal and Tribal governments. 
State governors were afforded the right to withhold their 
concurrence in a Secretary of the Interior's decision to hold 
in trust, for the benefit of an Indian tribal government, off-
reservation lands which were acquired by the tribal government 
for gaming purposes. In addition, State governments were 
authorized to enter into compacts with Indian tribal 
governments to determine the terms and conditions under which 
Class III gaming activities can occur on Indian lands.
    Congress utilized the U.S. Supreme Court's reasoning in 
Cabazon to apply the distinction between civil/regulatory and 
criminal/prohibitory laws to the context of Indian gaming. In 
applying this analysis, Congress reasoned:

          [This Act] is intended to expressly preempt the field 
        in governance of gaming activities on Indian lands. 
        Consequently, Federal courts should not balance 
        competing Federal, State, and tribal interests to 
        determine the extent to which various gaming activities 
        are allowed. * * * Finally, the Committee anticipates 
        that Federal courts will rely on the distinction 
        between State criminal laws which prohibit certain 
        activities and the civil laws of a State which impose a 
        regulatory scheme upon those activities to determine 
        whether class II games are allowed in certain States. * 
        * * The Committee wishes to make clear that, under 
        [this Act], application of the prohibitory/regulatory 
        distinction is markedly different from the application 
        of the distinction in the context of Public Law 83-280. 
        Here, the courts will consider the distinction between 
        a State's civil and criminal laws to determine whether 
        a body of law is applicable, as a matter of Federal 
        law, to either allow or prohibit certain activities. 
        The Committee does not intend [this Act] to be used in 
        any way to subject Indian tribes or their members who 
        engage in class II games to the criminal jurisdiction 
        of States in which criminal laws prohibit class II 
        games.\3\
    \3\ (S. Rept. 100-446, 2d session, 1988, at page 6.)

    IGRA requires the Federal courts to review the character of 
State civil and criminal laws governing gaming activities to 
determine whether such laws should act as a bar to Indian 
gaming activities. Where a State's law governing gaming 
activities is determined to be criminal/prohibitory rather than 
civil/regulatory, then such gaming activities may not be 
conducted on Indian lands. Where a State's law governing gaming 
activities is determined to be civil/regulatory, then such 
gaming activities may be conducted on Indian lands subject to 
the terms and conditions of the IGRA. Where a gaming activity 
is not determined to be prohibited as a matter of Federal law, 
the conduct of such gaming activities are not governed by the 
application of State law and regulation; instead, such gaming 
activities are governed by the provisions in the Tribal-State 
compact, or in the case of Class II gaming, pursuant to such 
regulations as may be developed by the Tribal government and 
the National Indian Gaming Commission. This standard is 
entirely consistent with the U.S. Supreme Court's decision in 
Cabazon.

                       Indian Gaming Post-Cabazon

    Since the decision of the U.S. Supreme Court in Cabazon, 
Indian gaming has experienced tremendous growth. In 1987, 
Indian gaming was a $121 million industry (in annual gross 
revenues). In the succeeding years, that figure has grown to 
$2.6 billion. Since 1985, the Indian gaming industry has 
experienced an average annual growth in gross revenues of 
approximately 53 percent. Of the 557 Indian tribes across the 
nation, 115 Indian tribal governments have entered into 131 
approved Class III gaming compacts involving 23 States.\4\ Of 
the 115 Indian tribes with compacts, some tribes have not yet 
established a gaming operation despite having an approved 
compact. In addition, some Indian tribes have more than one 
approved compact with a State and certain tribes may have 
compacts with more than one State. The table below indicates 
the estimated annual gross revenues realized by Class II and 
Class III Indian gaming enterprises since 1988:
    \4\ These figures reflect the number of approved Tribal-State 
compacts as of Mar. 23, 1995, as compiled by the U.S. Bureau of Indian 
Affairs, Indian Gaming Management Staff.

                                  ESTIMATED GROSS REVENUES OF INDIAN GAMING \1\                                 
                                            [In thousands of dollars]                                           
----------------------------------------------------------------------------------------------------------------
                                             1988        1989        1990        1991        1992        1993   
----------------------------------------------------------------------------------------------------------------
Class II Indian gaming..................         N/A         N/A    $388,200    $419,250    $429,000    $435,300
Class III Indian gaming.................         N/A         N/A     100,300     300,900   1,202,600   2,159,600
                                         -----------------------------------------------------------------------
      Total.............................    $121,000    $300,000     488,500     720,150   1,631,600   2,594,900
----------------------------------------------------------------------------------------------------------------
\1\ The figures for the table are based on information compiled by the Congressional Research Service from the  
  Annual Estimates prepared by Christiansen/Cummings Associates, Inc. for Gaming & Wagering Business magazine's 
  July 15-Sept. 14 issues of 1989-92, July 15-Aug. 14, 1993, issue, and Aug. 5, 1994, issue, using the most     
  recent revised figures.                                                                                       

    From these figures it is apparent that since 1988 Class II 
Indian gaming has remained relatively stable with some slight 
growth in gross revenues each year. Over the same period of 
time, the growth in gross revenues for Class III gaming 
operations has increased exponentially. Despite the growth in 
gross revenues, Indian gaming still represents only 7.5 percent 
of the total gross revenues of legalized gambling in the 
Nation. Some of this growth can be explained through the 
increase in the number of Indian tribes operating Class III 
gaming operations since 1990. Additional growth can be 
accounted for by the increased numbers of States which have 
compacted with Indian tribal governments to conduct Class III 
gaming operations.
    Over this same period of time, non-Indian gaming, including 
casino gambling and State lotteries, has also experienced a 
tremendous growth in gross revenues. Since 1988, non-Indian 
casino gambling has grown from $7.16 billion in annual gross 
revenues to $12.54 billion. The average annual growth in gross 
revenues for non-Indian casino gambling in the United States 
since 1985 is 11 percent. Similarly, since 1988 State lotteries 
grew from $8.42 billion in annual gross revenues to $12.82 
billion. The average annual growth in gross revenues for State 
lotteries since 1985 is 12 percent. It is clear that the Nation 
as a whole has experienced a significant expansion of gambling 
since 1985 which has resulted in a steady growth in gross 
revenues to the gambling industry in general. The growth of 
Indian gaming since 1985 reflects an overall trend in the 
growth of gambling within the United States. The chart below 
describes the number of Indian tribal governments with approved 
Class III gaming compacts since 1989:

  NUMBER OF APPROVED TRIBAL-STATE COMPACTS FOR CLASS III GAMING, AND NUMBER OF TRIBES AND STATES WITH CLASS III 
                                                  COMPACTS \1\                                                  
----------------------------------------------------------------------------------------------------------------
                                                                            Cumulative                          
                                     Number of    Cumulative   Number of    number of    Number of    Cumulative
                                        new       number of    new tribes   new tribes   new States   number of 
                                      approved     approved       with         with         with     States with
                                      compacts     compacts     compacts     compacts     compacts     compacts 
----------------------------------------------------------------------------------------------------------------
1989..............................           0            0            0            0            0            0 
1990..............................          14           14           14           14            4            4 
1991..............................          21           35            9           23            3            7 
1992..............................          31           66           29           52            8           15 
1993..............................          36          102           34           86            4           19 
1994..............................          12          114           12           98            3           22 
1995..............................          17          131           17          115            1           23 
----------------------------------------------------------------------------------------------------------------
\1\ The information provided in this chart was prepared by the Congressional Research Service from lists of     
  approved Tribal-State Compacts compiled by the Bureau of Indian Affairs. This information reflects data       
  available through Mar. 23, 1995.                                                                              

    Despite the continued growth of Indian gaming since the 
passage of the Indian Gaming Regulatory Act, the vast majority 
of Indian tribal governments are not involved in any Indian 
gaming operations. There are a variety of reasons why an Indian 
tribal government may not choose to engage in gaming. In recent 
years, Indian tribes, like the Navajo Nation and the Hopi 
Indian tribe, have conducted referendums in which the tribal 
membership elected not to have gaming operations on their 
reservations. Other Indian tribal governments have determined 
that their reservations are too remote and too isolated for a 
successful Indian gaming operation. In some areas of the 
country, the market is already saturated with gambling 
operations, both Indian and non-Indian, and it is not 
economically feasible to locate additional gaming operations in 
that part of the country. Finally, there are a substantial 
number of Indian tribes that are culturally, socially, or 
morally opposed to gaming of any form.
    A number of States have refused to negotiate Tribal-State 
compacts with the Indian tribal governments whose reservations 
are located within their State boundaries. States such as 
California, Florida, Texas, and Oklahoma have elected not to 
negotiate Class III gaming compacts with Indian tribal 
governments. In many cases, the State's election not to 
negotiate compacts with Indian tribal governments is based on a 
fundamental disagreement with the Indian tribal governments 
over the scope of gaming which is permitted by State law. Since 
the passage of the IGRA, the scope of the gaming issue has 
become a major source of disagreement between Tribal and State 
governments. The lack of agreement on this issue has been a 
significant barrier for Indian tribal governments in the 
development of Class III gaming operations on their lands.
    The issue of scope of gaming was presented to the Ninth 
Circuit Court of Appeals in the case of Rumsey Indian Rancheria 
et al. v. Wilson, 41 F. 3d 421 (9th Cir., 1994). In this case, 
the court considered whether the State of California was 
required to negotiate Class III gaming compacts with California 
Indian tribes which permitted electronic gaming devices, live 
banking card games (blackjack, baccarat, etc.), and percentage 
card games. The State of California argued that because these 
types of gaming activities are not permitted in California, the 
State was under no obligation to include these gaming 
activities in compact negotiations with Indian tribes. The 
Indian tribes argued that under the Indian Gaming Regulatory 
Act, the State of California must negotiate for those games 
that do not violate the public policy of the State of 
California. The tribes argued that because California permits 
certain types of Class III gaming activities, it does not 
criminally prohibit Class III gaming but rather merely 
regulates Class III gaming activities, and therefore the tribes 
are entitled under IGRA to negotiate compacts for these gaming 
activities. The Indian tribes also argued that because the 
State of California permits video lottery, parimutuel wagering, 
and non-banked and non-percentage card games, then other types 
of electronic gaming, banking and percentage card games should 
be available for compact negotiations. The Indian tribes 
reasoned that because the types of games permitted by the State 
of California are functionally similar to the electronic gaming 
and banking card games sought by the Indian tribes, then the 
tribes should be permitted to include such games in a Class III 
gaming compact.
    The Ninth Circuit Court of Appeals held that, consistent 
with the U.S. Supreme Court's holding in Cabazon, IGRA required 
a State to negotiate with Indian tribes on those games which 
are permitted by the State for any purpose by any person, 
organization, or entity. The Court in Rumsey found after a 
factual inquiry, that California did not permit banked or 
percentage card games and therefore those gaming activities 
could not be included in Tribal-State Class III gaming 
compacts. The Court also found that if the State of 
California's video keno lottery terminals did not constitute 
slot machines under California law, then Indian tribes in 
California could not negotiate for electronic gaming under 
IGRA. The Ninth Circuit Court of Appeals remanded this portion 
of the case to the district court for a determination of 
whether California permits the operation of slot machines 
through the operation of video keno lottery terminals.
    Another area where State governments have challenged the 
constitutionality of IGRA are the provisions which authorize 
the Federal courts to review the actions of a State to 
determine if a State has negotiated in ``good faith'' with an 
Indian tribal government for a Class III gaming compact. States 
have argued that the provisions of IGRA that subject a State 
government to suit in Federal court and which require a State 
to negotiate in good faith with an Indian tribal government for 
a Class III gaming compact violate the 10th and 11th Amendments 
to the U.S. Constitution. The principle case raising this 
constitutional challenge to IGRA is Seminole Tribe of Florida 
v. Florida, No. 94-12 (1994) which was argued before the U.S. 
Supreme Court on October 11, 1995.
    In this case, the Seminole tribe filed an action in Federal 
court alleging that the State of Florida had failed to 
negotiate in good faith for a Tribal-State gaming compact under 
IGRA. The Seminole tribe alleged bad faith on the part of the 
State due to the failure of the State of Florida to negotiate 
with the tribe for any video gaming or computer-assisted 
gaming. The Seminole tribe argued that because Florida permits 
casino gambling and slot machines, then the tribe should be 
permitted to negotiate for those gaming activities as part of a 
Tribal-State compact. In response, the State argued that the 
tribe's complaint should be dismissed under the 11th Amendment 
to the Constitution because Florida had not waived its immunity 
to suit. The district court denied the State's motion to 
dismiss, reasoning that Congress had the authority to abrogate 
the State of Florida's immunity pursuant to the authority in 
the Indian Commerce Clause \5\ of the U.S. Constitution.\6\
    \5\ Art. 1, Sec. 8, cl. 3, U.S. Const.
    \6\ Seminole tribe of Florida v. Florida, 801 F. Supp. 655 (S.D. 
Fla. 1992).
---------------------------------------------------------------------------
    The Eleventh Circuit Court of Appeals reversed the decision 
of the district court to deny the State of Florida's motion to 
dismiss. In reversing the lower court, the Court of Appeals 
held that Congress could not abrogate a State's immunity to 
suit through the exercise of the Indian Commerce Clause of the 
U.S. Constitution.\7\ The Court of Appeals further found that 
none of the exceptions to the State's 11th Amendment immunity 
were presented in the case. On January 23, 1995, the U.S. 
Supreme Court granted certiorari to hear the case. The issues 
presented to the U.S. Supreme Court are: does the Congress have 
the authority to abrogate a State's immunity pursuant to the 
Indian Commerce Clause of the U.S. Constitution; if a State's 
immunity cannot be abrogated under the Indian Commerce Clause, 
does the doctrine of Ex parte Young \8\ allow the Court to 
order State officials to comply with IGRA. The Seminole case is 
similar to several other cases which have been filed in other 
States where Class III gaming compact negotiations have broken 
down. The U.S. Supreme Court's decision in Seminole will have a 
dramatic impact on the future implementation of the IGRA.
    \7\ Seminole tribe of Florida v. Florida, 11 F. 3d 1016 (11th Cir. 
1994).
    \8\ Ex parte Young, 209 U.S. 123 (1908).
---------------------------------------------------------------------------

    S. 487, The Indian Gaming Regulatory Act Amendments Act of 1995

    S. 487 establishes an independent Federal agency called the 
Federal Indian Gaming Regulatory Commission. The Commission is 
comprised of three full-time members appointed by the 
President, with the advice and consent of the Senate. The bill 
requires one member of the Commission to be a certified public 
accountant and one member to have expertise and experience in 
the field of investigation of law enforcement. It also provides 
that no more than two Commission members may be members of the 
same political party and at least two Commission members must 
be members of Federally-recognized Indian tribes.
    Under S. 487, the Commission is vested with the power to 
establish a rate of fees and assessments for each Class II and 
Class III gaming activity and to conduct investigations, 
including background investigations. The bill also provides the 
Commission with the authority to issue temporary and permanent 
orders closing gaming operations; to grant, deny, condition or 
suspend any license issued under any authority under the Act; 
to inspect Class II and Class III gaming premises; to inspect 
and audit the books and records of any Class II and Class III 
gaming operations; and to assess fines and penalties for 
violations of the Act. In addition the Commission has the 
authority to issue written interrogatories administer oaths, 
serve or cause to be served process or notices, and conduct 
hearings on violations of the Act. Under S. 487, the Commission 
is responsible for the regulation and monitoring of all Class 
II and Class III gaming activities. In carrying out its duties, 
the Commission is authorized to enter into a contract with 
State, tribal or private entities to assist the Commission in 
carrying out its responsibilities. Finally, the Commission is 
authorized to provide training and technical assistance to 
Indian tribes on the conduct and regulation of gaming 
activities.
    S. 487, as introduced, substantially retains the 
definitions for Class I, Class II, and Class III gaming in the 
Indian Gaming Regulatory Act of 1988, and the regulations 
promulgated by the National Indian Gaming Commission to 
implement the Act. The bill provides a framework for the 
regulation of Class II and Class III gaming in conformance with 
minimum Federal standards which are established by the 
Commission. The regulatory scheme created by the bill covers 
all Class II gaming, Class III gaming which is conducted under 
a Tribal-State compact, and Class III gaming which is conducted 
pursuant to a compact negotiated by the Secretary of the 
Interior. Under this scheme, the Commission is vested with the 
authority to enforce violations of the minimum standards 
established under the bill.
    S. 487 establishes an advisory committee to develop 
recommendations for minimum Federal standards on Indian gaming 
which is called the Advisory Committee or Minimum Regulatory 
Requirements and Licensing Standards. The advisory committee is 
composed of 7 members who are appointed by the President. Three 
members of the Advisory Committee must be members of Federally-
recognized Indian tribes which are engaged in gaming under this 
Act, two members are required to be representatives of state 
governments, and two members shall be employees of the 
Department of Justice. The Advisory Committee is responsible 
for the development of recommended minimum Federal standards 
for the conduct of background investigations, internal control 
systems, and licensing standards for all Indian gaming 
operations. Within 180 days of being fully constituted, the 
Advisory Committee is required to submit its recommendations to 
the Federal Indian Gaming Regulatory Commission. Once the 
recommendations have been received by the Commission, the 
Commission shall hold public hearings on the recommendations. 
The bill provides that in developing the recommendations and 
promulgating minimum Federal standards, the Committee and the 
Commission shall consider the unique nature of tribal gaming as 
compared to non-Indian commercial, governmental, and charitable 
gaming; the broad variations in the scope and size of tribal 
gaming; the sovereign authority of Indian tribes to regulate 
their own affairs; and the findings and purposes set out in 
this Act.
    While the bill as introduced maintains the same 
requirements for Class I and Class II gaming that were provided 
in the Indian Gaming Regulatory Act of 1988, the bill modifies 
the requirements for Class III gaming activities. Class I 
gaming would remain under the exclusive jurisdiction of Indian 
tribes and not subject to the provisions of the Act. The 
treatment of Class II gaming would remain unchanged under the 
Act. Class II would remain under the jurisdiction of the 
tribes, but it is subject to regulation by the Commission 
pursuant to the provisions of the Act. The bill maintains the 
requirement that Class II gaming be conducted pursuant to a 
compact. S. 487 retains the process for the negotiation of a 
Class III gaming compact between an Indian tribe and a state. 
However, where Tribal-State negotiations cannot be concluded 
within 180 days from the time an Indian tribe has requested in 
writing that the State enter into negotiations for a Class III 
gaming compact, and where such tribe has specified each gaming 
activity to be included in the compact, then the tribe may 
notify the Secretary of the Interior of the impasse, unless the 
parties have agreed to a longer period of time. Upon receipt of 
the notice, the Secretary requests the State and the tribe to 
submit their respective positions on what should be included in 
the compact, including the types of gaming activities to be 
permitted, the framework for regulating the gaming activities, 
and such other matters as the Secretary deems appropriate 
within 60 days of the request. Not later than 90 days after the 
60 day period has expired, the Secretary is authorized to 
approve a compact which meets the requirements of the Act and 
includes provisions that best meet the objectives of the Act 
for background investigations, internal controls, and 
licensing. The Secretary must ensure that the compact does not 
violate any provision of this Act, any other provision of 
Federal law, and the trust obligation of the Federal 
government. The Secretary may not approve a compact which 
requires state regulation of Indian gaming about the consent of 
the State or the Indian tribe. An approved compact shall be 
published in the Federal Register.
    The bill requires that all gaming operations, key employees 
of gaming operations, management contractors, gaming-related 
contractors, and any person who has material control, directly 
or indirectly, over a licensed gaming operation be licensed. In 
addition, the Commission may require any gaming service 
industry to be licensed. Under the bill, the Commission is 
required to review all management contracts, management fees, 
gaming-related contracts, contract modifications, and existing 
contracts. The bill provides that the Federal Indian Gaming 
Regulatory Commission may derive up to $25 million of its 
operating funds through an assessment of fees from Class II and 
Class III gaming activities not to exceed 2 percent of net 
revenues. The Commission is also authorized to seek 
reimbursements of costs for conducting reviews and 
investigations associated with licensing. In addition, Federal 
appropriations are authorized for up to $5 million for each 
fiscal year from 1997 through 1999. The bill authorizes the 
Commission to impose civil penalties of $50,000 per day for 
each violation of the Act. The Commission is also authorized to 
temporarily close all or part of an Indian gaming operation.
    Finally, the bill as introduced included provisions which 
maintained the Secretary of Interior's authority to take lake 
into trust for gaming purposes at the request of an Indian 
tribe. The bill requires the Secretary to consult with the 
tribe and review the recommendations of the Governor of the 
State in which such lands are located, any state or local 
officials, and any other nearby Indian tribes. In order to take 
such land into trust, the Secretary must determine that the 
gaming establishment on such lands would be in the best 
interest of the tribe and its members and would not be 
detrimental to the surrounding community.

                  Proposed Alternatives to Section 12

    Prior to the July 25th Committee hearing on S. 487, the 
Chairman directed the Committee staff to draft alternative 
provisions for Section 12 of the bill. The alternative 
proposals were intended to address States' concerns regarding 
Section 12. Over the months preceding the July 25th hearing the 
Committee had received numerous letters from State Governors 
and State Attorneys General objecting to the provisions in 
Section 12 of the bill. This section authorizes the Secretary 
of the Interior to act as the mediator in the negotiation of a 
Class III gaming compact when a tribe and a State cannot agree 
on the terms of a compact. Under current law, when a tribe and 
State cannot agree on the terms of a compact or where a State 
has negotiated in bad faith, the Federal court appoints a 
mediator to develop the terms of a Class III gaming compact. 
States strenuously objected to the changes proposed by S. 487 
to the compact negotiation process. In order to address States 
concerns regarding Section 12 and to provide a negotiation 
process that would avoid an impasse in negotiations and result 
in a gaming compact, Committee staff drafted two alternative 
proposals which were then circulated to interested parties.
    The first alternative would provide the State with the 
option to request a binding arbitration proceeding to resolve 
the differences in the positions of the tribe and the State in 
the compact negotiations. Under this proposal, an Indian tribe 
would be required to participate in the arbitration proceeding 
once it has been requested by the State. Both parties would 
jointly select the arbitrator who shall be independent to the 
parties. If the parties could not agree on an arbitrator, then 
the Secretary would appoint the arbitrator from a list of 
qualified arbitrators. The cost of the arbitration would be 
shared by both parties. The final decision of the arbitrator 
would be binding on both parties.
    The second alternative would authorize the Secretary to 
file an expedited action in Federal court for a determination 
of which types of gaming activities are permitted under State 
law. It would permit a State and an Indian tribe to submit a 
compact to the Secretary which leaves unresolved the issue of 
which types of Class III gaming activities are permitted by 
State law. In filing the expedited action, the Secretary could 
request the Federal court to certify the question of which 
types of Class III gaming activities are permitted by State law 
to the highest court of the State. Once the State court makes a 
determination regarding which types of gaming activities are 
permitted under the State law, such determination would be 
presented to the Federal court to determine what gaming 
activities could be incorporated in a Class III gaming compact. 
Once the Federal court determined the scope of gaming under 
IGRA, the Secretary is required to make such modifications as 
are necessary to incorporate the determination of the Federal 
court prior to approving the Compact.
    At the July 25th hearing on S. 487, the Committee solicited 
the views of the several tribal representatives and the 
National Governors Association on the two proposed alternatives 
to Section 12 of the bill. The National Governors Association 
testified in opposition to both proposed alternatives to 
Section 12. During the hearing the Chairman invited the 
National Governors Association to provide an alternative 
approach to address the issues presented in Section 12. The 
Committee has yet to receive any proposal from the National 
Governors Association. While several tribal witnesses testified 
in opposition to the second alternative to Section 12 of the 
Act, there were several tribal witnesses who did express 
support for a revised form of binding arbitration. In addition, 
the Committee did receive proposed revisions to alternative 1 
from some Indian tribes.

                     Committee Substitute Amendment

    The substitute amendment proposes four major changes to the 
provisions of S. 487, the Indian Gaming Regulatory Act 
Amendments Act of 1995. The first proposed change to S. 487 as 
introduced would delete Section 19 of the bill regarding the 
authority of the Secretary to bring lands into trust for 
purposes of gaming. The Substitute Amendment would return to 
the original statutory language in the Indian Gaming Regulatory 
Act (IGRA) by not deleting Section 20 of the 1988 Act regarding 
Gaming on Lands Acquired After Enactment of this Act. The 
proposed change is in response to objections raised by a number 
of State Governors and Attorneys General to the provisions of 
Section 19 of the bill. As originally introduced, Section 19 
would have authorized the Secretary of the Interior to consult 
with, and review the recommendations of, the Governor of the 
State in which such lands are located, any state or local 
officials, including the recommendations of any other nearby 
Indian tribes. S. 487 proposed the change to existing law in 
order to address the Siletz decision,\9\ where a Federal 
district court held that section 20 of IGRA was an 
unconstitutional delegation of Federal authority to a State. 
Section 19 of the bill merely required the Secretary to consult 
with the Governor of a State rather than require the Secretary 
to seek the concurrence of the Governor. In the June 22nd 
hearing on S. 487, the Department of Justice testified that the 
Department's view is that Section 20 of IGRA is constitutional. 
Accordingly, the Committee Substitute Amendment deletes Section 
19 of the bill and retains Section 20 of existing law in 
entirety.
    \9\ Confederated Tribes of Siletz Indians of Oregon v. U.S., 841 F. 
Supp. 1479 (D. Or. 1994).
---------------------------------------------------------------------------
    The second major change to S. 487 as introduced pertains to 
the definitions of Class II and Class III gaming. The 
Substitute Amendment proposes to delete the definitions of 
``Class II gaming''; ``Class III gaming''; ``Electronic, 
Computer, or other Technologic Aid''; ``Electronic or 
Electromechanical Facsimile''; and ``Gambling Device'' as 
contained in section 4 of S. 487. In place of those 
definitions, the Substitute Amendment would retain the 
definitions of Class II and Class III gaming as set out in 
section 4 of IGRA. This proposed change responds to concerns 
raised by witnesses before the Committee regarding the impact 
of the new definitions in section 4 of the bill on current 
regulations promulgated under the 1988 Act by the Commission 
regarding the distinctions between Class II and Class III 
gaming. Under the Substitute Amendment, the Committee would 
return to the original definitions under the IGRA. It is the 
intent of the Committee to retain the current regulations 
pertaining to Class II and Class III gaming activities, 
including the definitions of ``Electronic, Computer or other 
Technologic Aid'' and ``Electronic or Electromechanical 
Facsimile'', as promulgated by the Commission on April 9, 
1992.\10\ The Committee supports the continued application of 
such regulations to Class II and Class III gaming activities 
and does not intend the passage of S. 487 to alter said 
application. One additional change in the Substitute Amendment 
is the inclusion of a new definition for the term ``gaming 
operation''.
    \10\ See 25 CFR part 502, sections 502.3, 502.4, 502.7, and 502.8.
---------------------------------------------------------------------------
    The third major change to S. 487 would modify the 
qualifications for members of the Federal Indian Gaming 
Regulatory Commission under Section 5 of the bill. As 
introduced, S. 487 would require that at least two members of 
the Commission be members of Federally-recognized Indian tribes 
and that one member of the Commission be a certified public 
accountant with not less than 5 years of experience, and that 
one member of the Commission be an individual with training and 
experience in the fields of investigation and law enforcement. 
The Substitute Amendment would modify these provisions to 
require that at least two members of the Commission be 
individuals with extensive experience or expertise in tribal 
government. The Substitute would authorize the President to 
give special reference to the training and experience of 
individuals in the fields of corporate finance, accounting, 
auditing, and investigation or law enforcement. The Committee 
intends the amendments to Section 5 of the bill to provide the 
Administration with more flexibility in making appointments to 
the Commission. The Committee believes that because of the 
nature of the work to be carried out by the Commission, 
qualified candidates should have significant experience in 
corporate finance, accounting, and auditing or significant 
experience in investigation and law enforcement. Finally, the 
Committee intends the changes in Section 5 which require at 
least 2 members of the Commission to have extensive experience 
or expertise in tribal government will ensure that these 
Commission members will be well-versed in the principles of 
Federal Indian law and have significant experience working with 
or in tribal governments. In addition, the Substitute would add 
to the list of authorities of the Commission under Section 7 of 
the bill, the authority to establish precertification criteria 
that apply to management contractors and other persons having 
material control over a gaming operation.
    The fourth major change to S. 487 would substantially 
revise Section 12 of the bill and reinsert the original 
statutory provisions in Subsection (d) of Section 11 of IGRA. 
S. 487 as introduced would have authorized the Secretary of the 
Interior to act as a mediator between the State and an Indian 
tribe where the parties are unable to successfully conclude 
compact negotiations within the timelines provided under the 
bill. Under Section 12 of the Substitute Amendment, the 
original statutory language regarding compact negotiations 
would be incorporated into the amendment. The proposed change 
in the Substitute Amendment would restore the good faith 
defense to the States and restore the Federal court mediation 
process to address those circumstances where an Indian tribe 
and a State are unable to conclude a compact. The changes 
contained in the Substitute Amendment were made in response to 
the concerns raised by a number of State Governors and State 
Attorneys General regarding the provisions in Section 12 of S. 
487 which authorized the Secretary of the Interior to act as a 
mediator. Several States objected to this provision in S. 487 
arguing that it ceded too much authority to the Secretary of 
the Interior to develop a Class III gaming compact without 
sufficient State participation. Indian tribes testified in 
support of the provisions of S. 487 as introduced as an 
appropriate response to those circumstances where a State 
refused to negotiate with a tribe on Class III gaming, and 
invoked its 10th and 11th Amendment defenses to the Federal 
court mediation process to create an impasse. Finally, the two 
alternative proposals to Section 12 which were circulated by 
the Committee were not supported by the representatives of 
tribal governments and the National Governors Association in 
the July 25th hearing. Because there is no consensus between 
the States and the tribes on this issue and there has been no 
agreement on proposed alternative language to Section 12 of the 
bill, the Committee has determined to return to the original 
process set out under IGRA.

                          Other Considerations

    In recent years, three serious proposals have been made to 
levy a new Federal tax upon the proceeds of gaming activity 
conducted by Indian tribal governments. In 1994, the Clinton 
Administration floated a wagering tax on all casino-style 
gaming in order to finance its welfare reform proposal. That 
tax would have applied to both for-profit commercial gaming 
private enterprises operated in Nevada, New Jersey, and in 
other states on riverboats and land, as well as to the 
governmental gaming conducted by Indian tribes. The 
Administration's new wagering tax was not adopted by the 
Congress. In early 1995, a revenue proposal of uncertain origin 
was floated during consideration of the General Agreement on 
Tariffs and Trade (GATT) that would have imposed a Federal tax 
on Indian gaming activity. This too was abandoned. 
Subsequently, during the summer of 1995, the House Committee on 
Ways and Means proposed and then approved a provision as part 
of its balanced budget reconciliation bill that would have 
applied a new Federal tax solely on Indian gaming.
    The House provision singled out Indian tribal governments 
for disparate treatment by imposing a new Federal income tax on 
the Federally-authorized governmental gaming revenues of 
tribes, while continuing to treat as exempt from Federal tax 
both the gaming revenues derived by State and local governments 
and the gaming funds raised by non-profit, tax-exempt 
charitable organizations. In passing the Indian governmental 
gaming tax provision as part of its initial reconciliation 
measure, the House of Representatives proposed a dramatic 
change in the tax status of Indian tribal governments. Federal 
policy for decades has encouraged tribal governments to foster 
economic development on their impoverished reservations. Since 
the time tribal governments entered into treaties with the 
United States, they have been considered sovereign governments. 
Consequently, Indian tribal governments have been treated as 
non-taxable entities under Federal income tax law. (See IRS 
Rev. Rul. 67-284, 1967-2 C.B. 55: Rev. Rul. 81-295, 1981-2 C.B. 
15; Rev. Rul. 94-16, 1994-12 I.R.B. 1; Rev. Rul. 94-65, 1994-42 
I.R.B. 10.) Perhaps the sharpest irony is that the tribal 
revenue declared by the House provision to be taxable was 
characterized as ``unrelated business income''. However, tribal 
revenues derived from the conduct of gaming activities on 
Indian lands are expressly required by Federal law to be 
expended by tribal governments for governmental purposes under 
the Indian Gaming Regulatory Act of 1988 in a provision that 
would not be altered by S. 487.
    The Chairman, Vice-Chairman, and many other members of the 
Senate Committee on Indian Affairs wrote the leadership of the 
Senate Committee on Finance to urge that Committee to reject 
the House-passed provision to tax Indian gaming revenues. After 
considering the matter, the Finance Committee did not include 
that provision in its Balanced Budget bill, and subsequently 
prevailed upon the House to drop the idea in the Conference 
Committee. The effort to defeat the Indian gaming tax was led 
by a broadly bi-partisan group of Senators. The arguments they 
made against the bill included the following points. Indian 
tribes are governments, they are not cultural organizations or 
non-profit corporations. Tribal governments exercise 
substantial jurisdiction and governmental authority under 
Federal law. The governmental status of tribes has been 
confirmed repeatedly by the United States Supreme Court and 
Federal statutes, consistent with long-standing constitutional 
principles. Like States and other sovereign governments, Indian 
tribes have a need to raise revenues to meet their governmental 
obligations and to provide basic governmental services by 
conducting business activities such as gaming. Tribal 
governments do not have ``unrelated business income,'' they 
have governmental revenues derived from Federally-authorized 
economic development activities. No serious proposal was under 
consideration to impose a Federal income tax on State or other 
governments who conduct lotteries or other gaming activities as 
part of their responsibility to raise revenues to carry out 
governmental activities for their territories. Consequently, 
the House proposal was rejected as a plainly discriminatory 
Federal income tax against Indian tribal governments.

                          Legislative History

    S. 487 was introduced by Senator McCain, for himself and 
Senator Inouye, on March 2, 1995, and was referred to the 
Committee on Indian Affairs. On June 22, 1995, the Committee on 
Indian Affairs held a hearing on S. 487. A second hearing was 
held on July 25, 1995.

            Committee Recommendation and Tabulation of Vote

    In an open business session on August 9, 1995, the 
Committee on Indian Affairs ordered the bill reported with 
amendments, with the recommendation that the Senate pass the 
bill as reported.

                      Section-by-Section Analysis

Section 1. Short title

    This section provides that this Act may be cited as the 
``Indian Gaming Regulatory Act Amendments Act of 1995''.

Section 2. Amendment to the Indian Gaming Regulatory Act

    This section provides that the Indian Gaming Regulatory Act 
(25 U.S.C. 2701 et seq.) is amended by striking the first 
section and inserting the following new section:
            Section 1. Short title; table of contents
    Subsection (a) provides that this Act may be cited as the 
``Indian Gaming Regulatory Act''.
    Subsection (b) sets forth the table of contents for the Act 
and strikes sections 2 and 3 of the Act and inserting the 
following new sections:
            Section 2. Congressional findings
    This section contains seven separate findings, including 
the following: Indian tribes are engaged in the licensing and 
operation of gaming activities as a means of generating tribal 
governmental revenue; clear Federal standards and regulations 
for the conduct of Indian gaming will assist tribal governments 
in assuring the integrity of gaming activities; a principal 
goal of Federal Indian policy is to promote tribal economic 
development, self-sufficiency and strong tribal government; 
Indian tribes have the right to regulate gaming activities on 
Indian lands if such activities are not prohibited by Federal 
law and are conducted within a state that permits such gaming 
activities and the Congress has the authority to regulate the 
privilege of doing business with Indian tribes in Indian 
country; the regulation of Indian gaming activities should meet 
or exceed federally established minimum regulatory 
requirements; gaming activities on Indian lands has had a 
substantial impact on commerce with foreign nations, among the 
several states and with the Indian tribes; and the Constitution 
vests the Congress with the power to regulate commerce with 
foreign nations, among the several states and with the Indian 
tribes and this Act is enacted in the exercise of those powers.
            Section 3. Purposes
    This section sets forth four purposes of the Act, including 
the following: to ensure the right of Indian tribes to conduct 
gaming operations on Indian lands consistent with the U.S. 
Supreme Court decision in the case of California v. Cabazon 
Band of Mission Indians; to provide a statutory basis for the 
conduct of gaming activities on Indian lands as a means of 
promoting tribal economic development and strong tribal 
governments; to provide an adequate statutory basis for the 
regulation of Indian gaming by tribal governments to shield the 
gaming from organized crime; ensure that the Indian tribe is 
the primary beneficiary of the gaming activities and to ensure 
that the gaming activities are conducted fairly by both the 
operator and the patrons; and to declare that the establishment 
of independent Federal regulatory authority and minimum 
regulatory standards for the conduct of gaming activities on 
Indian lands are necessary to protect such gaming.
            Section 4. Definitions
    This section contains definitions for the following terms: 
``applicant'', ``Advisory Committee'', ``Attorney General'', 
``Chairperson'', ``Class I Gaming'', ``Commission'', 
``Compact'', ``Gaming Operation'', ``Gaming-Related Contract'', 
``Gaming Related Contractor'', ``Gaming Service Industry'', 
``Indian Lands'', ``Indian Tribe'', ``Key Employee'', 
``Management Contract'', ``Management Contractor'', ``Material 
Control'', ``Net Revenues'', ``Person'', and ``Secretary''. 
This Section also incorporates by reference the definitions of 
``Class II gaming'' and ``Class III gaming'' from the Indian 
Gaming Regulatory Act.
            Section 5. Establishment of the Federal Indian Gaming 
                    Regulatory Commission
    Subsection (a) of this section provides for the 
establishment of the Federal Indian Gaming Regulatory 
Commission as an independent agency of the United States.
    Subsection (b) provides that the Commission shall be 
composed of 3 full-time members who are appointed by the 
President and confirmed by the Senate. Commission members are 
prohibited from pursuing any other business or occupation or 
holding any other office. Other than through distribution of 
gaming revenues as a member of an Indian tribe, Commission 
members are prohibited from engaging in or having a pecuniary 
interest in a gaming activity or in any business or 
organization that has a license under this Act or that does 
business with any person or organization under this Act. 
Persons who have been convicted of a felony or a gaming offense 
cannot serve as Commissioners. In addition, persons who have 
any financial interest in or management responsibility for any 
gaming contract or other contract approved pursuant to this Act 
are also ineligible to serve as Commissioners.
    Subsection (b) also provides that not more than 2 members 
of the Commission shall be members of the same political party. 
Under this subsection, the President is authorized to give 
special reference to an individual's training and experience in 
the fields of corporate finance, accounting, auditing and 
investigation or law enforcement. It also provides that not 
less than 2 members of the Commission shall be individuals with 
extensive experience or expertise in tribal government. Any 
person under consideration for appointment to the Commission 
shall be the subject of a background investigation conducted by 
the Attorney General with particular emphasis on the person's 
financial stability, integrity, responsibility and reputation 
for good character and honesty.
    Subsection (c) provides that the President shall select a 
Chairperson from among the members appointed to the Commission.
    Subsection (d) provides that the Commission shall select a 
Vice Chairperson by majority vote. The Vice Chairperson shall 
serve as the Chairperson in the absence of the Chairperson and 
shall exercise such other powers as may be delegated by the 
Chairperson.
    Subsection (e) provides that each member of the Commission 
shall hold for a term of 5 years and no member can serve more 
than two terms of 5 years each. The initial appointments to the 
Commission will be made for staggered terms, with the 
Chairperson serving a full 5 year term.
    Subsection (f) provides that Commissioners shall serve 
until the expiration of their term or until their successor is 
duly appointed and qualified, unless a Commissioner is removed 
for cause. A Commissioner can only be removed by the President 
for neglect of duty, malfeasance in office of for other good 
cause. Any member appointed to fill a vacancy shall serve for 
the unexpired term of the vacancy.
    Subsection (g) provides that two members of the Commission 
shall constitute a quorum.
    Subsection (h) provides that the Commission shall meet at 
the call of the Chairperson or a majority of the members of the 
Commission. A majority of the members of the Commission shall 
determine any action of the Commission.
    Subsection (i) provides that the Chairperson shall be 
compensated at level IV of the Executive Schedule and other 
members shall be compensated at level V. All members of the 
Commission shall be reimbursed for travel, subsistence and 
other necessary expenses.
    Subsection (j) requires the Administrator of General 
Services to provide to the Commission on a reimbursable basis 
such administrative support services as the Commission may 
request.
            Section 6. Powers of the chairperson
    Subsection (a) provides that the Chairperson is the chief 
executive officer of the Commission.
    Subsection (b) provides that the Chairperson can employ and 
supervise such personnel as may be necessary to carry out the 
functions of the Commission, without regard to the requirements 
of title 5 of the United States Code relating to appointments 
in the competitive service. The Chairperson is required to 
appoint a General Counsel and may procure temporary and 
intermittent services or request the head of any federal agency 
to detail any personnel of such agency to the Commission to 
assist in carrying out the duties of the Commission under this 
Act. The Chairperson is also authorized to use and expend 
federal funds and fees collected pursuant to this Act and to 
contract for such professional, technical and operational 
personnel as may be necessary to carry out this Act. Staff of 
the Commission are to be paid without regard to the 
requirements of title 5 of the United States Code relating to 
classification and pay rates.
    Subsection (c) provides that the Chairperson shall be 
governed by the general policies of the Commission and by such 
regulatory decisions and determinations as the Commission is 
authorized to make.
            Section 7. Powers and authority of the Commission
    Subsection (a) provides that the Commission shall have the 
power to approve the annual budget of the Commission; 
promulgate regulations to carry out this Act; establish fees 
and assessments; conduct investigations; issue temporary and 
permanent orders closing gaming operations; grant, deny or 
condition or suspend any license issued under any authority 
conferred on the Commission by this Act; fine any person 
licensed pursuant to this Act for violation of any of the 
conditions of licensure under this Act; inspect the premises 
where Class II and III gaming operations are located; inspect 
and audit all books and records of Class II and III gaming 
operations; use the U.S. mail in the same manner as any agency 
of the U.S.; procure supplies and services by contract; 
contract with state, tribal and private entities to assist in 
the discharge of the Commission's duties; serve or cause to be 
served process or notices of the Commission; propound written 
interrogatories and appoint hearing examiners who are empowered 
to administer oaths; conduct hearings pertaining to violations 
of this Act; collect the fees and assessments authorized by 
this Act; assess penalties for violations of the Act; provide 
training and technical assistance to Indian tribes with respect 
to the conduct and regulation of gaming activities; monitor and 
regulate Class II and III gaming; establish precertification 
criteria that apply to management contractors and other persons 
having material control over a gaming operation; approve all 
management-related and gaming-related contracts; delegate any 
of the functions of the Commission, except for rulemaking, to a 
division of the Commission or a Commissioner, employee or 
administrative law judge.
    Subsection (b) provides that the Commission reserves the 
right to review any action taken pursuant to a delegation of 
its authority. The vote of one Commissioner is sufficient to 
bring a delegated action before the full Commission for review. 
If the Commission declines to exercise the right of review, 
then the delegated action shall be deemed an action of the 
Commission.
    Subsection (c) provides that after receiving 
recommendations from the Advisory Committee pursuant to this 
Act, the Commission shall establish minimum Federal standards 
for: background investigations; licensing; the operation of 
Class II and III gaming activities, including surveillance, 
security and systems for monitoring all gaming activity, 
protection of the integrity of the rules for play of games, 
cash counting and control, controls over gambling devices and 
accounting and auditing.
    Subsection (d) provides that the Commission may secure from 
any department or agency of the United States information 
necessary to enable the Commission to carry out this Act. The 
Commission may also secure from any law enforcement or gaming 
regulatory agency of any State, Indian tribe or foreign nation 
information necessary to enable the Commission to carry out 
this Act. All such information obtained by the Commission shall 
be protected from disclosure by the Commission. For purposes of 
this subsection, the Commission shall be considered to be a law 
enforcement agency.
    Subsection (e) authorizes the Commission to conduct such 
investigations as the Commission considers necessary to 
determine whether any person has violated, is violating or is 
conspiring to violate any provision of this Act. In addition, 
the Commission is authorized to investigate such facts, 
conditions, practices, or matters as the Commission considers 
necessary to proper to aid in the enforcement, implementation 
or amendment of the Act. Any member of the Commission or any 
officer designated by the Commission is empowered to administer 
oaths and to subpoena witnesses and evidence from any place in 
the United States at any designated place of hearing. The 
Commission is authorized to invoke the jurisdiction of any 
Federal court to require the attendance and testimony of 
witnesses and the production of records. The failure of any 
person to obey an order of a Federal court to appear and 
testify or to produce records is punishable as a contempt of 
such court. If the Commission determines that any person is 
engaged, has engaged or is conspiring to engage in any act or 
practice which constitutes a violation of this Act, the 
Commission may bring an action in the Federal District Court 
for the District of Columbia to enjoin such act or practice or 
refer the matter to the Attorney General for the initiation of 
criminal proceedings. At the request of the Commission, each 
Federal district court shall have jurisdiction to issue writs 
of mandamus, injunctions and orders commanding any person to 
comply with this Act and any rules or regulations promulgated 
pursuant to the Act.
            Section 8. Regulatory framework
    Subsection (a) provides that for Class II gaming Indian 
tribes shall retain the right to monitor and regulate such 
gaming, conduct background investigations, and issue licenses 
in a manner which meets or exceeds minimum Federal standards 
established by the Commission pursuant to section 7(c) of this 
Act.
    Subsection (b) provides that for Class III gaming which is 
conducted pursuant to a tribal/state compact, an Indian tribe 
or a state or both shall monitor and regulate such gaming, 
conduct background investigations, issue licenses and establish 
and regulate internal control systems in a manner which meets 
or exceeds minimum Federal standards established by the 
Commission pursuant to section 7(c) of this Act.
    Subsection (c) provides that in any case in which an Indian 
tribe conducts Class II gaming in a manner which substantially 
fails to meet or enforce the minimum Federal standards for 
Class II gaming, then the Commission shall have the authority 
to conduct background investigations, issue licenses and 
establish and regulate internal control systems after providing 
the Indian tribe an opportunity to cure violations and to be 
heard. The authority of the Commission may be exclusive and may 
continue until such time as the regulatory and internal control 
systems of the Indian tribe meet or exceed the minimum Federal 
standards established by the Commission.
    Subsection (c) also provides that in the case of Class III 
gaming, if an Indian tribe or a state, or both, fail to meet or 
enforce the minimum Federal standards for Class III gaming then 
the Commission shall have the authority to conduct background 
investigations, issue licenses and establish and regulate 
internal control systems after providing notice and an 
opportunity to cure problems and be heard. The authority of the 
Commission may be exclusive and may continue until such time as 
the regulatory and internal control systems of an Indiana tribe 
or a state, or both, meet or exceed the minimum Federal 
standards established by the Commission.
            Section 9. Advisory Committee on Minimum Regulatory 
                    Requirements and Licensing Standards
    Subsection (a) authorizes the President to establish an 
Advisory Committee on Minimum Regulatory Requirements and 
Licensing Standards.
    Subsection (b) provides that the advisory committee shall 
be composed of 7 members who shall be appointed by the 
President within 120 days of enactment of the Indian Gaming 
Regulatory Act Amendments Act of 1995. Three members shall be 
members of, and represent, Indian tribal governments which are 
engaged in gaming under this Act and shall be selected from a 
list of recommendations submitted to the President by the 
Chairman and Vice Chairman of the Senate Committee on Indian 
Affairs and the Chairman and ranking minority member of the 
Subcommittee on Native American and Insular Affairs of the 
Committee on Resources of the House of Representatives. Two 
members shall represent state governments and shall be selected 
from a list of recommendations submitted to the President by 
the Majority Leader and the Minority Leader of the Senate and 
the Speaker and Minority Leader of the House of 
Representatives. Two members shall be employees of the 
department of Justice. Any vacancy on the Advisory Committee 
shall not affect its powers, but shall be filed in the same 
manner as the original appointment.
    Subsection (c) provides that 180 days after the date on 
which the Advisory Committee is fully constituted it shall 
develop recommendations for minimum Federal standards for the 
conduct of background investigations, internal control systems 
and licensing standards. The committee's recommendations shall 
be submitted to The Committee on Indian Affairs of the Senate, 
the Subcommittee on Native American and Insular Affairs of the 
Committee on Resources of the House of Representatives, the 
Commission and to each federally recognized Indian tribe. The 
Commission and the Advisory Committee are required to give 
equal weight to existing industry standards, the unique nature 
of tribal gaming, the broad variations in the scope and size of 
tribal gaming activity, the inherent sovereign right of Indian 
tribes to regulate their own affairs and the Findings and 
Purposes set forth in sections 2 and 3 of this Act.
    Subsection (d) provides that the Commission shall hold 
public hearings on the Advisory Committee's recommendations 
after they are received. At the conclusion of the hearings, the 
Commission shall promulgate regulations establishing minimum 
regulatory requirements and licensing standards.
    Subsection (e) provides that the members of the Advisory 
Committee who are not officers or employees of the Federal 
government or a State government shall be reimbursed for travel 
and per diem during the performance of the duties of the 
Advisory Committee and while away from home or their regular 
place of business.
    Subsection (f) provides that the Advisory Committee shall 
cease to exist 10 days after it submits its recommendations to 
the Commission.
    Subsection (g) provides that the activities of the Advisory 
Committee are exempt from the Federal Advisory Committee Act.
            Section 10. Licensing
    Subsection (a) provides that licenses shall be required of 
gaming operations, key employees of a gaming operation, 
management- and gaming-related contractors, any gaming service 
industry, and any person who has material control over a 
licensed gaming operation.
    Subsection (b) provides that the Commission may require 
license of management contractors and gaming operations 
notwithstanding any other provision of law relating to the 
issuance of licenses by an Indian tribe or a state, or both.
    Subsection (c) provides that no gaming operation shall 
operate unless all required licenses and approvals have been 
obtained in accordance with this Act. Each management contract 
for a gaming operation must be in writing and filed with and 
approved by the Commission. The Commission may require that a 
management contract include any provisions that are reasonably 
necessary to meet the requirements of this Act. Any applicant 
for a license who does not have the ability to exercise any 
significant control over a licensed gaming operation may be 
determined by the Commission to be ineligible to hold a license 
or to be exempt from being required to hold a license.
    Subsection (d) provides that the Commission shall deny a 
license to any applicant who is disqualified for failure to 
meet any of the minimum Federal standards promulgated by the 
Commission pursuant to section 7(c).
    Subsection (e) provides that the Commission shall conduct 
an investigation into the qualifications of the applicant and 
may conduct a non-public hearing concerning the applicant's 
qualifications. No later than 90 days after an application is 
filed with the Commission, the Commission shall complete its 
investigation and any hearings associated with such 
investigation. Not later than 10 days after the expiration of 
the 90-day period, the Commission shall take final action grant 
or deny a license. If an application is denied by the 
Commission, the applicant can request a statement of the 
reasons, including specific findings of fact. If the Commission 
is satisfied that the applicant is qualified to receive a 
license, then the Commission shall issue a license upon the 
tender of all license fees and assessments required by this Act 
and such bonds as the Commission may require for the faithful 
performance of all requirements imposed by this Act. The 
Commission is authorized to fix the amount of any bond it 
requires. Bonds furnished to the Commission may be applied by 
the Commission to any unpaid liability of the licensee. Bonds 
shall be furnished in cash or negotiable securities, by a 
surety or through an irrevocable letter of credit.
    Subsection (f) provides that the Commission shall renew any 
license issued under this Act, subject to its power to deny, 
revoke or suspend licenses, upon proper application for renewal 
and the receipt of license fees and assessments. Licenses can 
be renewed for up to two years for each of the first 2 renewal 
periods and three years for each succeeding renewal period. A 
licensing hearing can be reopened by the Commission at any 
time. Any licenses in existence on the date of enactment of 
this Act may be renewed for a period of 18 months. Any 
application for renewal must be filed with the Commission not 
later than 90 days prior to the expiration of the current 
license. Upon renewal of a license, the Commission shall issue 
an appropriate renewal certificate.
    Subsection (g) provides that the Commission shall establish 
procedures for the conduct of hearings associated with 
licensing including procedures for denying, limiting, 
conditioning, revoking or suspending any such license. After 
the completion of a licensing hearing the Commission shall 
render a decision and issue and serve an order on the affected 
parties. The Commission may order a rehearing on a decision on 
a motion made by a party or the Commission not later than 10 
days after the service of a decision and order. Following a 
rehearing, the Commission shall render a decision, issue an 
order and serve it on the affected parties. Any licensing 
decision or order made by the Commission shall be final agency 
action for the purposes of judicial review. The United States 
Court of Appeals for the District of Columbia has jurisdiction 
to review the licensing decisions and orders of the Commission.
    Subsection (h) provides that the Commission shall maintain 
a registry of all licenses granted or denied and shall make the 
information contained in the registry available to Indian 
tribes to assist them in the licensing and regulation of gaming 
activities.
            Section 11. Requirements for the conduct of class I and 
                    class II gaming on Indian lands.
    Subsection (a) provides that Class I gaming shall be within 
the exclusive jurisdiction of the Indian tribes and shall not 
be subject to the provisions of this Act.
    Subsection (b) provides that Class II gaming shall be 
within the jurisdiction of the Indian tribes, but shall be 
subject to the provisions of this Act. An Indian tribe may 
engage in, and license and regulate Class II gaming on the 
lands within the jurisdiction of the tribe if: the gaming is 
located within a state that permits such gaming for any purpose 
by any person; such gaming is not otherwise specifically 
prohibited on Indian lands by Federal law; and the Class II 
gaming operation meets or exceeds the requirements of section 
7(c) and 10. With regard to any Class II gaming operation, the 
Commission shall ensure that: the Indian tribe has issued a 
separate license for each place, facility or location at which 
Class II gaming is conducted; the Indian tribe has or will have 
the sole proprietary interest and responsibility for the 
conduct of any Class II gaming activity, except as provided 
elsewhere in the Act with regard to gaming operations by Indian 
individuals; and the net revenues from Class II gaming may only 
be used to fund tribal government operations or programs, to 
provide for the general welfare of the Indian tribe and its 
members, to promote tribal economic development, to donate to 
charitable organizations, to help fund operations of local 
government agencies, to comply with section 17 of this Act, or 
to make per capital payments to tribal members pursuant to the 
provisions of this subsection. The Indian tribe is required to 
provide the Commission with annual outside audits of its Class 
II gaming operation. Such audits shall include a review of all 
contracts for supplies and services equal to or more than 
$50,000 annually, except for contracts for legal and accounting 
services.
    Subsection (b) further provides that the Commission shall 
ensure that the construction and maintenance of a Class I 
gaming facility and the operation of the gaming shall be 
conducted in a manner that adequately protects the environment 
and public health and safety. The Commission must also ensure 
that their is an adequate system for background investigations 
on all persons who are required to be licensed in accordance 
with sections 7(c) and 10 and notice to the Commission by the 
Indian tribe of the results of the background investigation 
before the issuance of any license. No license may be granted 
to any person whose prior activities, criminal record or 
reputation habits and associations pose a threat to the public 
interest or the effective regulation of gaming.
    With regard to per capita payments, subsection (b) provides 
that such payments may only be made if: the Indian tribe has 
prepared a plan to allocate revenues to the public, 
governmental, economic development and social welfare purposes 
prescribed by this Act and the Secretary determines that the 
plan is adequate; the interests of minors and other legally 
incompetent persons are protected and preserved and the 
payments for such individuals are disbursed to their parents or 
legal guardians under a plan approved by the Secretary and the 
governing body of the Indian tribe; and the per capita payments 
are subject to Federal income taxation and Indian tribes 
withhold such tax.
    With regard to Class II gaming operations on Indian lands 
which are owned by a person or entity other than the Indian 
tribe, subsection (b) requires the issuance of a separate 
license which includes the requirements of this section and 
requirements that are at least as restrictive as those 
established by state law governing similar gaming within the 
jurisdiction of the state within which the Indian lands are 
located. No person or entity, other than the Indian tribe shall 
be eligible to receive a tribal license to own a Class II 
gaming operation on Indian lands within the jurisdiction of the 
Indian tribe if such person or entity would not be eligible to 
receive a state license to conduct the same activity within the 
jurisdiction of the state. Any individually owned Class II 
gaming operation that was in operation on September 1, 1986 
shall not be barred by this Act if: it is licensed by an Indian 
tribe; the income to the Indian tribe from such gaming is not 
used for per capita payments; not less than 60 percent of the 
net revenues from the gaming operation is income to the Indian 
tribe; and the owner of the gaming operation pays an assessment 
to the Commission pursuant to section 17 for the regulation of 
such gaming. This exemption for certain individually owned 
games cannot be transferred to any person or entity and only 
remains in effect so long as the gaming activity remains within 
the same nature and scope as the gaming operation which was 
operated on October 17, 1988. The Commission is required to 
maintain and publish in the Federal Register a list of 
individually owned gaming operations.
    Subsection (c) provides that any Indian tribe that operates 
a Class II gaming activity may petition the Commission for a 
certificate of self-regulation if that Indian tribe has 
continuously conducted such gaming activity for a period of not 
less than 3 years, including at least one year after the date 
of enactment of this Act, and has otherwise complied with the 
provisions of this Act. The Commission shall issue a 
certificate of self-regulation if it determines that the Indian 
tribe has: conducted its gaming activity in a manner which has 
resulted in an effective and honest accounting of all revenues; 
resulted in a reputation for safe, fair, and honest operation 
of the activity; been generally free of evidence of criminal or 
dishonest activity; and the Indian tribe has adequate systems 
for accounting for revenues, investigation and licensing of 
employees and contractors, investigation and enforcement of its 
gaming laws and has conducted the gaming operation on a 
fiscally sound basis. During any period in which a certificate 
of self-regulation is in effect, the Indian tribe shall 
continue to submit an annual independent audit to the 
Commission and a complete resume of each employee and 
contractor hired and licensed by the Indian tribe. The 
Commission cannot assess a fee on a self-regulated activity 
pursuant to section 17 in excess of one quarter of 1 percent of 
the net revenue from such activity. The Commission may rescind 
a certificate of self-regulation for just cause and after an 
opportunity for a hearing.
    Subsection (d) provides that if the Commission notifies the 
Indian tribe that any license which has been issued by the 
tribe under this section does not meet any standards 
established under sections 7(c) or 10, then the Indian tribe 
shall immediately suspend the license and after notice and 
hearing to the licensee in conformity with the laws of the 
Indian tribe may revoke such license.
            Section 12. Class III gaming on Indian lands
    Subsection (a) provides that Class III gaming activities 
shall be lawful on Indian lands only if such activities are 
authorized by the Secretary under procedures prescribed under 
paragraph (3)(B)(vii) or by a compact that: is adopted by the 
governing body of the Indian tribe having jurisdiction over 
such lands; meets the requirements of section 11(b)(3) for the 
conduct of Class II gaming; is approved by the Secretary. Such 
gaming activities must be located in a State that permits such 
gaming for any purpose by any person and be conducted in 
conformity with a compact that is in effect or with procedures 
prescribed by the Secretary under paragraph (3)(B)(vii). Any 
Indian tribe which has jurisdiction over the lands upon which a 
Class III gaming activity is to be conducted shall request the 
State in which such lands are located to enter into 
negotiations for the purpose of entering into a compact to 
govern the conduct of Class III gaming activities. Upon 
receiving such a request, the State shall negotiate with the 
Indian tribe in good faith to enter into such a compact.
    Any State and any Indian tribe may enter into a Class III 
gaming compact, however such compact shall only take effect 
when notice of approval by the Secretary of such compact has 
been published in the Federal Register. The U.S. District 
Courts shall have jurisdiction over: any cause of action 
initiated by an Indian tribe arising from the failure of a 
State to enter into negotiations with the Indian tribe for the 
purpose of entering into a Class III gaming compact or to 
conduct such negotiations in good faith; any cause of action 
initiated by a State or Indian tribe to enjoin a Class III 
gaming activity located on Indian lands conducted in violation 
of any Class III gaming compact; and any cause of action 
initiated by the Secretary to enforce the procedures prescribed 
under subparagraph (B)(vii).
    Subparagraph (B) provides that an Indian tribe may only 
initiate a cause of action after the expiration of the 180 day 
period beginning on the date when the Indian tribe requests the 
State to enter into negotiations. In any action arising from 
the failure of the State to enter into negotiations with an 
Indian tribe in good faith, the burden of proof shall be upon 
the State to prove that it had negotiated in good faith. If the 
court finds that the State has failed to negotiate in good 
faith with the tribe, the court shall order the State and the 
tribe to conclude such compact within a 60 day period. In 
determining whether a State has negotiated in good faith the 
court may take into account the public interest, public safety, 
adverse economic impacts on existing gaming activities and 
shall consider the demand by the State for direct taxation of 
the Indian tribe or of any Indian lands as evidence that the 
State has not negotiated in good faith.
    In the event that a State and an Indian tribe fail to 
conclude a compact within the 60 day period, the tribe and the 
State shall each submit to a mediator appointed by the court a 
proposed compact that represents their last best offer for a 
compact. The mediator shall select from the two proposed 
compact one which best comports with the terms of this Act and 
any other applicable Federal law and with the findings and 
order of the court. The mediator shall submit the proposed 
compact he has selected to the State and the Indian tribe for 
their review. If a State consents to a proposed compact during 
the 60 day period, then such compact shall be treated as a 
compact entered into under paragraph (2). If a State fails to 
consent to a compact submitted by the mediator during the 60 
day period, the mediator shall notify the Secretary and the 
Secretary shall prescribe procedures for the conduct of Class 
III which are consistent with the proposed compact selected by 
the mediator, the provisions of this Act, and the relevant 
provisions of State law.
    The Secretary is authorized to approve any compact between 
an Indian tribe and a State governing gaming on Indian lands of 
such tribe. The Secretary may disapprove a compact only if that 
compact violates any provision of this Act, any other provision 
of Federal law that does not relate to jurisdiction over gaming 
on Indian lands, or the trust obligations of the United States 
to Indians. If the Secretary does not approve or disapprove a 
compact before the expiration of the 45 day period beginning on 
the date on which the compact is submitted to the Secretary for 
approval, the compact shall be considered approved to the 
extent that it is consistent with the provisions of this Act. 
The Secretary shall publish notice of any compact that is 
approved, or considered to have been approved under this 
paragraph in the Federal Register. The publication of a compact 
that permits a form of Class III gaming shall be conclusive 
evidence that such Class III gaming is an activity subject to 
the laws of the state where the gaming is to be conducted. Any 
compact negotiated under this subsection shall become effective 
on its publication in the Federal Register. The Commission 
shall monitor and, if authorized, regulate and license Class 
III gaming with respect to any compact that is approved by the 
Secretary.
    Subsection (a) also provides that a compact may include 
provisions relating to the criminal and civil laws of the 
Indian tribe or the state; the allocation of criminal and civil 
jurisdiction between the state and the Indian tribe; the 
assessment by the state of the costs associated with such 
activities in such amounts as are necessary to defray the costs 
of regulating such activity; taxation by the Indian tribe of 
such activity in amounts comparable to the amounts assessed by 
the state for similar activity; remedies for breach of 
contract; standards for the operation of such activity and 
maintenance of the gaming facility; and any other subject that 
is directly related to the operation of gaming activities and 
the impact of gaming on tribal, state and local governments. 
Nothing in this Act may be construed as conferring on a state 
or political subdivision of a state the authority to impose any 
tax, fee, charge, or other assessment on an Indian tribe, an 
Indian gaming operation or the value generated by the gaming 
operation or any person or entity authority by an Indian tribe 
to engage in a Class III gaming activity in conformity with 
this Act.
    Nothing in subsection (a) impairs the right of an Indian 
tribe to regulate Class III gaming on the lands of the Indian 
tribe concurrently with a state and the Commission, except to 
the extent that such regulation is inconsistent with or less 
stringent than this Act. The Committee has included language to 
clarify exemptions to the Johnson Act, also known as the 
Gambling Devices Transportation Act (15 U.S.C. 1172 and 1175), 
for gaming conducted under the Indian Gaming Regulatory Act. 
Specifically, this section provides that sections 1172 and 1175 
of the Johnson Act shall not apply to any Class II gaming 
activity, or to any gaming activity conducted pursuant to a 
Tribal-State compact, or gaming conducted under procedures 
prescribed by the Secretary of the Interior pursuant to the 
Indian Gaming Regulatory Act. The Committee is concerned that 
the definition of a ``gambling device'' in the Johnson Act is 
overbroad and may have unintended consequences when applied to 
gaming activities regulated under IGRA. In particular, the 
Committee is concerned that devices which have been classified 
by the National Indian Gaming Commission, or its successor 
under this bill, the Federal Indian Gaming Regulatory 
Commission, to be ``class II technologic aids'' should not fall 
under the broad definition of ``gambling devices'' in the 
Johnson Act. Of particular concern are those electronic, 
computer, or technologic aids which support class II gaming 
activities such as random number generators, bingo blowers, 
computers, televisions, and other types of devices. Under 
section 1171 of the Johnson Act, gambling devices are defined 
as including ``any other machine or mechanical device * * * 
designed and manufactured primarily for use in connection with 
gambling, and (A) which when operated may deliver, as the 
result of the application of an element of chance, any money or 
property, or (B) by the operation of which a person may become 
entitled to receive, as the result of the application of an 
element of chance, any money or property * * *.'' \11\ The 
definition additionally includes any subassembly or essential 
part of any such machine or mechanical device.\12\ This 
definition has been interpreted by the courts to apply to 
``trade booster'' devices which were attached to cigarette 
vending machines to deliver a free package of cigarettes to 
certain customers based on randomly generated numbers.\13\ The 
Committee is concerned that those electronic, computer, or 
technologic aids to class II gaming activities, as determined 
by the Federal Indian Gaming Regulatory Commission, be exempted 
from the application of the provisions of the Johnson Act. The 
Committee has also clarified that gaming activities conducted 
under Tribal-State compacts or under procedures prescribed by 
the Secretary of the Interior be exempted from the application 
of sections 1172 and 1175 of the Johnson Act, which pertain to 
the transportation of gambling devices and the manufacture, 
sale, repair, or possession of gambling devices, respectively.
    \11\ 15 U.S.C. 1171(a)(2).
    \12\ 15 U.S.C. 1171(a)(3).
    \13\ See U.S. v. 11 Star-Pack Cigarette Merchandiser Machines, 248 
F.Supp. 933 (D.C.Pa., 1966).
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    Subsection (b) provides that the Federal District Court for 
the District of Columbia shall have jurisdiction over any 
action initiated by an Indian tribe, a state, the Secretary or 
the Commission to enforce a compact or to enjoin a Class III 
gaming activity located on Indian lands and conducted in 
violation of any compact.
    Subsection (c) provides that the governing body of an 
Indian tribe may adopt an ordinance or resolution revoking any 
prior ordinance or resolution that authorized Class III gaming 
on the Indian Lands of the Indian tribe. Such a revocation 
shall render Class III gaming illegal on the Indian lands of 
such Indian tribe. The Commission is required to publish the 
revocation ordinance or resolution in the Federal Register not 
later than 90 days after receipt of such resolution or 
ordinance and it shall take effect upon such publication. Any 
person or entity operating a Class III gaming activity on the 
date of such revocation may continue to operate such activity 
in conformity with a compact that is in effect for one year 
from the date of publication of the revocation.
    Subsection (d) provides that with regard to compacts 
entered into and approved by the Secretary before the date of 
enactment of this Act shall remain lawful during the period 
such compact is in effect notwithstanding any amendments made 
by this Act or any changes made in state law enacted after the 
approval of the compact. It further provides that all Class III 
gaming activity conducted under a compact or pursuant to 
procedures prescribed by the Secretary shall be subject to all 
Federal minimum regulatory standards established under this act 
and any regulations promulgated under this Act. Any compact 
entered into after the date of enactment of this Act shall 
remain lawful under this Act notwithstanding any change in 
state law enacted after the approval of the compact.
            Section 13. Review of contracts
    Subsection (a) provides that the Commission shall review 
and approve or disapprove any management contracts for the 
management of any gaming activity and any gaming-related 
contract unless such gaming related contract is licensed by an 
Indian tribe consistent with the minimum Federal standards 
promulgated pursuant to section 7(c).
    Subsection (b) provides that the Commission shall only 
approve a management contract if it determines that the 
contract provides for: adequate accounting procedures that are 
maintained and for verifiable monthly financial reports 
prepared by or for the governing body of the Indian tribe; 
access to the gaming operations by tribal officials who shall 
have the right to verify the daily gross revenues and income 
derived from the gaming activity; a minimum guaranteed payment 
to the Indian tribe that has preference over the retirement of 
any development and construction costs; an agreed upon ceiling 
for the repayment of any development and construction costs; a 
contract term of not more than 5 years unless the Commission 
determines that a term of 7 years is appropriate based on the 
capital investment required and the income projections for the 
gaming activity; and grounds and mechanisms for the termination 
of the contract.
    Subsection (c) provides that the Commission may approve a 
management contract that provides for a fee of 30 percent of 
the net revenues of a tribal gaming activity, unless the Indian 
tribe requests a higher fee and the Commission determines that 
based on the capital investment required and the income 
projections a higher fee is justified. In no circumstances can 
a management fee exceed 40 percent.
    Subsection (d) provides that the Commission shall approve a 
gaming-related contract only if the Commission determines that 
the contract provides for: grounds and mechanisms for the 
termination of the contract and such other conditions as the 
Commission may be empowered to impose under this Act.
    Subsection (e) provides that not later than 90 days after 
the date on which a management contract or gaming-related 
contract is submitted to the Commission for approval the 
Commission shall either approve or disapprove the contract. The 
90 day period may be extended for 45 days if the Commission 
notifies the tribe in writing of the reason for the extension. 
The Indian tribe may bring an action in the Federal District 
Court for the District of Columbia to compel action by the 
Commission if it does not act in a timely manner. Any gaming-
related contract for an amount of $100,000 or less which is 
submitted to the Commission for approval by a person who holds 
a valid license that is in effect under this Act, shall be 
deemed to be approved if the Commission has not acted to 
approve or disapprove it within 90 days of its submission.
    Subsection (f) provides that after providing notice and 
hearing, the Commission shall have the authority to require 
appropriate contract modifications to ensure compliance with 
this Act or may void any contract if the Commission determines 
that it violates any of the provisions of this Act.
    Subsection (g) provides that no contract regulated by this 
Act may transfer or in any other manner convey any interest in 
real property unless specific statutory authority exists, all 
necessary approvals have been obtained and the conveyance is 
clearly specified in the contract.
    Subsection (h) provides that the authority of the Secretary 
under 25 U.S.C. 81 shall not extend to any contracts or 
agreements which are regulated pursuant to this Act.
    Subsection (i) provides that the Commission may not approve 
a contract if the Commission finds that: any person having a 
direct financial interest in, or management responsibility for 
such contract, and in the case of a corporation, any member of 
the board of directors or any stockholders who hold more than 
10 percent of its issued stock is an elected member of the 
governing body of the Indian tribe which is a party to the 
contract; has been convicted of any felony or any gaming 
offense; has knowingly and willfully provided materially false 
statements to the Commission or the Indian tribe or has refused 
to respond to questions propounded by the Commission; or has 
been determined to be a person whose prior activities, criminal 
record, reputation, habits or associations pose a threat to the 
public interest or to the effective regulation and control of 
gaming. The Commission may also disapprove any contract if it 
finds that; the contractor has unduly interfered or influenced 
for its gain any decision or process of tribal government 
relating to the gaming activity; the contractor has 
deliberately or substantially failed to comply with the terms 
of the contract; or a trustee, exercising the skill and 
diligence that a trustee is commonly held to, would not approve 
the contract.
            Section 14. Review of existing contracts; interim authority
    Subsection (a) provides that at any time after the 
Commission is sworn in and has promulgated regulations for the 
implementation of this Act the Commission shall notify each 
Indian tribe and management contractor who entered into a 
contract prior to the enactment of this Act that the Indian 
tribe is required to submit the contract to the Commission 
within 60 days of such notice. Any such contract shall be valid 
under this Act unless the Commission disapproves it under this 
section. Not later than 180 days after the submission of a 
contract for review, the Commission shall review it to 
determine if it meets the requirements of section 13. The 
Commission shall approve a contract if it determines that the 
contract meets the requirements of section 13 and the 
contractor has obtained all of the licenses required by this 
Act. If the Commission determines that a contract does not meet 
the requirements of section 13, the Commission shall provide 
written notice to the parties of the necessary modifications 
and the parties shall have 180 days to make the modifications.
    Subsection (b) provides that the Commissioners who are 
holding office on the date of enactment of this Act shall 
exercise the authorities vested in the Federal Indian Gaming 
Regulatory Commission (except those authorities specified in 
7(a)(1) and those authorities associated with the 
administration of the Commission as an independent agency as 
defined in 5 U.S.C. 104) until such time as the members of that 
Commission are sworn into office. Until such time as the 
Federal Indian Gaming Regulatory Commission promulgates 
regulations under this Act, the regulations promulgated under 
the Indian Gaming Regulatory Act of 1988 shall apply.
            Section 15. Civil penalties
    Subsection (a) provides that any person who violates this 
Act or the regulations promulgated pursuant to this Act, either 
by an act or an omission, shall be subject to a civil penalty 
of not more than $50,000 per day for each violation.
    Subsection (b) provides that the Commission shall assess 
the civil penalties authorized by this Act and the Attorney 
General shall collect them in a civil action. The Commission 
may seek to compromise any assessed civil penalty. In 
determining the amount of a civil penalty, the Commission shall 
take into account: the nature, circumstances, extent and 
gravity of the violation; with regard to the person found to 
have committed the violation, the degree of culpability, any 
history of prior violations, ability to pay and the effect on 
ability to continue to do business; and such other matters as 
justice may require.
    Subparagraph (c) provides that the Commission may order the 
temporary closure of all or part of an Indian gaming operation 
for substantial violation of this Act and the regulations 
promulgated by the Commission. Not later than 30 days after an 
order of temporary closure the Indian tribe or the individual 
owner of the gaming operation may request a hearing on the 
record to determine whether the order should be made permanent 
or dissolved. Not later than 30 days after a request for a 
hearing, the Commission shall hold the hearing and render a 
final decision within 30 days after the completion of the 
hearing.
            Section 16. Judicial review
    Any decision made by the Commission pursuant to sections 7, 
8, 10, 13, 14, and 15 shall constitute final agency decisions 
for purposes of appeal to the Federal District Court for the 
District of Columbia under the Administrative Procedures Act.
            Section 17. Commission funding
    Subsection (a) provides that the Commission shall establish 
an annual schedule of fees to be paid to it by each Class II 
and III gaming operation that is regulated by this Act. No 
gaming operation may be assessed more than 2 percent of its net 
revenues and the Commission cannot collect more than $25 
million in fees in any year. Fees are payable to the Commission 
on a monthly basis. The fees paid by a gaming operation may be 
reduced by the Commission to take into account that regulatory 
functions are performed by an Indian tribe, or an Indian tribe 
and a state. Failure to pay fees imposed by the Commission will 
be grounds for revocation of any license required under this 
Act for the operation of gaming activities. Any surplus 
assessments in any given year will be credited pro rata against 
such fees for the succeeding year.
    Subsection (b) provides that the Commission is authorized 
to assess license applicants, except for Indian tribes, for the 
actual cost of all reviews and investigations necessary to 
determine whether a license should be granted or denied.
    Subsection (c) provides that the Commission shall adopt an 
annual budget for each fiscal year. Any request for an 
appropriation pursuant to section 18 shall be submitted 
directly to the Congress.
            Section 18. Authorization of appropriations
    This section authorizes an appropriation of $5 million for 
the operation of the Commission for each of the fiscal years 
1997, 1998 and 1999 to remain available until expended.
            Section 19. Application of the Internal Revenue Code of 
                    1986
    Subsection (a) provides that the provisions of the Internal 
Revenue Code with regard to reporting and withholding taxes on 
winnings.
    Subsection (b) provides that the provisions of the Bank 
Secrecy Act relating to the reporting requirements for cash 
transactions of $10,000 or greater will apply to Indian gaming 
operations which are regulated by this Act.
    Subsection (c) provides that this section shall apply 
notwithstanding any other provision of law enacted before, on 
or after the date of enactment unless such other provision 
specifically cites this subsection.
    Subsection (d) provides that the Commission shall make 
available to a state or the governing body of an Indian tribe 
any law enforcement information it has obtained pursuant to 
section 7(d), unless otherwise prohibited by law, in order to 
assist the state or Indian tribe to carry out its 
responsibilities under this Act or any compact approved by the 
Secretary.

Section 3. Conforming amendments

    This section provides for several amendments to titles 10, 
18, 26, and 28 of the United States Code to conform them to the 
provisions of this Act.

                    Cost and Budgetary Consideration

    The cost estimate for S. 487, as calculated by the 
Congressional Budget Office is set forth below:

                                     U.S. Congress,
                               Congressional Budget Office,
                                  Washington, DC, October 26, 1995.
Hon. John McCain,
Chairman, Committee on Indian Affairs,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 487, the Indian 
Gaming Regulatory Act Amendments Act of 1995.
    Enacting S. 487 would affect direct spending or receipts. 
Therefore, pay-as-you-go procedures would apply to the bill.
    If you wish further details on this estimate, we will be 
pleased to provide them.
            Sincerely,
                                              James L. Blum
                                   (For June E. O'Neill, Director).

               CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

    1. Bill number: S. 487.
    2. Bill title: Indian Gaming Regulatory Act Amendments Act 
of 1995.
    3. Bill status: As ordered reported by the Senate Committee 
on Indian Affairs on August 9, 1995.
    4. Bill purpose: S. 487 would amend the Indian Gaming 
Regulatory Act to clarify the responsibilities of the Indian 
Gaming Commission. Licensing procedures for both Class II and 
Class III gaming would be expanded, and civil penalties for any 
violation of this Act would be increased. (Class II gaming 
includes games of chance such as bingo and certain card games; 
Class III gaming includes gambling activities like blackjack 
and slot machines.) In addition, the bill would raise the level 
of fees that may be collected each year by the Commission and 
would authorize appropriations of $5 million each fiscal year 
for fiscal years 1997 through 1999. Finally, S. 487 would 
create an Advisory Committee on Minimum Regulatory Requirements 
and Licensing Standards, which would cease to exist once it 
recommends minimum federal licensing and internal control 
standards.
    5. Estimated cost to the Federal Government: Assuming that 
the full amounts authorized are appropriated for each year, CBO 
estimates that spending under S. 487 would total about $15 
million over the next five years, as shown in the following 
table.

----------------------------------------------------------------------------------------------------------------
                                                              1995     1996     1997     1998     1999     2000 
----------------------------------------------------------------------------------------------------------------
                                                                                                                
                                    SPENDING SUBJECT TO APPROPRIATIONS ACTION                                   
                                                                                                                
Spending under current law:                                                                                     
    Budget authority \1\..................................        1  .......  .......  .......  .......  .......
    Estimated outlays.....................................        3    (\2\)  .......  .......  .......  .......
Proposed changes:                                                                                               
    Authorization level...................................  .......  .......        5        5        5  .......
    Estimated outlays.....................................  .......  .......        4        5        5        1
Spending under S. 487:                                                                                          
    Authorization level \1\...............................        1  .......        5        5        5  .......
    Estimated outlays.....................................        3    (\2\)        4        5        5        1
                                                                                                                
                                               ADDITIONAL REVENUES                                              
                                                                                                                
Estimated revenues........................................  .......    (\2\)    (\2\)    (\2\)    (\2\)    (\2\)
----------------------------------------------------------------------------------------------------------------
\1\ The 1995 level is the amount appropriated for that year. At this time, fiscal year 1996 appropriations have 
  not been enacted. Hence, the table does not include any amount for 1996. However, the conference agreement for
  the Department of the Interior and Related Agencies Appropriations bill includes $1 million for 1996.         
\2\ Less than $500,000.                                                                                         

    The costs of this bill fall within budget function 800.
    6. Basis of estimate: This estimate assumes that the 
amounts authorized will be appropriated for each year and that 
spending will occur at historical rates. Other provisions, 
including the creation of a temporary Advisory Committee, would 
result in no significant cost to the federal government.
    In addition to the authorization of appropriations, S. 487 
would authorize an increase in annual fees that may be paid to 
the Commission by Class II and Class III gaming operations. 
Such fees are treated as offsetting collections and may be 
spent without further appropriations. Fees may also be 
collected to cover the costs of licensing any non-Indian owned 
gaming establishment on Indian land. Currently, about $1.5 
million (the highest amount allowed by law) is collected by the 
Commission from Class II gaming operations. Under S. 487, the 
maximum amount allowed to be collected from both Class II and 
Class III operations would increase to $25 million. Based on 
information from the Commission, CBO expects that collections 
would eventually rise to an amount between $15 million and $25 
million. The highest amount attained would depend on several 
factors, including the way that Indian tribes and States 
regulate Indian gaming, the rate of growth of Indian gaming, 
and the complexity of the final regulations approved after 
recommendations by the Advisory Committee are submitted. 
Because the Commission can spend any amounts collected, we 
estimate that the change in collections would be matched by a 
change in spending, resulting in no net budgetary impact.
    S. 487 would increase civil penalties that could cause 
government receipts to increase, and thus would be subject to 
pay-as-you-go procedures. CBO estimates, however, that any such 
increase would be less than $500,000 per fiscal year.
    7. Pay-as-you-go considerations: Section 252 of the 
Balanced Budget and Emergency Deficit Control Act of 1985 sets 
up pay-as-you-go procedures for legislation affecting direct 
spending or receipts through 1998. CBO estimates that enacting 
S. 487 would increase federal receipts, but the increase would 
be less than $500,000 per year. The following table shows the 
estimated pay-as-you-go impact of this bill.

------------------------------------------------------------------------
                                         1996        1997        1998   
------------------------------------------------------------------------
Change in outlays...................      (\1\)       (\1\)       (\1\) 
Change in receipts..................          0           0           0 
------------------------------------------------------------------------
\1\ Not applicable.                                                     

    8. Estimated cost to State and local governments: None.
    9. Estimate comparison: None.
    10. Previous CBO estimate: None.
    11. Estimate prepared by: Rachel Robertson.
    12. Estimate approved by: Paul N. Van de Water, Assistant 
Director for Budget Analysis.

                      Regulatory Impact Statement

    Paragraph 11(b) of the rule XXVI of the Standing Rules of 
the Senate requires each report accompanying a bill to evaluate 
the regulatory and paperwork impact that would be incurred in 
carrying out the bill. The Committee believes that S. 487 will 
have a regulatory or paperwork impact.

                        Executive Communications

    The Committee received written testimony from the 
Department of Justice, the Department of the Interior, and the 
National Indian Gaming Commission for the hearing held on June 
22, 1995. The written testimony from the Administration is as 
follows:

  Statement of Kevin V. Di Gregory, Deputy Assistant Attorney General 
                           Criminal Division

    Chairman McCain, Chairman Gallegly, Vice Chairman Inouye, 
and members of the Committees, I am Kevin Di Gregory, Deputy 
Assistant Attorney General in the Criminal Division of the 
Department of Justice. Thank you for inviting the Department to 
present its views on Senate Bill 487, the Indian Gaming 
Regulatory Act Amendments.
    The Administration and the Attorney General greatly 
appreciate the efforts that you and the Vice Chairman have made 
over the course of the past several years to foster government-
to-government dialogue between the federal government, Indian 
tribes, and states concerning Indian gaming. The Department 
recognizes that S.487 is based on the Committee's thorough 
review of Indian gaming and your synthesis of the views 
presented to you by government leaders involved in the 
Committee's consultation process.
    As you well know, despite important economic gains made by 
Indian tribes in certain areas, Indian people continue to 
suffer serious economic deprivation, which exacerbates social 
problems in Indian country. The Indian Gaming Regulatory Act 
has provided one of the few successful avenues of economic 
development in Indian country, and Senate Bill 487 demonstrates 
the Committee's vital commitment to protect Indian gaming as a 
means of building strong trial government and economic self-
sufficiency within a regulatory system that preserves long-term 
viability of Indian gaming and shields Indian tribes and the 
public from organized crime and corrupting influences. At the 
same time, S. 487 continues to offer states a role in 
developing the regulatory framework for class III gaming by 
Indian tribes.
    In July 1994, the Department presented its position on 
Senate Bill 2230, the proposed Indian Gaming Regulatory Act 
Amendments of 1994, and we identified two primary concerns. 
First, we noted that the generation of the protracted 
litigation between the tribes and the states concerning class 
III gaming is ``the central failing of the IGRA.'' Second, the 
Department emphasized the vital importance of ensuring that an 
adequate regulatory base exists for Indian gaming. S. 487 
addresses both of those concerns.


                  the class iii gaming compact process


    S. 487 eliminates the provision that states are subject to 
suit unless they negotiate a compact in good faith, thereby 
avoiding potential 10th and 11th Amendment concerns with the 
IGRA.
    Under S. 487, states and Indian tribes have the opportunity 
to negotiate class III gaming compacts. State participation in 
the compacting is, however, voluntary and the states are not 
compelled to negotiate or regulate. In this way, potential 10th 
and 11th Amendment concerns are eliminated. I emphasize 
potential because the Department is defending the IGRA against 
an 11th Amendment challenge as amicus curiae before the Supreme 
Court and against a 10th Amendment challenge in the Ninth 
Circuit Court of Appeals as amicus curiae.
    If no class III gaming compact is concluded within the 
negotiation period, then the Secretary of the Interior becomes 
responsible for concluding the compact. The Secretary will 
choose class III gaming compact provisions from among 
alternative provisions submitted by the state and the affected 
Indian tribe that best meet the objectives of the Act.
    The Department recognizes that to a certain extent this new 
scheme will shift the burden of litigation to the Secretary, 
particularly on the scope of gaming issue. We defer to the 
Department of the Interior as to whether this shift is 
appropriate.


                  minimum federal regulatory standards


    Significantly, S. 487 provides for the establishment of 
federal minimum regulatory standards for Indian gaming. These 
standards are to be developed by an Advisory Committee composed 
of federal, tribal, and state officials, on which two 
Department of Justice employees are to be members. The Advisory 
Committee is to complete its work within 180 days, and 
thereafter, regulations incorporating the standards are to be 
promulgated by the reconfigured Federal Indian Gaming 
Regulatory Commission.
    Although the Department recognizes that many tribes have 
sophisticated regulatory regimes, the Department views the 
promulgation of uniform federal minimum standards for Indian 
gaming regulatory regimes as an important prudential measure. 
The S. 487 process for promulgating federal minimum regulatory 
standards with the aid of the Advisory Committee is consonant 
with the federal policy of promoting government-to-government 
relations with Indian tribes. The Department of Interior has 
suggested that use of the negotiated rulemaking is akin to the 
process underway pursuant to the Indian Self-Determination Act. 
That alternative also would be consonant with the government-
to-government relationship with tribes.
    The Department notes that S. 487, in fairness to Indian 
tribes with existing gaming operations, sets a 180-day grace 
period for compliance with the federal minimum regulatory 
standards. The Department also notes that for federal minimum 
regulatory standards to be effective, they must be uniform in 
application. Although the clear thrust of S. 487 is to apply 
federal minimum standards uniformly to all Indian gaming 
operations, section 12(e), which was created to ``grandfather'' 
in existing class III gaming compacts, somewhat confuses this 
issue. Therefore, the Department includes a proposed technical 
correction to section 12(e) in our attached addendum.
    Finally, although minimum standards are an integral part of 
well-regulated gaming, a fully funded FIGRC is equally 
important. The Department urges Congress to ensure that FIGRC 
is provided with sufficient resources to maintain and enforce 
the standards.


          allocation of regulatory responsibility to the figrc


    Senate Bill 487 amends the current regulatory structure of 
the IGRA by vesting the Federal Indian Gaming Regulatory 
Commission with regulatory authority over class III gaming, 
while the current law vests the NIGC with primary 
responsibility for regulating only class II gaming (i.e., 
bingo, pull-tabs, etc.). Accordingly, if an Indian tribe or 
management contractor operates class III gaming outside the 
scope of a class III gaming compact, the FIGRC would have the 
authority to seek both temporary and permanent closure orders 
for the operation, as well as monetary penalties up to $50,000 
per day. The Department believes that these stringent civil 
penalties are appropriate measures to deal with non-compacted 
class III gaming.
    FIGRC's increased authority includes the authority to bring 
civil enforcement actions. In general, it is the policy of the 
Department to propose such grants of independent litigating 
authority. Such independent authority invites inconsistent 
interpretations of federal law.


                          changes in state law


    S. 487 also addresses the issue of the effect that changes 
in state law have on existing compacts. S. 487 states that 
changes in state law have no effect on existing compacts. The 
Department believes that this provision resolves the 
uncertainty that currently exists in the IGRA.


                       after acquired trust lands


    The Department is presently defending the constitutionality 
of the ``after acquired'' lands provision of IGRA against an 
Appointments Clause challenge in the Ninth Circuit. Senate Bill 
487 eliminates the provision that requires the concurrence of 
the governor of a state before a tribe is allowed to game on 
lands acquired after the passage of IGRA. The Department 
continues to believe that there is in fact no Appointment 
Clause problem under the current law.


                     tax treatment of indian tribes


    Section 19(b)(1) of S. 487 would amend the current language 
of the IGRA relating to the application of the Internal Revenue 
Code to Indian gaming operations, apparently with the intent 
that Indian tribes receive the same treatment as states vis-a-
vis the federal wagering taxes. The Department reserves comment 
on this issue, as this is primarily a Department of the 
Treasury issue.
    Finally, we have included the Department of Justice's list 
of suggested technical corrections for your review.
    That concludes my prepared remarks. At this time, I would 
be pleased to respond to questions from the Committee Members.


    department of justice suggested technical corrections to s. 487


1. Section 4(16) Indian lands
    (B)(ii)(II) should read: ``held in trust by the United 
States for the benefit of an individual Indian.'' The omission 
of the italicized words appears to be a typographical error.
    (B)(iii) should be renumbered (B)(ii)(IV) because, a 
priori, Indian tribes have government authority over their own 
tribal trust lands.
2. Section 12(e)(1) Compacts entered into before the date of the 
        enactment of the Indian Gaming Regulatory Act Amendments of 
        1995
    The phrase ``Provided that the minimum regulatory 
requirements set forth in the Indian Gaming Regulatory Act 
Amendments of 1995 and the regulations promulgated thereunder 
are applied.''
    The addition of this phrase should make clear that federal 
minimum regulatory standards apply uniformly throughout the 
United States to all Indian gaming operations.
3. Section 19(b)(3) Statutory construction
    The word ``after'' should be substituted for the word 
``before'' used in this paragraph.
4. Section 7(e)(3)(A) Enforcement
    Rewrite Section 7(e)(3) to read, after (A) ``[* * * the 
Commission may] transmit such evidence as may be available 
concerning such act or practice as may constitute a violation 
of any Federal civil or criminal law to the Attorney General, 
who may institute the necessary civil or criminal proceedings. 
The Department of Justice may bring an action in the 
appropriate district court of the United States of the United 
States District court for the District of Columbia to enjoin 
such act or practice, and upon a proper showing, the court 
shall grant, without bond, a permanent or temporary injunction 
or restraining order.''
    At the end of Section 7(e)(3)(B) insert ``nor is a referral 
by the Commission a condition precedent to action by such 
agency or department.''
                              ----------                              


 Statement of John J. Duffy, Counselor to the Secretary, Department of 
                              the Interior

    Mr. Chairman and members of the committee, I am pleased to 
present the views of the Department of the Interior on S. 487, 
a bill proposing amendments to the Indian Gaming Regulatory Act 
of 1988.
    I want to begin by emphasizing that the department strongly 
supports tribes engaging in gaming activities. As a tool for 
tribal economic development, Indian gaming is working. Gaming 
tribes now have more funds available to provide their people 
with health care, education, and social services. Although 
there is no systematically collected data on the tribal use of 
gaming proceeds, information supplied by gaming tribes 
indicates that gaming revenues are used by tribes for the 
following purposes: (1) Infrastructure, new roads, water and 
sewer systems, and community centers; (2) economic development, 
land acquisitions, new business development, long-term 
investments; (3) community grants, payments to local 
governments for schools, police protection, and social service 
programs; (4) health care, funding health insurance programs, 
new medical facilities, and programs for the elderly; (5) 
education, scholarships, new school facilities, day care 
subsidies, school buses, and youth programs; and (6) housing, 
home construction, repairs and senior citizen housing. In 
addition, Indian gaming and related economic activities have 
improved reservation employment opportunities for tribal 
members and for members of the surrounding non-Indian 
communities as well. The benefits of Indian gaming are accruing 
to the approximately 150 Indian tribes which are currently 
operating class II or class III gaming establishments in 28 
States.
    The bill provides a framework for regulation of gaming 
activities on Indian lands. S. 487 requires the formulation of 
minimum Federal standards for the regulation and licensing of 
class II and class III gaming, as well as regulation of all 
contractors, suppliers, and industries associated with such 
gaming. We support the creation of such standards as long as 
their development and enforcement are consistent with the 
principles of tribal sovereignty and self-determination. 
Although the bill establishes a seven member advisory committee 
to develop recommendations for minimum Federal standards in the 
areas of background investigations, internal control systems 
and licensing standards, we are concerned that this process may 
not provide for enough tribal participation.
    With respect to the members of the current National Indian 
Gaming Commission, we believe that to provide some continuity 
during the transition, commissioners serving at the time of the 
passage of the act should be permitted to serve out their term.
    The bill also makes several proposed changes in the 
compacting process for class III gaming activities. While we 
understand and respect the rationale for these changes, we 
believe that the present process can work if the lack of 
certainty about the ability of tribes to sue states in Federal 
court is resolved by the courts in favor of the 
constitutionality of the Indian Gaming Regulatory Act of 1988.
    This concludes my statement. I will be happy to answer any 
questions the committee may have. Thank you.
                              ----------                              


   Testimony of Harold A. Monteau, Chairman, National Indian Gaming 
                               Commission

    Mr. Chairman, Members of the Committee, thank you for the 
opportunity to appear before you and offer testimony on S. 487. 
My name is Harold Monteau. I am Chairman of the National Indian 
Gaming Commission. With me today is Associate Commissioner Jana 
McKeag.
    If enacted, S. 487 would supersede Public Law 100-497, The 
Indian Gaming Regulatory Act of 1988. This Act established the 
National Indian Gaming Commission. The primary mission of the 
Commission is to monitor and oversee the regulation of Class II 
gaming such as bingo and pull-tabs conducted on Indian lands. 
The Commission reviews and approves Class II and Class III 
tribal gaming ordinances and management contracts. In addition, 
it has the authority to impose civil penalties or to close a 
gaming establishment for substantial violations of the 1988 
Act, regulations promulgated by the Commission, or tribal 
gaming ordinances.
    The Commission is also responsible for conducting 
background investigations of entities and of individuals with a 
financial interest in, or management responsibility for Class 
II management contracts, unless the contracts combines Class II 
and Class III activities. The Commission does not have the 
authority to conduct background investigations with respect to 
Class III management contracts. The regulation of Class III 
gaming is primarily the responsibility of the tribes and the 
states as set forth in the compacts negotiated between those 
parties.
    The amendments as proposed in S. 487 provide for: the 
establishment of a new Federal Indian Regulatory Gaming 
Commission (FIRGC), the regulation of gaming activities by 
tribes, the establishment of Federal minimum standards, the 
compacting of Class III gaming, regulatory oversight by the new 
Commission along with licensing of contractors, penalty 
assessment, and funding.
    These proposed amendments continue Congress' approach of 
recognizing that Indian tribes have the fundamental 
responsibility for regulating Class II gaming activities over 
Indian lands. The Commission supports this overall approach. 
The amendments also enhance and strengthen the Federal, tribal 
and state involvement in the overall gaming regulatory process. 
The Commission's role would be that of oversight and general 
monitoring so as to assure that Federal minimum standards are 
complied with. This approach is consistent with the government-
to-government relationship the United States has with Indian 
tribes. It is respectful of Tribal sovereignty.
    The compacting provisions for Class III gaming, likewise, 
would provide a non-compulsory mechanism for tribes and states 
to establish procedures for the conduct of such gaming 
activities. The amendments do this by not imposing requirements 
on the states to negotiate with tribes. Elimination of the 
compulsory aspects of the 1988 Act, effectively removes the 
10th and 11th Amendments issues raised by the states. These 
have been contentious issues for the tribes and the states, and 
have delayed the benefits of tribal economic development 
envisioned in the 1988 Act, through gaming.
    S. 487 proposes to change the way Commissioners are 
appointed. It also sets the terms of the Commissioners and sets 
certain qualifications for Commissioners. The number of 
Commissioners remains as under current law, three. The 
amendments designate that the Chairperson of the Commission as 
the Chief executive officer of the Commission. Certain powers 
that were conferred under the 1988 Act on the Chairman would be 
exercised by the full Commission with the enactment of these 
amendments.
    The fundamental nature of the operation and scope of 
authority of the Commission remains that of an independent 
regulatory authority. New Federal minimum standards are to be 
developed and promulgated as regulations of the Commission. 
During the interim, that is before the new Commissioners are 
appointed and the minimum standards are established, the 
existing regulatory framework is to be followed. Also, the 
existing Commissioners serve until they are replaced or 
nominated through the new process.
    Along with certain tribal and political qualifications, the 
amendments call for additional requirements of candidates for 
the Commission. While the Commission does not object that 
certain professional qualifications for Commissioners, the 
Executive branch should not be constrained by specific 
limitations by law to select and establish professional 
qualifications of candidates. Lengthening of the terms of the 
Commissioners to five years is viewed favorably; it provides 
the opportunity for greater experience on the Commission. 
Moreover, with the treatment of the Commission as an 
independent regulatory agency these five-year terms strengthen 
the independent status of the Commission.
    The amendments do not adequately deal with the transition 
of the Commissioners. At the least, the present Associate 
Commissioners terms should be completed prior to the 
appointment of the new Commissioners. This would assure 
continuity in the administration of the existing provisions of 
the 1988 Act and the implementation of the new ones.
    S. 487 provides a mechanism for establishing Federal 
minimum standards. The Commission supports the setting of 
minimum standards. The overall concept behind passage of the 
1988 Act was to assist tribes in the establishment of gaming as 
an economic opportunity for tribes and to protect the integrity 
of gaming for the tribes and the public. The setting of uniform 
minimum standards will assist in meeting Congressional intent.
    The minimum standards fall into two broad general 
categories: operational and regulatory. The operational aspects 
are concerned with such functions as internal controls, 
survelliance, security and auditing. The regulatory area is 
concerned with establishing procedures to assure that the 
operational standards are being complied with and that 
background investigations and licensing requirements are being 
met.
    Although the Commission welcomes and solicits the input of 
the tribes and the states in formulating those standards, the 
methodology set out in S. 487 is not conducive to prompt 
appointments of the Advisory Committee members. The process of 
appointments could be fairly lengthy and result in delays in 
the development and implementation of the Federal minimum 
standards. Essentially, the setting of minimum standards is 
that of creating operational and regulatory standards and 
procedures which serve to protect the integrity of gaming 
conducted by the tribes. If a method could be established for 
the prompt selection of an Advisory Committee and mandatory 
deadlines set, the concept could be made to work. However, the 
Advisory Committee would need to include some expertise by way 
of individuals with gaming regulatory and operational 
expertise.
    The appointment of the new Commissioners and promulgation 
of the regulations for the Federal minimum standards under the 
process set out in S. 487 could take several years to 
accomplish. The Commission recommends that this new framework 
be instituted during the transition period, even while the new 
Commissioners are being appointed and confirmed.
    The approach of recognizing tribal regulatory 
responsibility of gaming activities at the operational level in 
these amendments serves to assist in strengthening tribal 
government. Moreover, placing the Commission in the position of 
providing a backup role where minimum standards are not being 
followed is consonant with this overall concept. It also 
assures that safeguards exist to protect the integrity of 
gaming and protect the interests of the tribes and the general 
public. The Commission supports this general conceptional 
approach.
    S. 487 provides broader enforcement authority to the 
Commission. Where the Federal minimum standards are not being 
met with respect to both Class II and Class III gaming 
activities the Commission is given the authority to directly 
regulate these activities.
    To be able to carry out these particular functions and the 
others vested in the Commission, these amendments authorize the 
Commission to impose fees on Class III gaming. Existing law 
only authorizes the Commission to assess Class II gaming. Given 
the growth in gaming the Commission believes that such 
authorization is necessary and prudent. The amendments, 
however, provide for the assessment to be made against net 
revenues as opposed to gross revenues, as provided for in the 
current law. The Commission recommends that the assessment be 
on the gross revenues. The cost of regulation should be 
allocated across the regulated industry on the volume of 
activity, not the profitability of individual operations.
    The efficacy of the self-regulation provisions should be 
re-evaluated. The overall concept of the amendments and that of 
the 1988 Act was and is for tribes to be responsible for 
regulation. The role of the Commission is oversight and 
monitoring of tribal regulatory implementation. The amendments 
in S. 487 only authorize direct Commission regulatory action 
where Federal minimum standards are not being followed. 
Therefore, the self-regulation provisions appear to be 
redundant.
    As under existing law, the Commission by these amendments 
will continue to exercise the responsibility of reviewing and 
approving management contracts between Indian tribes and other 
entities. This particular function places the Commission in the 
position of examining the economic terms of the management 
contract negotiated by the tribes. This particular role is not 
one traditionally vested in a regulatory-type agency. Whether 
the Commission should continue to function in this capacity 
should be reconsidered. The Commission recommends that rather 
than second-guessing tribal business and economic decisions, 
the Commission could establish limits on the various components 
of management fees, including (1) management, (2) risk 
assumption, and (3) return on or of any capital investment.
    In summary the Commission supports many of the concepts in 
S. 487 and is preparing amendatory language changes for 
submission to the Committee. The Commission looks forward to 
working with the Committee on this bill.

                        Changes in Existing Law

    In compliance with subsection 12 of rule XXVI of the 
Standing Rules of the Senate, the Committee states that the 
enactment of S. 487 will result in the following changes in 24 
U.S.C. Sec. Sec. 2701 et seq., 10 U.S.C. Sec. 2323a(e)(1), 18 
U.S.C. Sec. Sec. 1166, 1167, and 1168, 28 U.S.C. 
Sec. Sec. 3701(2) and 3704(b), and Section 168(j)(4)(A)(iv) of 
the Internal Revenue Code of 1986, with existing language which 
is to be deleted in black brackets and the new language to be 
added in italic:

                 24 U.S.C. Sec. Sec. 2701 THROUGH 2721

Sec. 2701 [Congressional Findings

    [The Congress finds that--
          [(1) numerous Indian tribes have become engaged in or 
        have licensed gaming activities on Indian lands as a 
        means of generating tribal governmental revenue;
          [(2) Federal courts have held that section 81 of this 
        title requires Secretarial review of management 
        contracts dealing with Indian gaming, but does not 
        provide standards for approval of such contracts;
          [(3) existing Federal law does not provide clear 
        standards or regulations for the conduct of gaming on 
        Indian lands;
          [(4) a principal goal of Federal Indian policy is to 
        promote tribal economic development, tribal self-
        sufficiency, and strong tribal government;
          [(5) Indian tribes have exclusive right to regulate 
        gaming activity on Indian lands if the gaming activity 
        is not specifically prohibited by Federal law and is 
        conducted within a State which does not, as a matter of 
        criminal law and public policy, prohibit such gaming 
        activity.]

SEC. 2. CONGRESSIONAL FINDINGS.

    The Congress finds that--
          (1) Indian tribes are--
                  (A) engaged in the operation of gaming 
                activities on Indian lands as a means of 
                generating tribal government revenue; and
                  (B) licensing such activities;
          (2) clear Federal standards and regulations for the 
        conduct of gaming on Indian lands will assist tribal 
        governments in assuring the integrity of gaming 
        activities conducted on Indian lands;
          (3) a principal goal of Federal Indian policy is to 
        promote tribal economic development, tribal self-
        sufficiency, and strong Indian tribal governments;
          (4) while Indian tribes have the right to regulate 
        the operation of gaming activities on Indian lands, if 
        such gaming activities are--
                  (A) not specifically prohibited by Federal 
                law; and
                  (B) conducted within a State that as a matter 
                of public policy permits such gaming 
                activities,
        Congress has the authority to regulate the privilege of 
        doing business with Indian tribes in Indian country (as 
        defined in section 1151 of title 18, United States 
        Code);
          (5) systems for the regulation of gaming activities 
        on Indian lands should meet or exceed Federally 
        established minimum regulatory requirements;
          (6) the operation of gaming activities on Indian 
        lands has had a significant impact on commerce with 
        foreign nations, among the several States and with the 
        Indian tribes; and
          (7) the Constitution vests the Congress with the 
        powers to regulate Commerce with foreign nations and 
        among the several States, and with the Indian tribes, 
        and this Act is enacted in the exercise of those 
        powers.

Sec. 2702 [Congressional Declaration of Policy

    [The purpose of this chapter is--
          [(1) to provide a statutory basis for the operation 
        of gaming by Indian tribes as a means of promoting 
        tribal economic development, self-sufficiency, and 
        strong tribal governments;
          [(2) to provide a statutory basis for the regulation 
        of gaming by an Indian tribe adequate to shield it from 
        organized crime and other corrupting influences, to 
        ensure that the Indian tribe is the primary beneficiary 
        of the gaming operation, and to assure that gaming is 
        conducted fairly and honestly by both the operator and 
        players; and
          [(3) to declare that the establishment of independent 
        Federal regulatory authority for gaming on Indian 
        lands, the establishment of Federal standards for 
        gaming on Indian lands, and the establishment of a 
        National Indian Gaming Commission are necessary to meet 
        congressional concerns regarding gaming and to protect 
        such gaming as a means of generating tribal revenue.]

SEC 3. PURPOSES.

    The purposes of this Act are--
          (1) to ensure the right of Indian tribes to conduct 
        gaming activities on Indian lands in a manner 
        consistent with the decision of the Supreme Court in 
        California et al. v. Cabazon Band of Mission Indian et 
        al. (480 U.S. 202, 107 S. Ct. 1083, 94 L. Ed. 2d 244 
        (1987)), involving the Cabazon and Morongo Bands of 
        Mission Indians;
          (2) to provide a statutory basis for the conduct of 
        gaming activities on Indian lands as a means of 
        promoting tribal economic development, tribal self-
        sufficiency, and strong Indian tribal governments;
          (3) to provide a statutory basis for the regulation 
        of gaming activities on Indian lands by an Indian tribe 
        that is adequate to shield such activities from 
        organized crime and other corrupting influences, to 
        ensure that an Indian tribal government is the primary 
        beneficiary of the operation of gaming activities, and 
        to ensure that gaming is conducted fairly and honestly 
        by both the operator and players; and
          (4) to declare that the establishment of independent 
        Federal regulatory authority for the conduct of gaming 
        activities on Indian land and the establishment of 
        Federal minimum regulatory requirements for the conduct 
        of gaming activities on Indian lands are necessary to 
        protect such gaming.

Sec. 2703 Definitions

    For the purposes of this Chapter--
          [(1) The terms ``Attorney General'' means the 
        Attorney General of the United States.
          [(2) The term ``Chairman'' means the Chairman of the 
        National Indian Gaming Commission.
          [(3) The term ``Commission'' means the national 
        Indian Gaming Commission established pursuant to 
        section 2704 of this title.
          [(4) The term ``Indian lands'' means--
                  [(A) all lands within the limits of any 
                Indian reservation; and
                  [(B) any lands title to which is either held 
                in trust by the United States for the benefit 
                of any Indian Tribe or individual or held by 
                any Indian tribe or individual section to 
                restriction by the United States against 
                alienation and over which an Indian tribe 
                exercises governmental power.
          [(5) The term ``Indian tribe'' means any Indian 
        tribe, band, nation, or other organized group or 
        community of Indians which--
                  [(A) is recognized as eligible by the 
                Secretary for the special programs and services 
                provided by the United States to Indians 
                because of their status as Indians, and
                  [(B) is recognized as possessing powers of 
                self-government.
          [(6) The term ``class I gaming'' means social gaming 
        solely for prizes of minimal value or traditional forms 
        of Indian gaming engaged in by individuals as a part 
        of, or in connection with, tribal ceremonies or 
        celebrations.]
          [(1) Applicant.--The term ``applicant'' means any 
        person who applies for a license pursuant to this Act, 
        including any person who applies for a renewal o9f a 
        license.
          [(2) Advisory Committee.--The term ``Advisory 
        Committee'' means the Advisory Committee on Minimum 
        Regulatory Requirements and Licensing Standards 
        established under section 9(a).
          [(3) Attorney General.--The term ``Attorney General'' 
        means the Attorney General of the United States.
          [(4) Chairperson.--The term ``Chairperson'' means the 
        Chairperson of the Federal Indian Gaming Regulatory 
        Commission 4stablished under section 5.
          [(5) Class I Gaming.-- The term ``class I gaming'' 
        means social games played solely for prizes of minimal 
        value or traditional forms of Indian gaming engaged in 
        by individuals as part of, or in connection with, 
        tribal ceremonies or celebrations.
          [(7)](6)(A) The term ``class II gaming'' means--
                  (i) the game of change commonly known as 
                bingo (whether or not electronic computer, or 
                other technologic aids are used in connection 
                therewith)--
                          (I) which is played for prizes, 
                        including monetary prizes, with cards 
                        bearing numbers or other designations,
                          (II) in which the holder of the card 
                        covers such numbers or designations 
                        when objects, similarly numbered or 
                        designated, are drawn or electronically 
                        determined, and
                          (III) in which the game is won by the 
                        first person covering a previously 
                        designated arrangement of numbers or 
                        designations on such cards,
                including (if played in the same location) 
                pull-tabs, lotto, punch boards, tip jars, 
                instant bingo, and other games similar to 
                bingo, and
                  (ii) card games that--
                          (I) are explicitly authorized by the 
                        laws of the State, or
                          (II) are not explicitly prohibited by 
                        the laws of the State and are played at 
                        any location in the State,
                but only is such card games are played in 
                conformity with those laws and regulations (if 
                any) of the State regarding hours or periods of 
                operation of such card games or limitations on 
                wagers or pot sizes in such card games.
          (B) The term ``class II gaming'' does not include--
                  (i) any banking card games, including 
                baccarat, chemin de fer, or blackjack (21), or
                  (ii) electronic or electromechanical 
                facsimiles of any game of chance or slot 
                machines of any kind.
          (C) Notwithstanding any other provision of this 
        paragraph, the term ``class II gaming'' includes those 
        card games played in the State of Michigan, the State 
        of North Dakota, the State of South Dakota, or the 
        State of Washington, that were actually operated in 
        such State by an Indian tribe on or before May 1, 1988, 
        but only to the extent of the nature and scope of the 
        card games that were actually operated by an Indian 
        tribe in such State on or before such date, as 
        determined by the Chairman.
          (D) Notwithstanding any other provision of this 
        paragraph, the term ``class II gaming'' includes, 
        during the 1-year period beginning on October 17, 1988, 
        any gaming described in subparagraph (B)(ii) that was 
        legally operated on Indian lands on or before May 1, 
        1988, if the Indian tribe having jurisdiction over the 
        lands on which such gaming was operated requests the 
        State, by no later than the date that is 30 days after 
        October 17, 1988, to negotiate a Tribal-State compact 
        under section 2710(d)(3) of this title.
          (E) Notwithstanding any other provision of this 
        paragraph, the term ``class II gaming'' includes, 
        during the 1-year period beginning on December 17, 
        1991, any gaming described in subparagraph (B)(ii) that 
        was legally operated on Indian lands in the State of 
        Wisconsin on or before May 1, 1988, if the Indian 
        tribes having jurisdiction over the lands on which such 
        gaming was operated requested the State, by no later 
        than November 16, 1988, to negotiate a Tribal-State 
        compact under section 2710(d)(3) of this title.
          (F) If, during the 1-year period described in 
        subparagraph (E), there is a final judicial 
        determination that the gaming described in subparagraph 
        (E) is not legal as a matter of State law, then such 
        gaming on such Indian land shall cease to operate on 
        the date next following the date of such judicial 
        decision.
          [(8)](7) The term ``class III gaming'' means all 
        forms of gaming that are not class I gaming or class II 
        gaming.
          [(9) The term ``net revenues'' means gross revenues 
        of an Indian gaming activity less amounts paid out as, 
        or paid for, prizes and total operating expenses, 
        excluding management fees.
          [(10) The term ``Secretary'' means the Secretary of 
        the Interior.]
          (8) Commission.--The term ``Commission'' means the 
        Federal Indian Gaming Regulatory Commission established 
        under section 5.
          (9) Compact.--The term ``compact'' means an agreement 
        relating to the operation of class III gaming on Indian 
        lands that is entered into by an Indian tribe and a 
        State and that is approved by the Secretary.
          (10) Gaming Operation.--The term ``gaming operation'' 
        means an entity that conducts class II or class III 
        gaming on Indian lands.
          (11) Gaming-Related Contract.--The term ``gaming-
        related contract'' means any agreement for an amount of 
        more than $50,000 per year--
                  (A) under which an Indian tribe or an agent 
                of any Indian tribe procures gaming materials, 
                supplies, equipment, or services that are used 
                in the conduct of a class II or class III 
                gaming activity, or
                  (B) financing contracts or agreements for any 
                facility in which a gaming activity is to be 
                conducted.
          (12) Gaming-Related Contractor.--The term ``gaming-
        related contractor'' means any person who enters into a 
        gaming related contract with an Indian tribe or an 
        agent of an Indian tribe, including any person with a 
        financial interest in such contract.
          (13) Gaming Service Industry.--The term ``gaming 
        service industry'' means any form of enterprise that 
        provides goods or services that are used in conjunction 
        with any class II or class III gaming activity, in any 
        case in which--
                  (A) the proposed agreement between the 
                enterprise and a class II or class III gaming 
                operation, or the aggregate of such agreements 
                is for an amount of not less than $100,000 per 
                year; or
                  (B) the amount of business conducted by such 
                enterprise with any such gaming operation in 
                the 1-year period preceding the effective date 
                of the proposed agreement between the 
                enterprise and a class II or class III gaming 
                operation was not less than $250,000.
          (14) Indian Lands.--The term ``Indian lands'' means--
                  (A) all lands within the limits of any Indian 
                reservation; and
                  (B) any lands--
                          (i) the title to which is held in 
                        trust by the United States for the 
                        benefit of any Indian tribe; or
                          (ii)(I) the title to which is--
                                  (aa) held by an Indian tribe 
                                subject to a restriction by the 
                                United States against 
                                alienation;
                                  (bb) held in trust by the 
                                United States for the benefit 
                                of an individual Indian; or
                                  (cc) held by an individual 
                                subject to restriction by the 
                                United States against 
                                alienation; and
                          (II) over which an Indian tribe 
                        exercises governmental power.
          (15) Indian Tribe.--The term ``Indian tribe'' means 
        any Indian tribe, band, nation, or other organized 
        group or community of Indians that--
                  (A) is recognized as eligible by the 
                Secretary for the special programs and services 
                provided by the United States to Indians 
                because of their status as Indians; and
                  (B) is recognized as possessing powers of 
                self-government.
          (16) Key Employee.--The term ``key employee'' means 
        any individual employed in a gaming operation licensed 
        pursuant to this Act in a supervisory capacity or 
        empowered to make any discretionary decision with 
        regard to the gaming operation, including any pit boss, 
        shift boss, credit executive, cashier supervisor, 
        gaming facility manager or assistant manager, or 
        manager or supervisor of security employees.
          (17) Management Contract.--The term ``management 
        contract'' means any contract or collateral agreement 
        between an Indian tribe and a contractor; if such 
        contract or agreement provides for the management of 
        all or part of a gaming operation.
          (18) Management Contractor.--The term ``management 
        contractor'' means any person entering into a 
        management contract with an Indian tribe or an agent of 
        the Indian tribe for the management of a gaming 
        operation, including any person with a financial 
        interest in such contract.
          (19) Material Control.--The term ``material control'' 
        means the exercise of authority of supervision or the 
        power to make or cause to be made any discretionary 
        decision with regard to matters which have a 
        substantial effect on the financial or management 
        aspects of a gaming operation.
          (20) Net Revenues.--The term ``net revenues'' means 
        the gross revenues of an Indian gaming activity reduced 
        by the sum of--
                  (A) any amounts paid out or paid for as 
                prizes; and
                  (B) the total operating expenses associated 
                with the gaming activity, excluding management 
                fees.
          (21) Person.--The term ``person'' means an 
        individual, firm, corporation, association, 
        organization, partnership, trust, consortium, joint 
        venture, or entity.
          (22) Secretary.--The term ``Secretary'' means the 
        Secretary of the Interior.

Sec. 2704 [National Indian Gaming Commission

    [(a) Establishment.--There is established within the 
Department of the Interior a Commission to be known as the 
National Indian Gaming Commission.
    [(b) Composition; Investigation; Term of Office; Removal.--
          [(1) The Commission shall be composed of three full-
        time members who shall be appointed as follows:
                  [(A) a Chairman, who shall be appointed by 
                the President with the advice and consent of 
                the Senate; and
                  [(B) two associate members who shall be 
                appointed by the Secretary of the Interior.
          [(2)(A) The Attorney General shall conduct a 
        background investigation on any person considered for 
        appointment to the Commission.
          [(B) The Secretary shall publish in the Federal 
        Register the name and other information the Secretary 
        deems pertinent regarding a nominee for membership on 
        the Commission and shall allow a period of not less 
        than thirty days for receipt of public comment.
          [(3) Not more than two members shall be of the same 
        political party. At least two members of the Commission 
        shall be enrolled members of any Indian tribe.
          [(4)(A) Except as provided in subparagraph (B), the 
        term of office of the members of the Commission shall 
        be three years.
          [(B) Of the initial members of the Commission--
                  [(i) two members, including the Chairman, 
                shall have a term of office of three years; and
                  [(ii) one member shall have a term of office 
                of one year.
          [(5) No individual shall be eligible for any 
        appointment to, or to continue service on, the 
        Commission, who--
                  [(A) has been convicted of a felony or gaming 
                offense;
                  [(B) has any financial interest in, or 
                management responsibility for, any gaming 
                activity; or
                  [(C) has a financial interest in, or 
                management responsibility for, any management 
                contract approved pursuant to section 2711 of 
                this title.
          [(6) A Commissioner may only be removed from office 
        before the expiration of the term of office of the 
        member by the President (or, in the case of associate 
        member, by the Secretary) for neglect of duty, or 
        malfeasance in office, or for other good cause shown.
    [(c) Vacancies.--Vacancies occurring on the Commission 
shall be filled in the same manner as the original appointment. 
A member may serve after the expiration of his term of office 
until his successor has been appointed, unless the member has 
been removed for cause under subsection (b)(6) of this section.
    [(d) Quorum.--Two members of the Commission, at least one 
of which is the Chairman or Vice Chairman, shall constitute a 
quorum.
    [(e) Vice Chairman.--The Commission shall select, by 
majority vote, one of the members of the Commission to serve as 
Vice Chairman. The Vice Chairman shall serve as Chairman during 
meetings of the Commission in the absence of the Chairman.
    [(f) Meetings.--The Commission shall meet at the call of 
the Chairman or a majority of its members, but shall meet at 
least once every 4 months.
    [(g) Compensation.--
          [(1) The Chairman of the Commission shall be paid at 
        a rate equal to that of level IV of the Executive 
        Schedule under section 5315 of Title 5.
          [(2) the associate members of the Commission shall 
        each be paid at a rate equal to that of level V of the 
        Executive Schedule under section 5316 of Title 5.
          [(3) All members of the Commission shall be 
        reimbursed in accordance with Title 5, for travel, 
        subsistence, and other necessary expenses incurred by 
        them in the performance of their duties.

Sec. 2705 [Powers of the Chairman

    [(a) The Chairman, on behalf of the Commission, shall have 
power, subject to an appeal to the Commission, to--
          [(1) issue orders of temporary closure of gaming 
        activities as provided in section 2713(b) of this 
        title;
          [(2) levy and collect civil fines as provided in 
        section 2713(a) of this title;
          [(3) approve tribal ordinances or resolutions 
        regulating class II gaming and class III gaming as 
        provided in section 2710 of this title; and
          [(4) approve management contracts for class II gaming 
        and class III gaming as provided in sections 2710(d)(9) 
        and 2711 of this title.
    [(b) The Chairman shall have such other powers as may be 
delegated by the Commission.

Sec. 2706 [Powers of the Commission

    [(a) Budget Approval; Civil Fines; Fees; Subpoenas; 
Permanent Orders.--The Commission shall have the power, not 
subject to delegation--
          [(1) upon the recommendation of the Chairman, to 
        approve the annual budget of the Commission as provided 
        in section 2717 of this title;
          [(2) to adopt regulations for the assessment and 
        collection of civil fines as provided in section 
        2713(a) of this title;
          [(3) by an affirmative vote of not less than 2 
        members, to establish the rate of fees as provided in 
        section 2717 of this title; and
          [(4) by an affirmative vote of not less than 2 
        members, to authorize the Chairman to issue subpoenas 
        as provided in section 2715 of this title; and
          [(5) by an affirmative vote of not less than 2 
        members and after a full hearing, to make permanent a 
        temporary order of the Chairman closing a gaming 
        activity as provided in section 2713(b)(2) of this 
        title.
    [(b) Monitoring; Inspection of Premises; Investigations; 
Access to Records; Mail; Contracts; Hearings; Oaths; 
Regulations.--The Commission--
          [(1) shall monitor class II gaming conducted on 
        Indian lands on a continuing basis;
          [(2) shall inspect and examine all premises located 
        on Indian lands on which class II gaming is conducted;
          [(3) shall conduct or cause to be conducted such 
        background investigations as may be necessary;
          [(4) may demand access to and inspect, examine, 
        photocopy, and audit all papers, books, and records 
        respecting gross revenues of class II gaming conducted 
        on Indian lands and any other matters necessary to 
        carry out the duties of the Commission under this 
        chapter.
          [(5) may use the United States mail in the same 
        manner and under the same conditions as any department 
        or agency of the United States;
          [(6) may procure supplies, services, and property by 
        contract in accordance with applicable Federal laws and 
        regulations;
          [(7) may enter in contracts with Federal, State, 
        tribal and private entities for activities necessary to 
        the discharge of the duties of the Commission and, to 
        the extent feasible contract the enforcement of the 
        Commission's regulations with the Indian tribes;
          [(8) may hold such hearings, sit and act at such 
        times and places, take such testimony, and receive such 
        evidence as the Commission deems appropriate;
          [(9) may administer oaths or affirmations to 
        witnesses appearing before the Commission; and
          [(10) shall promulgate such regulations and 
        guidelines as it deems appropriate to implement the 
        provisions of this chapter.
    [(c) Report.--The Commission shall submit a report with 
minority views, if any, to the Congress on December 31, 1989, 
and every two years thereafter. The report shall include 
information on--
          [(1) whether the associate commissioners shall 
        continue as full or part-time officials;
          [(2) funding, including income and expenses, of the 
        Commission;
          [(3) recommendations for amendments to the chapter; 
        and
          [(4) any other matter considered appropriate by the 
        Commission.

Sec. 2707 [Commission staffing

    [(a) General Counsel.--The Chairman shall appoint a General 
Counsel to the Commission who shall be paid at the annual rate 
of basic pay payable for GS-18 of the General Schedule under 
section 5332 of Title 5.
    [(b) Staff.--The Chairman shall appoint and supervise other 
staff of the Commission without regard to the provisions of 
Title 5, governing appointments in the competitive service. 
Such staff shall be paid without regard to the provisions of 
chapter 51 and subchapter III of chapter 53 of such title 
relating to classification and General Schedule pay rates, 
except that no individual so appointed may receive pay in 
excess of the annual rate of basic pay payable for GS-17 of the 
General Schedule under section 5332 of that title.
    [(c) Temporary Services.--The Chairman may procure 
temporary and intermittent services under section 3109(b) of 
Title 5, but at rates for individuals not to exceed the daily 
equivalent of the maximum annual rate of basic pay payable for 
GS-18 of the General Schedule.
    [(d) Federal Agency Personnel.--Upon the request of the 
Chairman, the head of any Federal agency is authorized to 
detail any of the personnel of such agency to the Commission to 
assist the Commission in carrying out its duties under this 
chapter, unless otherwise prohibited by law.
    [(e) Administrative Support Services.--The Secretary or 
Administrator of General Services shall provide to the 
Commission on a reimbursable basis such administrative support 
services as the Commission may request.

Sec. 2708 [Commission--access to information

    [The Commission may secure from any department or agency of 
the United States information necessary to enable it to carry 
out this chapter. Upon the request of the Chairman, the head of 
such department or agency shall furnish such information to the 
Commission, unless otherwise prohibited by law.

Sec. 2709 [Interim authority to regulate gaming

    [Notwithstanding any other provision of this chapter, the 
Secretary shall continue to exercise those authorities vested 
in the Secretary on the day before October 17, 1988, relating 
to the supervision of Indian gaming until such time as the 
Commission is organized and prescribes regulations. The 
Secretary shall provide staff and support assistance to 
facilitate an orderly transition to regulation of Indian gaming 
by the Commission.

Sec. 2710 [Tribal gaming ordinances

    [(a) Exclusive Jurisdiction of Class I Gaming Activity.--
          [(1) Class I gaming on Indian lands is within the 
        exclusive jurisdiction of the Indian tribes and shall 
        not be subject to the provisions of this chapter.
          [(2) Any class II gaming on Indian lands shall 
        continue to be within the jurisdiction of the Indian 
        tribes, but shall be subject to the provisions of this 
        chapter.
    [(b) Regulation of Class II Gaming Activity; Net Revenue 
Allocation; Audits; Contracts.--
          [(1) An Indian tribe may engage in, or license and 
        regulate, class II gaming on Indian lands within such 
        tribe's jurisdiction, if--
                  [(A) such Indian gaming 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), and
                  [(B) the governing body of the Indian tribe 
                adopts an ordinance or resolution which is 
                approved by the Chairman.
        A separate license issued by the Indian tribe shall be 
        required for each place, facility, or location on 
        Indian lands at which class II gaming is conducted.
          [(2) The Chairman shall approve any tribal ordinance 
        or resolution concerning conduct, or regulation of 
        class II gaming on the Indian lands within the tribe's 
        jurisdiction if such ordinance or resolution provides 
        that--
                  [(A) except as provided in paragraph (4), the 
                Indian tribe will have the sole proprietary 
                interest and responsibility for the conduct of 
                any gaming activity;
                  [(B) net revenues from any tribal gaming are 
                not to be used for purposes other than--
                          [(i) to fund tribal government 
                        operations or programs;
                          [(ii) to provide for the general 
                        welfare of the Indian tribe and its 
                        members;
                          [(iii) to promote tribal economic 
                        development;
                          [(iv) to donate to charitable 
                        organizations; or
                          [(v) to help fund operations of local 
                        government agencies;
                  [(C) annual outside audits of the gaming 
                which may be encompassed within existing 
                independent tribal audit systems, will be 
                provided by the Indian tribe to the Commission;
                  [(D) all contracts for supplies, services, or 
                concessions for a contract amount in excess of 
                $25,000 annually (except contracts for 
                professional legal or accounting services) 
                relating to such gaming shall be subject to 
                independent audits;
                  [(E) 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; and
                  [(F) there is an adequate system which--
                          [(i) ensures that background 
                        investigations are conducted on the 
                        primary management officials and key 
                        employees of the gaming enterprise and 
                        that oversight of such officials and 
                        their management is conducted on an 
                        ongoing basis; and
                          [(ii) includes--
                                  [(I) tribal licenses for 
                                primary management officials 
                                and key employees of the gaming 
                                enterprise with prompt 
                                notification to the Commission 
                                of the issuance of such 
                                license;
                                  [(II) a standard whereby any 
                                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 of gaming, 
                                or create or enhance the 
                                dangers of unsuitable, unfair, 
                                or illegal practices and 
                                methods and activities in the 
                                conduct of gaming shall not be 
                                eligible for employment; and
                                  [(III) notification by the 
                                Indian tribe to the Commission 
                                of the results of such 
                                background check before the 
                                issuance of any of such 
                                licenses.
          [(3) Net revenues from any class II gaming activities 
        conducted or licensed by any Indian tribe may be used 
        to make per capita payments to members of the Indian 
        tribe only if--
                  [(A) the Indian tribe has prepared a plan to 
                allocate revenues to uses authorized by 
                paragraph (2)(B);
                  [(B) the plan is approved by the Secretary as 
                adequate, particularly with respect to uses 
                described in clause (i) or (iii) of paragraph 
                (2)(B);
                  [(C) the interests of minors and other 
                legally incompetent person who are entitled to 
                receive any of the per capita payments are 
                protected and preserved and the per capita 
                payments are disbursed to the parents or legal 
                guardian of such minors or legal incompetents 
                is such amounts as may be necessary for health, 
                education, or welfare, of the minor or other 
                legally incompetent person under a plan 
                approved by the Secretary and the governing 
                body of the Indian tribe; and
                  [(D) the per capita payments are subject to 
                Federal taxation and tribes notify members of 
                such tax liability when payments are made.
          [(4)(A) A tribal ordinance or resolution may provide 
        for the licensing or regulation of class II gaming 
        activities owned by any person or entity other than the 
        Indian tribe and conducted on Indian lands, only if the 
        tribal licensing requirements include the requirements 
        described in the subclauses of subparagraph (B)(i) and 
        are at least as restrictive as those established by 
        State law governing similar gaming within the 
        jurisdiction of the Indian tribe, shall be eligible to 
        receive a tribal license to own a class II gaming 
        activity conducted on Indian lands within the 
        jurisdiction of the Indian tribe if such person or 
        entity would not be eligible to receive a State license 
        to conduct the same activity within the jurisdiction of 
        the State.
          [(B)(i) The provisions of subparagraph (A) of this 
        paragraph and the provisions of subparagraphs (A) and 
        (B) of paragraph (2) shall not bar the continued 
        operation of an individually owned class II gaming 
        operation that was operating on September 1, 1986, if--
                  [(I) such gaming operation is licensed and 
                regulated by an Indian tribe pursuant to an 
                ordinance reviewed and approved by the 
                Commission in accordance with section 2712 of 
                this title,
                  [(II) income to the Indian tribe from such 
                gaming is used only for the purposes described 
                in paragraph (2)(B) of this subsection,
                  [(III) not less than 60 percent of the net 
                revenues is income to the Indian tribe, and
                  [(IV) the owner of such gaming operation pays 
                an appropriate assessment to the National 
                Indian Gaming Commission under section 
                2717(a)(1) of this title for regulation of such 
                gaming.
          [(ii) The exemption from the application of this 
        subsection provided under this subparagraph may not be 
        transferred to any person or entity and shall remain in 
        effect only so long as the gaming activity remains 
        within the same nature and scope as operated on October 
        17, 1988.
          [(iii) Within sixty days of October 17, 1988, the 
        Secretary shall prepare a list of each individually 
        owned gaming operation to which clause (i) applies and 
        shall publish such list in the Federal Register.
    [(c) Issuance of Gaming License; Certificate of Self-
regulation.--
          [(1) The Commission may consult with appropriate law 
        enforcement officials concerning gaming licenses issued 
        by an Indian tribe and shall have thirty days to notify 
        the Indian tribe of any objections to issuance of such 
        license.
          [(2) If, after the issuance of a gaming license by an 
        Indian tribe, reliable information is received from the 
        Commission indicating that a primary management 
        official or key employee does not meet the standard 
        established under subsection (b)(2)(F)(ii)(II) of this 
        section, the Indian tribe shall suspend such license 
        and, after notice and hearing, may revoke such license.
          [(3) Any Indian tribe which operates a class II 
        gaming activity and which--
                  [(A) has continuously conducted such activity 
                for a period of not less than three years, 
                including at least one year after October 17, 
                1988; and
                  [(B) has otherwise complied with the 
                provisions of this section may petition the 
                Commission for a certificate of self-
                regulation.
          [(4) The Commission shall issue a certificate of 
        self-regulation if it determines from available 
        information, and after a hearing if requested by the 
        tribe, that the tribe has--
                  [(A) conducted its gaming activity in a 
                manner which--
                          [(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;
                  [(B) adopted and is implementing adequate 
                systems for--
                          [(i) accounting for all revenues from 
                        the activity;
                          [(ii) investigation, licensing, and 
                        monitoring of all employees of the 
                        gaming activity; and
                          [(iii) investigation, enforcement and 
                        prosecution of violations of its gaming 
                        ordinance and regulations; and
                  [(C) conducted the operation on a fiscally 
                and economically sound basis.
          [(5) During any year in which a tribe has a 
        certificate of self-regulation--
                  [(A) the tribe shall not be subject to the 
                provisions of paragraphs (1), (2), (3), and (4) 
                of section 2706(b) of this title;
                  [(B) the tribe shall continue to submit an 
                annual independent audit as required by subsec. 
                (b)(2)(C) of this section and shall submit to 
                the Commission a complete resume on all 
                employees hired and licensed by the tribe 
                subsequent to the issuance of a certificate of 
                self-regulation; and
                  [(C) the Commission may not assess a fee on 
                such activity pursuant to section 2717 of this 
                title in excess of one quarter of 1 per centum 
                of the gross revenue.
          [(6) The Commission may, for just cause and after an 
        opportunity for a hearing, remove a certificate of 
        self-regulation by majority vote of its members.
    [(d) Class III Gaming Activities; Authorization; 
Revocation; Tribal-State Compact.--
          [(1) Class III gaming activities shall be lawful on 
        Indian lands only if such activities are--
                  [(A) authorized by an ordinance or resolution 
                that--
                          [(i) is adopted by the governing body 
                        of the Indian tribe having jurisdiction 
                        over such lands,
                          [(ii) meets the requirements of 
                        subsection (b) of this section, and
                          [(iii) is approved by the Chairman.
                  [(B) located in a State that permits such 
                gaming for any purpose by any person, 
                organization, or entity, and
                  [(C) conducted in conformance with a Tribal-
                State compact entered into by the Indian tribe 
                and the State under paragraph (3) that is in 
                effect.
          [(2)(A) If any Indian tribe proposes to engage in, or 
        to authorize any person or entity to engage in, a class 
        III gaming activity on Indian lands of the Indian 
        tribe, the governing body of the Indian tribe shall 
        adopt and submit to the Chairman an ordinance or 
        resolution that meets the requirements of subsection 
        (b) of this section.
          [(B) The Chairman shall approve any ordinance or 
        resolution described in subparagraph (A), unless the 
        Chairman specifically determines that--
                  [(i) the ordinance or resolution was not 
                adopted in compliance with the governing 
                documents of the Indian tribe, or
                  [(ii) the tribal governing body was 
                significantly and unduly influenced in the 
                adoption of such ordinance or resolution by any 
                person identified in section 2711 (e)(1)(D) of 
                this title.
        Upon the approval of such an ordinance or resolution, 
        the Chairman shall publish in the Federal Register such 
        ordinance or resolution and the order of approval.
          [(C) Effective with the publication under 
        subparagraph (B) of an ordinance or resolution adopted 
        by the governing body of an Indian tribe that has been 
        approved by the Chairman under subparagraph (B), class 
        III gaming activity on the Indian lands of the Indian 
        tribe shall be fully subject to the terms and 
        conditions of the Tribal-State compact entered into 
        under paragraph (3) by the Indian tribe that is in 
        effect.
          [(D)(i) The governing body of an Indian 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 authorized class 
        III gaming on the Indian lands of the Indian tribe. 
        Such revocation shall render class III gaming illegal 
        on the Indian lands of such Indian tribe.
          [(ii) The Indian tribe shall submit any revocation 
        ordinance or resolution described in clause (i) to the 
        Chairman. 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.
          [(iii) Notwithstanding any provision of this 
        subsection--
                  [(I) any person or entity operating a class 
                III gaming activity pursuant to this paragraph 
                on the date on which an ordinance or resolution 
                described in clause (i) that revokes 
                authorization for such class III gaming 
                activity is published in the Federal Register 
                may, during the 1-year period beginning on the 
                date on which such revocation ordinance or 
                resolution is published under clause (ii), 
                continue to operate such activity in 
                conformance with the Tribal-State compact 
                entered into under paragraph (3) that is in 
                effect, and
                  [(II) any civil action that arises before, 
                and any crime that is committed before, the 
                close of such 1-year period shall not be 
                affected by such revocation ordinance or 
                resolution.
          [(3)(A) Any Indian tribe having jurisdiction over the 
        Indian lands upon which a class III gaming activity is 
        being conducted, or is to be conducted, shall request 
        the State in which such lands are located to enter into 
        negotiations for the purpose of entering into a Tribal-
        State compact governing the conduct of gaming 
        activities. Upon receiving such a request, the State 
        shall negotiate with the Indian tribe in good faith to 
        enter into such a compact.
          [(B) Any State and any Indian tribe may enter into a 
        Tribal-State compact governing gaming activities on the 
        Indian lands of the Indian tribe, but such compact 
        shall take effect only when notice of approval by the 
        Secretary of such compact has been published by the 
        Secretary in the Federal Register.
          [(C) Any Tribal-State compact negotiated under 
        subparagraph (A) may include provisions relating to--
                  [(i) the application of the criminal and 
                civil laws and regulations of the Indian tribe 
                or the State that are directly related to, and 
                necessary for, the licensing and regulation of 
                such activity;
                  [(ii) the allocation of criminal and civil 
                jurisdiction between the State and the Indian 
                tribe necessary for the enforcement of such 
                laws and regulations;
                  [(iii) the assessment by the State of such 
                activities in such amounts as are necessary to 
                defray the costs of regulating such activity;
                  [(iv) taxation by the Indian tribe of such 
                activity in amounts comparable to amounts 
                assessed by the State for comparable 
                activities,
                  [(v) remedies for breach of contract;
                  [(vi) standards for the operation of such 
                activity and maintenance of the gaming 
                facility, including licensing; and
                  [(vii) any other subjects that are directly 
                related to the operation of gaming activities.
          [(4) Except for any assessments that may be agreed to 
        under paragraph (3)(C)(iii) of this subsection, nothing 
        in this section shall be interpreted as conferring upon 
        a State or any of its political subdivisions authority 
        to impose any tax, fee, charge, or other assessment 
        upon an Indian tribe or upon any other person or entity 
        authorized by an Indian tribe to engage in a class III 
        activity. No State may refuse to enter into the 
        negotiations described in paragraph (3)(A) base upon 
        the lack of authority in such State, or its political 
        subdivisions, to impose such a tax, free, charge, or 
        other assessment.
          [(5) Nothing in this subsection shall impair the 
        right of an Indian tribe to regulate class III gaming 
        on its Indian lands concurrently with the State, except 
        to the extent that such regulations inconsistent with, 
        or less stringent than, the State laws and regulations 
        made applicable by any Tribal-State compact entered 
        into by the Indian tribe under paragraph (3) that is in 
        effect.
          [(6) The provisions of section 1175 of Title 15 shall 
        not apply to any gaming conducted under a Tribal-State 
        compact that--
                  [(A) is entered into under paragraph (8) by a 
                State in which gambling devices are legal, and
                  [(B) is in effect.
          [(7)(A) The United States district courts shall have 
        jurisdiction over--
                  [(i) any cause of action initiated by an 
                Indian tribe arising from the failure of a 
                State to enter into negotiations with the 
                Indian tribe for the purpose of entering into a 
                Tribal-State compact under paragraph (3) or to 
                conduct such negotiations in good faith.
                  [(ii) any cause of action initiated by a 
                State or Indian tribe to enjoin a class III 
                gaming activity located on Indian lands and 
                conducted in violation of any Tribal-State 
                compact entered into under paragraph (3) that 
                is in effect, and
                  [(iii) any cause of action initiated by the 
                Secretary to enforce the procedures prescribed 
                under subparagraph (B)(vii).
          [(B)(i) An Indian tribe may initiate a cause of 
        action described in subparagraph (A)(i) only after the 
        close of the 180-day period beginning on the date on 
        which the Indian tribe requested the State to enter 
        into negotiations under paragraph (3)(A).
          [(ii) In any action described in subparagraph (A)(i), 
        upon the introduction of evidence by an Indian tribe 
        that--
                  [(I) a Tribal-State compact has not been 
                entered into under paragraph (3), and
                  [(II) the State did not respond to the 
                request of the Indian tribe to negotiate such a 
                compact or did not respond to such request in 
                good faith, the burden of proof shall be upon 
                the State to provide that the State has 
                negotiated with the Indian tribe in good faith 
                to conclude a Tribal-State compact governing 
                the conduct of gaming activities.
          [(iii) If, in any action described in subparagraph 
        (A)(i), the court finds that the State has failed to 
        negotiate in good faith with the Indian tribe to 
        conclude a Tribal-State compact governing the conduct 
        of gaming activities, the court shall order the State 
        and the Indian tribe to conclude such a compact within 
        a 60-day period. In determining in such an action 
        whether a State has negotiated in good faith, the 
        court--
                  [(I) may take into account the public 
                interest, public safety, criminality, financial 
                integrity, and adverse economic impacts on 
                existing gaming activities, and
                  [(II) shall consider any demand by the State 
                for direct taxation of the Indian tribe or of 
                any Indian lands as evidence that the State has 
                not negotiated in good faith.
          [(iv) If a State and an Indian tribe fail to conclude 
        a Tribal-State compact governing the conduct of gaming 
        activities on the Indian lands subject to the 
        jurisdiction of such Indian tribe within the 60-day 
        period provided in the order of a court issued under 
        clause (iii), the Indian tribe and the State shall each 
        submit to a mediator appointed by the court a proposed 
        compact that represents their last best offer for a 
        compact. The mediator shall select from the two 
        proposed compacts the one which best comports with the 
        terms in this Act and any other applicable Federal law 
        and with the findings and order of the court.
          [(v) The mediator appointed by the court under clause 
        (iv) shall submit to the State and the Indian tribe the 
        compact selected by the mediator under clause (iv),
          [(vi) If a State consents to a proposed compact 
        during the 60-day period beginning on the date on which 
        the proposed compact is submitted by the mediator to 
        the State under clause (v), the proposed compact shall 
        be treated as a Tribal-State compact entered into under 
        paragraph (3).
          [(vii) If the State does not consent during the 60-
        day period described in clause (vi) to a proposed 
        compact submitted by a mediator under clause (v), the 
        mediator shall notify the Secretary and the Secretary 
        shall prescribe, in consultation with the Indian tribe, 
        procedures--
                  [(I) which are consistent with the proposed 
                compact selected by the mediator under clause 
                (iv), the provisions of this chapter and the 
                relevant provisions of the laws of the State, 
                and
                  [(II) under which class III gaming may be 
                conducted on the Indian lands over which the 
                Indian tribe has jurisdiction.
          [(8)(A) The Secretary is authorized to approve any 
        Tribal-State compact entered into between an Indian 
        tribe and a State governing gaming on Indian lands of 
        such Indian tribe.
          [(B) The Secretary may disapprove a compact described 
        in subparagraph (A) only if such compact violates--
                  [(i) any provision of this chapter,
                  [(ii) any other provision of Federal law that 
                does not relate to jurisdiction over gaming on 
                Indian lands, or
                  [(iii) the trust obligations of the United 
                States to Indians.
          [(C) If the Secretary does not approve or disapprove 
        a compact described in subparagraph (A) before the date 
        that is 45 days after the date on which the compact is 
        submitted to the Secretary for approval, the compact 
        shall be considered to have been approved by the 
        Secretary, but only to the extent the compact is 
        consistent with the provisions of this chapter.
          [(D) The Secretary shall publish in the Federal 
        Register notice of any Tribal-State compact that is 
        approved, or considered to have been approved, under 
        this paragraph.
          [(9) An Indian tribe may enter into a management 
        contract for the operation of a class III gaming 
        activity if such contract has been submitted to, and 
        approved by, the Chairman. The Chairman's review and 
        approval of such contract shall be governed by the 
        provisions of subsections (b), (c), (d), (f), (g), and 
        (h) of section 2711 of this title.
    [(e) Approval of Ordinances.--For purposes of this section, 
by no later than the date that is 90 days after the date on 
which any tribal gaming ordinance or resolution is submitted to 
the Chairman, the Chairman shall approve such ordinance or 
resolution if it meets the requirements of this section. Any 
such ordinance or resolution not acted upon at the end of that 
90-day period shall be considered to have been approved by the 
Chairman, but only to the extent such ordinance or resolution 
is consistent with the provisions of this chapter.

Sec. 2711. [Management Contracts

    [(a) Class II Gaming Activity; Information on Operators.--
          [(1) Subject to the approval of the Chairman, an 
        Indian tribe may enter into a management contract for 
        the operation and management of a class II gaming 
        activity that the Indian tribe may engage in under 
        section 2710(b)(1) of this title, but, before approving 
        such contract, the Chairman shall require and obtain 
        the following information:
                  [(A) the name, address and other additional 
                pertinent background information on each person 
                or entity (including individuals comprising 
                such entity) having a direct financial interest 
                in, or management responsibility for, such 
                contract, and, in the case of a corporation, 
                those individuals who serve on the board of 
                directors of such corporation and each of its 
                stockholders who hold (directly or indirectly) 
                10 percent or more of its issued and 
                outstanding stock;
                  [(B) a description of any previous experience 
                that each person listed pursuant to 
                subparagraph (A) has had with other gaming 
                contracts with Indian tribes or with the gaming 
                industry generally, including specifically the 
                name and address of any licensing or regulatory 
                agency with which such person has had a 
                contract relating to gaming; and
                  [(C) a complete financial statement of each 
                person listed pursuant to subparagraph (A).
          [(2) Any person listed pursuant to paragraph (1)(A) 
        shall be required to respond to such written or oral 
        questions that the Chairman may propound in accordance 
        with his responsibilities under this section.
          [(3) For purposes of this chapter, any references to 
        the management contract described in paragraph (1) 
        shall be considered to include all collateral 
        agreements to such contract that relate to the gaming 
        activity.
    [(b) Approval.--The Chairman may approve any management 
contract entered into pursuant to this section only if he 
determines that it provides at least--
          [(1) for adequate accounting procedures that are 
        maintained, and for verifiable financial reports that 
        are prepared, by or for the tribal governing body on a 
        monthly basis;
          [(2) for access to the daily operations of the gaming 
        to appropriate tribal officials who shall also have a 
        right to verify the daily gross revenues and income 
        made from any such tribal gaming activity;
          [(3) for a minimum guaranteed payment to the Indian 
        tribe that has preference over the retirement of 
        development and construction costs;
          [(4) for an agreed ceiling for the repayment of 
        development and construction costs;
          [(5) for a contract term not to exceed five years, 
        except that, upon the request of an Indian tribe, the 
        Chairman may authorize a contract term that exceeds 
        five years but does not exceed seven years if the 
        Chairman is satisfied that the capital investment 
        required, and the income projections, for the 
        particular gaming activity require the additional time; 
        and
          [(6) for grounds and mechanisms for terminating such 
        contract, but actual contract termination shall not 
        require the approval of the Commission.
    [(c) Fee Based on Percentage of Net Revenues.--
          [(1) The Chairman may approve a management contract 
        providing for a fee based upon a percentage of the net 
        revenues of a tribal gaming activity if the Chairman 
        determines that such percentage fee is reasonable in 
        light of surrounding circumstances. Except as otherwise 
        provided in this subsection, such fee shall not exceed 
        30 percent of the net revenues.
          [(2) Upon the request of an Indian tribe, the 
        Chairman may approve a management contract for a fee 
        based upon a percentage of the net revenues of a tribal 
        gaming activity that exceeds 30 percent but not 40 
        percent of the net revenues if the Chairman is 
        satisfied that the capital investment required, and 
        income projections, for such tribal gaming activity 
        require the additional fee requested by the Indian 
        tribe.
    [(d) Period for Approval; Extension.--By no later than the 
date that is 180 days after the date on which a management 
contract is submitted to the Chairman for approval, the 
Chairman shall approve or disapprove such contract on its 
merits. The Chairman may extend the 180-day period by not more 
than 90 days if the Chairman notifies the Indian tribe in 
writing of the reason for the extension. The Indian tribe may 
bring an action in a United States district court to compel 
action by the Chairman if a contract has not been approved or 
disapproved within the period required by this subsection.
    [(e) Disapproval.--The Chairman shall not approve any 
contract if the Chairman determines that--
          [(1) any person listed pursuant to subsection 
        (a)(1)(A) of this section--
                  [(A) is an elected member of the governing 
                body of the Indian tribe which is the party to 
                the management contract;
                  [(B) has been or subsequently is convicted of 
                any felony or gaming offense;
                  [(C) has knowingly and willfully provided 
                materially important false statements or 
                information to the Commission or the Indian 
                tribe pursuant to this chapter or has refused 
                to respond to questions propounded pursuant to 
                subsection (a)(2) of this section; or
                  [(D) has been determined 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 the business and financial 
                arrangements incidental thereto;
          [(2) the management contractor has, or has attempted 
        to, unduly interfere or influence for its gain or 
        advantage any decision or process of tribal government 
        relating to the gaming activity;
          [(3) the management contractor has deliberately or 
        substantially failed to comply with the terms of the 
        management contract or the tribal gaming ordinance or 
        resolution adopted and approved pursuant to this 
        chapter; or
          [(4) a trustee, exercising the skill and diligence 
        that a trustee is commonly held to; would not approve 
        the contract.
    [(f) Modification or Voiding.--The Chairman, after notice 
and hearing, shall have the authority to require appropriate 
contract modifications or may void any contract if he 
subsequently determines that any of the provisions of this 
section have been violated.
    [(g) Interest in Land.--No management contract for the 
operation and management of a gaming activity regulated by this 
chapter shall 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 said contract.
    [(h) Authority.--The authority of the Secretary under 
section 81 of this title, relating to management contracts 
regulated pursuant to this chapter, is hereby transferred to 
the Commission.
    [(i) Investigation Fee.--The Commission shall require a 
potential contractor to pay a fee to cover the cost of the 
investigation necessary to reach a determination required in 
subsection (e) of this section.

Sec. 2712. [Review of existing ordinances and contracts

    [(a) Notification to Submit.--As soon as practicable after 
the organization of the Commission, the Chairman shall notify 
each Indian tribe or management contractor who, prior to 
October 17, 1988, adopted an ordinance or resolution 
authorizing class II gaming or class III gaming or entered into 
a management contract, that such ordinance, resolution, or 
contract, including all collateral agreements relating to the 
gaming activity, must be submitted for his review within 60 
days of such notification. Any activity conducted under such 
ordinance, resolution, contract, or agreement shall be valid 
under this chapter, or any amendment made by this Act, unless 
disapproved under this section.
    [(b) Approval or Modification of Ordinance or Resolution.--
          [(1) By no later than the date that is 90 days after 
        the date on which an ordinance or resolution 
        authorizing class II gaming or class III gaming is 
        submitted to the Chairman pursuant to subsection (a) of 
        this section, the Chairman shall review such ordinance 
        or resolution to determine if it conforms to the 
        requirements of section 2710(b) of this title.
          [(2) If the Chairman determines that an ordinance or 
        resolution submitted under subsection (a) of this 
        section conforms to the requirements of section 2710(b) 
        of this title, the Chairman shall approve it.
          [(3) If the Chairman determines that an ordinance or 
        resolution submitted under subsection (a) of this 
        section does not conform to the requirements of section 
        2170(b) of this title, the Chairman shall provide 
        written notification of necessary modifications to the 
        Indian tribe which shall have not more than 120 days to 
        bring such ordinance or resolution into compliance.
    [(c) Approval or Modification of Management Contract.--
          [(1) Within 180 days after the submission of a 
        management contract, including all collateral 
        agreements, pursuant to subsection (a) of this section, 
        the Chairman shall subject such contract to the 
        requirements and process of section 2711 of this title.
          [(2) If the Chairman determines that a management 
        contract submitted under subsection (a) of this 
        section, or the management contractor under a contract 
        submitted under subsection (a) of this section, does 
        not meet the requirements of section 2711 of this 
        title, the Chairman shall provide written notification 
        to the parties to such contract of necessary 
        notifications and the parties shall have not more than 
        120 days to come into compliance. If a management 
        contract has been approved by the Secretary prior to 
        October 17, 1988, the parties shall have not more than 
        180 days after notification of necessary modifications 
        to come into compliance.

Sec. 2713. Civil penalties

    [(a) Authority; Amount; Appeal; Written Complaint.--
          [(1) Subject to such regulations as may be prescribed 
        by the Commission, the Chairman shall have authority to 
        levy and collect appropriate civil fines, not to exceed 
        $25,000 per violation, against the tribal operator of 
        an Indian game or a management contractor engaged in 
        gaming for any violation of any provision of this 
        chapter, any regulation prescribed by the Commission 
        pursuant to this chapter, or tribal regulations, 
        ordinances, or resolutions approved under section 2710 
        or 2712 of this title.
          [(2) The Commission shall, by regulation, provide an 
        opportunity for an appeal and hearing before the 
        Commission on fines levied and collected by the 
        Chairman.
          [(3) Whenever the Commission has reason to believe 
        that the tribal operator of an Indian game or a 
        management contractor is engaged in activities 
        regulated by this chapter, by regulations prescribed 
        under this chapter, or by tribal regulations, 
        ordinances, or resolutions, approved under section 2710 
        or 2712 of this title, that may result in the 
        imposition of a fine under subsection (a)(1) of this 
        section, the permanent closure of such game, or the 
        modification, or termination of any management 
        contract, the Commission shall provide such tribal 
        operator or management contractor with a written 
        complaint stating the acts or omissions which form the 
        basis for such belief and the action or choice being 
        considered by the Commission. The allegation shall be 
        set forth in common and concise language and must 
        specify the statutory or regulatory provisions alleged 
        to have been violated, but may not consist merely of 
        allegations stated in statutory or regulatory language.
    [(b) Temporary Closure; Hearing.--
          [(1) The Chairman shall have power to order temporary 
        closure of an Indian game for substantial violation of 
        the provisions of this chapter, of regulations 
        prescribed by the Commission pursuant to this chapter, 
        or of tribal regulations, ordinances, or resolutions 
        approved under section 2710 or 2712 of this title.
          [(2) Not later than thirty days after the issuance by 
        the Chairman of an order of temporary closure, the 
        Indian tribe or management contractor involved shall 
        have a right to a hearing before the Commission to 
        determine whether such order should be made permanent 
        or dissolved. Not later than sixty days following such 
        hearing, the Commission shall, by a vote of not less 
        than two of its members, decide whether to order a 
        permanent closure of the gaming operation.
    [(c) Appeal From Final Decision.--A decision of the 
Commission to give final approval of a fine levied by the 
Chairman or to order a permanent closure pursuant to this 
section shall be appealable to the appropriate Federal district 
court pursuant to chapter 7 of Title 5.
    [(d) Regulatory Authority Under Tribal Law.--Nothing in 
this chapter precludes an Indian tribe from exercising 
regulatory authority provided under tribal law over a gaming 
establishment within the Indian tribe's jurisdiction if such 
regulation is not inconsistent with this chapter or with any 
rules or regulations adopted by the Commission.

Sec. 2714 [Judicial review

    [Decisions made by the Commission pursuant to sections 
2710, 2711, 2712, and 2713 of this title shall be final agency 
decisions for purposes of appeal to the appropriate Federal 
district court pursuant to chapter 7 of Title 5.

Sec. 2715 [Subpoena and deposition authority

    [(a) Attendance, Testimony, Production of Papers, Etc.--By 
a vote of not less than two members, the Commission shall have 
the power to require by subpoena the attendance and testimony 
of witnesses and the production of all books, papers, and 
documents relating to any matter under consideration of 
investigation. Witnesses so summoned shall be paid the same 
fees and mileage that are paid witnesses in the courts of the 
United States.
    [(b) 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. The Commission may request the Secretary to 
request the Attorney General to bring an action to enforce any 
subpoena under this section.
    [(c) Refusal of Subpoena; Court Order; Contempt.--Any court 
of the United States within the jurisdiction of which an 
inquiry is carried on may, in case of contumacy or refusal to 
obey a subpoena for any reason, issue an order requiring such 
person to appear before the Commission (and produce books, 
papers, or documents as so ordered) and give evidence 
concerning the matter in question and any failure to obey such 
order of the court may be punished by such court as a contempt 
thereof.
    [(d) Depositions; Notice.--A Commissioner 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. Such depositions may be taken 
before any person designated by the Commission and having power 
to administer oaths. Reasonable notice must first be given to 
the Commission in writing by the party or his attorney 
proposing to take such deposition, and, in cases in which a 
Commissioner proposes to take a deposition, reasonable notice 
must be given. The notice shall state the name of the witness 
and the time and place of the taking of his deposition. Any 
person may be compelled to appear and depose, and to produce 
books, papers, or documents in the same manner as witnesses may 
be compelled to appear and testify and produce like documentary 
evidence before the Commission, as hereinbefore provided.
    [(e) Oath or Affirmation Required.--Every person deposing 
as herein provided shall be cautioned and shall be required to 
swear (or affirm, if he so requests) to testify to the whole 
truth, and shall be carefully examined. His testimony shall be 
reduced in writing by the person taking the deposition, or 
under his direction, and shall, after it has been reduced to 
writing, be subscribed by the deponent. All depositions shall 
be promptly filed with the Commission.
    [(f) Witness fees.--Witnesses whose depositions are taken 
as authorized in this section, and the persons taking the same, 
shall severally be entitled to the same fees as are paid for 
like services in the courts of the United States.

Sec. 2716 [Investigative powers

    [(a) Confidential Information.--Except as provided in 
subsection (b) of this section, the Commission shall preserve 
any and all information received pursuant to this chapter as 
confidential pursuant to the provisions of paragraphs (4) and 
(7) of section 552(b) of Title 5.
    [(b) Provision to Law Enforcement Officials.--The 
Commission shall, when such information indicates a violation 
of Federal, State, or tribal statutes, ordinances, or 
resolutions, provide such information to the appropriate law 
enforcement officials.
    [(c) Attorney General.--The Attorney General shall 
investigate activities associated with gaming authorized by 
this chapter which may be a violation of Federal law.

Sec. 2717 [Commission Funding

    [(a)(1) The Commission shall establish a schedule of fees 
to be paid to the Commission annually by each class II gaming 
activity that is regulated by this chapter.
    [(2)(A) The rate of the fees imposed under the schedule 
established under paragraph (1) shall be--
          [(i) not less than 0.5 percent nor more than 2.5 
        percent of the first $1,500,000, and
          [(ii) no more than 5 percent of amounts in excess of 
        the first $1,500,000, of the gross revenues from each 
        activity regulated by this chapter.
    [(B) The total amount of all fees imposed during any fiscal 
year under the schedule established under paragraph (1) shall 
not exceed $1,500,000.
    [(3) The Commission, by a vote of not less than two of its 
members, shall annually adopt the rate of the fees authorized 
by this section which shall be payable to the Commission on a 
quarterly basis.
    [(4) Failure to pay the fees imposed under the schedule 
established under paragraph (1) shall, subject to the 
regulations of the Commission, be grounds for revocation of the 
approval of the Chairman of any license, ordinance, or 
resolution required under this chapter for the operation of 
gaming.
    [(5) To the extent that revenue derived from fees imposed 
under the schedule established under paragraph (1) are not 
expended or committed at the close of any fiscal year, such 
surplus funds shall be credited to each gaming activity on a 
pro rata basis against such fees imposed for the succeeding 
year.
    [(6) For purposes of this section, gross revenues shall 
constitute the annual total amount of money wagered, less any 
amounts paid out as prizes or paid for prizes awarded and less 
allowance for amortization of capital expenditure for 
structures.
    [(b)(1) The Commission, in coordination with the Secretary 
and in conjunction with the fiscal year of the United States, 
shall adopt an annual budget for the expenses and operation of 
the Commission.
    [(2) The budget of the Commission may include a request for 
appropriations, as authorized by section 2718 of this title, in 
an amount equal the amount of funds derived from assessments 
authorized by subsection (a) of this section for the fiscal 
year preceding the fiscal year for which the appropriation 
request is made.
    [(3) The request for appropriations pursuant to paragraph 
(2) shall be subject to the approval of the Secretary and shall 
be included as a part of the budget request of the Department 
of the Interior.

Sec. 2717a [Availablity of class II gaming activity fees to carry out 
                    duties of the Commission

    [In fiscal year 1990 and thereafter, fees collected 
pursuant to and as limited by section 2717 of this title shall 
be available to carry out the duties of the Commission, to 
remain available until expended.

Sec. 2718 [Authorization of appropriations

    [(a) Subject to the provisions of section 2717 of this 
title, there are hereby authorized to be appropriated such sums 
as may be necessary for the operation of the Commission.
    [(b) Notwithstanding the provisions of section 2717 of this 
title, there are hereby authorized to be appropriated not to 
exceed $2,000,000 to fund the operation of the Commission for 
each of the fiscal years beginning October 1, 1988 and October 
1, 1989. Notwithstanding the provisions of section 2717 of this 
title, there are authorized to be appropriated such sums as may 
be necessary to fund the operation of the Commission for each 
of the fiscal years beginning October 1, 1991, and October 1, 
1992.]

SEC. 6. ESTABLISHMENT OF THE FEDERAL INDIAN GAMING REGULATORY 
                    COMMISSION.

    (a) Establishment.--There is established as an independent 
agency of the United States, a Commission to be known as the 
Federal Indian Gaming Regulatory Commission. Such Commission 
shall be an independent establishment, as defined in section 
104 of title 5, United States Code.
    (b) Composition of the Commission.--
          (1) In general.--The Commission shall be composed of 
        3 full-time members, who shall be appointed by the 
        President, by and with the advice and consent of the 
        Senate.
          (2) Citizenship of members.--Each member of the 
        Commission shall be a citizen of the United States.
          (3) Requirements for members.--No member of the 
        Commission may--
                  (A) pursue any other business or occupation 
                or hold any other Office;
                  (B) be activity engaged in or, other than 
                through distribution of gaming revenues as a 
                member of an Indian tribe, have any pecuniary 
                interest in gaming activities;
                  (C) other than through distribution of gaming 
                revenues as a member of an Indian tribe, have 
                any pecuniary interest in any business or 
                organization that holds a gaming license under 
                this Act, or that does business with any person 
                or organization licensed under this Act;
                  (D) have been convicted of a felony or gaming 
                offense; or
                  (E) have any pecuniary interest in, or 
                management responsibility for, any gaming-
                related contract or any other contract approved 
                pursuant to this Act.
          [(4) Political affiliation.--Not more than 2 members 
        of the Commission shall be members of the same 
        political party. In making appointments to the 
        Commission, the President shall appoint members of 
        different political parties, to the extent practicable.
          (5) Additional qualifications.--
                  (A) In general.--The Commission shall be 
                composed of the most qualified individuals 
                available. In making appointments to the 
                Commission, the President shall give special 
                reference to the training and experience of 
                individuals in the fields of corporate finance, 
                accounting, auditing, and investigation or law 
                enforcement.
                  (B) Tribal government experience.--Not less 
                than 2 members of the Commission shall be 
                individuals with extensive experience or 
                expertise in tribal government.
          (6) Background investigation.--The Attorney General 
        shall conduct a background investigation concerning any 
        individual under consideration for appointment to the 
        Commission, with particular regard to the financial 
        stability, integrity, responsibility, and reputation 
        for good character, honesty, and integrity of the 
        nominee.
    (c) Chairperson.--The President shall elect a Chairperson 
from among the members appointed to the Commission.
    (d) Vice Chairperson.--The Commission shall select, by 
majority vote, 1 of the members of the Commission to serve as 
Vice Chairperson. The Vice Chairperson shall--
          (1) serve as Chairperson of the Commission in the 
        absence of the Chairperson; and
          (2) exercise such other powers as may be delegated by 
        the Chairperson.
    (e) Terms of Office.--
          (1) In general.--Each Member of the Commission shall 
        hold office for a term of 5 years.
          (2) Initial appointments.--Initial Appointments to 
        the Commission shall be made for the following terms:
                  (A) The Chairperson shall be appointed for a 
                term of 5 years.
                  (B) One member shall be appointed for a term 
                of 4 years.
                  (C) One member shall be appointed for a term 
                of 3 years.
          (3) Limitation.--No member shall serve for more than 
        2 terms of 5 years each.
    (f) Vacancies.--
          (1) In general.--Each individual appointed by the 
        President to serve as Chairperson and each member of 
        the Commission shall, unless removed for cause under 
        paragraph (2), serve in the capacity for which such 
        individual is appointed until the expiration of the 
        term of such individual or until a successor is duly 
        appointed and qualified.
          (2) Removal from office.--The Chairperson or any 
        member of the Commission may only be removed from 
        office before the expiration of the term of the office 
        by the President for neglect of duty, malfeasance in 
        office, or for other good cause shown.
          (3) Term to fill vacancies.--The term of any member 
        appointed to fill a vacancy on the Commission shall be 
        for the unexpired term of the member.
    (g) Quorum.--Two members of the Commission shall constitute 
a quorum.
    (h) Meetings.--
          (1) In general.--The Commission shall meet at the 
        call of the Chairperson or a majority of the members of 
        the Commission.
          (2) Majority of members determine action.--A majority 
        of the members of the Commission shall determine any 
        action of the Commission.
    (i) Compensation.--
          (1) Chairperson.--The Chairperson shall be paid at a 
        rate equal to that of level IV of the Executive 
        Schedule under section 5316 of title 5, United States 
        Code.
          (2) Other members.--Each other member of the 
        Commission shall be paid at a rate equal to that of 
        level V of the Executive Schedule, under section 5316 
        of title 5, United States Code.
          (3) Travel.--All members of the Commission shall be 
        reimbursed in accordance with title 5, United States 
        Code, for travel, subsistence, and other necessary 
        expenses incurred by them in the performance of their 
        duties.
    (j) Administrative Support Services.--The Administrator of 
General Services shall provide to the Commission on a 
reimbursable basis such administrative support services as the 
Commission may request.

SEC. 6. POWERS OF THE CHAIRPERSON.

    (a) Chief Executive Officer.--The Chairperson shall serve 
as the chief executive officer of the Commission.
    (b) Administration of the Commission.--
          (1) In general.--Subject to subsection (c), the 
        Chairperson--
                  (A) shall employ and supervise such personnel 
                as the Chairperson considers necessary to carry 
                out the function of the Commission, and assign 
                work among such personnel;
                  (B) shall appoint a General Counsel to the 
                Commission who shall be paid at the annual rate 
                of basic pay payable for ES-6 of the Senior 
                Executive Service Schedule under section 5382 
                of title 5, United States Code.
                  (C) shall appoint and supervise other staff 
                of the Commission without regard to the 
                provision of title 5, United States Code, 
                governing appointments in the competitive 
                service;
                  (D) may procure temporary and intermittent 
                services under section 3109(b) of title 5, 
                United States Code, but at rates for 
                individuals not to exceed the daily equivalent 
                of the maximum annual rate of basic pay payable 
                for ES-6 of the Senior Executive Services 
                Schedule;
                  (E) may request the head of any Federal 
                agency to detail any personnel of such agency 
                to the Commission to assist the Commission in 
                carrying out the duties of the Commission under 
                this Act, unless otherwise prohibited by law;
                  (F) shall use and expend Federal funds and 
                funds collected pursuant to section 17; and
                  (G) may contract for the services of such 
                other professional, technical, and operational 
                personnel and consultants as may be necessary 
                for the performance of the Commission's 
                responsibilities under this Act.
          (2) Compensation of staff.--The staff referred to in 
        paragraph (1)(C) shall be paid without regard to the 
        provisions of chapter 51 and subchapters III and VIII 
        of chapter 53 of title 5, United States Code, relating 
        to classification and General Schedule and Senior 
        Executive Service Schedule pay rates, except that no 
        individual so appointed may receive pay in excess of 
        the annual rate of basic pay payable for ES-5 of the 
        Senior Executive Service Schedule under section 5382 of 
        title 5, United States Code.
    (c) Applicable Policies.--In carrying out any of the 
functions under this section, the Chairperson shall be governed 
by the general policies of the Commission and by such 
regulatory decisions, findings, and determinations as the 
Commission may by law be authorized to make.

SEC. 7. POWERS AND AUTHORITY OF THE COMMISSION.

    (a) General Powers.--
          (1) In general.--The Commission shall have the power 
        to--
                  (A) approve the annual budget of the 
                Commission;
                  (B) promulgate regulations to carry out this 
                Act;
                  (C) establish a rate of fees and assessments, 
                as provided in section 17;
                  (D) conduct investigations, including 
                background investigations;
                  (E) issue a temporary order closing the 
                operation of gaming activities;
                  (F) after a hearing, make permanent a 
                temporary order closing the operation of gaming 
                activities, as provided in section 15;
                  (G) grant, deny, limit, condition, restrict, 
                revoke, or suspend any license issued under any 
                licensing authority conferred upon the 
                Commission pursuant to this Act or fine any 
                person licensed pursuant to this Act for 
                violation of any of the conditions of licensure 
                under this Act;
                  (H) inspect and examine all premises in which 
                class II or class III gaming is conducted on 
                Indian lands;
                  (I) demand access to and inspect, examine, 
                photocopy, and audit all papers, books, and 
                records of class II and class III gaming 
                activities conducted on Indian lands and any 
                other matters necessary to carry out the duties 
                of the Commission under this Act;
                  (J) use the United States mails in the same 
                manner and under the same conditions as any 
                department or agency of the United States;
                  (K) procure supplies, services, and property 
                by contract in accordance with applicable 
                Federal laws;
                  (L) enter into contracts with Federal, State, 
                tribal, and private entities for activities 
                necessary to the discharge of the duties of the 
                Commission;
                  (M) serve or cause to be served, process or 
                notices of the Commission in a manner provided 
                for by the Commission or in a manner provided 
                for the service of process and notice in civil 
                actions in accordance with the applicable rules 
                of a tribal, State, or Federal court;
                  (N) propound written interrogatories and 
                appoint hearing examiners, to whom may be 
                delegated the power and authority to administer 
                oaths, issue subpoenas, propound written 
                interrogatories, and require testimony under 
                oath;
                  (O) conduct all administrative hearings 
                pertaining to civil violations of this Act 
                (including any civil violation of a regulation 
                promulgated under this Act);
                  (P) collect all fees and assessments 
                authorized by this Act and the regulations 
                promulgated pursuant to this Act;
                  (Q) assess penalties for violation of the 
                provisions of this Act and the regulations 
                promulgated pursuant to this Act;
                  (R) provide training and technical assistance 
                to Indian tribes with respect to all aspects of 
                the conduct and regulation of gaming 
                activities;
                  (S) monitor and, as specifically authorized 
                by this Act, regulate class II and class III 
                gaming;
                  (T) establish precertificaton criteria that 
                apply to management contractors and other 
                persons having material control over a gaming 
                operation;
                  (U) approve all management-related and 
                gaming-related contracts; and
                  (V) in addition to the authorities otherwise 
                specified in this Act, delegate by published 
                order or rule, any of the functions of the 
                Commission (including functions with respect to 
                hearing, determining, ordering, certifying, 
                reporting, or otherwise acting on the part of 
                the Commission concerning any work, business, 
                or matter) to a division of the Commission, an 
                individual member of the Commission, an 
                administrative law judge, or an employee of the 
                Commission.
          (2) Statutory construction.--Nothing in this section 
        may be construed to authorize the delegation of the 
        function of rulemaking, as described in subchapter II 
        of chapter 5 of title 5, United States Code, with 
        respect to general rules (as distinguished from rules 
        of particular applicability), or the promulgation of 
        any other rule.
    (b) Right to Reserve Delegated Functions.--
          (1) In general.--With respect to the delegation of 
        any of the functions of the Commission, the Commission 
        shall retain a discretionary right to review the action 
        of any division of the Commission, individual member of 
        the Commission, administrative law judge, or employee 
        of the Commission, upon the initiative of the 
        Commission.
          (2) Vote needed for review.--The vote of one member 
        of the Commission shall be sufficient to bring an 
        action referred to in paragraph (1) before the 
        Commission for review, and the Commission shall ratify, 
        revise, or reject the action under review not later 
        than the last day of the applicable period specified in 
        regulations promulgated by the Commission.
          (3) Failure to conduct review.--If the Commission 
        declines to exercise the right to such review or fails 
        to exercise such right within the applicable period 
        specified in regulations promulgated by the Commission, 
        the action of any such division of the Commission, 
        individual member of the Commission, administrative law 
        judge, or employee, shall for all purposes, including 
        any appeal or review of such action, be deemed an 
        action of the Commission.
    (c) Minimum Requirements.--Pursuant to the procedures 
described in section 9(d), after receiving recommendation from 
the Advisory Committee, the Commission shall establish minimum 
Federal standards--
          (1) for background investigations, licensing of 
        persons, and licensing of gaming operations associated 
        with the conduct or regulation of class II and class 
        III gaming on Indian lands by tribal governments; and
          (2) for the operation of class II and class III 
        gaming activities on Indian lands, including--
                  (A) surveillance and security personnel and 
                systems capable of monitoring all gaming 
                activities, including the conduct of games, 
                cashiers' cages, change booths, count rooms, 
                movements of cash and chips, entrances and 
                exits to gaming facilities, and other critical 
                areas of any gaming facility;
                  (B) procedures for the protection of the 
                integrity of the rules for the play of games 
                and controls related to such rules;
                  (C) credit and debit collection controls;
                  (D) controls over gambling devices and 
                equipment; and
                  (E) accounting and auditing.
    (d) Commission Access to Information.--
          (1) In general.--The Commission may secure from any 
        department or agency of the United States information 
        necessary to enable the Commission to carry out this 
        Act. Unless otherwise prohibited by law, upon request 
        of the Chairperson, the head of such department or 
        agency shall furnish such information to the 
        Commission.
          (2) Information transfer.--The Commission may secure 
        from any law enforcement agency or gaming regulatory 
        agency of any State, Indian tribe, or foreign nation 
        information necessary to enable the Commission to carry 
        out this Act. Unless otherwise prohibited by law, upon 
        request of the Chairperson, the head of any State or 
        tribal law enforcement agency shall furnish such 
        information to the Commission.
          (3) Privileged information.--Notwithstanding sections 
        552 and 552a of title 5, United States Code, the 
        Commission shall protect from disclosure information 
        provided by Federal, State, tribal, or international 
        law enforcement or gaming regulatory agencies.
          (4) Law enforcement agency.--For purposes of this 
        subsection, the Commission shall be considered to be a 
        law enforcement agency.
    (e) Investigations and Actions.--
          (1) In general.--
                  (A) Possible violations.--The Commission may, 
                at the discretion of the Commission, and as 
                specifically authorized by this Act, conduct 
                such investigations as the Commission considers 
                necessary to determine whether any person has 
                violated, is violating, or is conspiring to 
                violate any provision of this Act (including 
                any rule or regulation promulgated under this 
                Act). The Commission may require or permit any 
                person to file with the Commission a statement 
                in writing, under oath, or otherwise as the 
                Commission may determine, concerning all 
                relevant facts and circumstances, regarding the 
                matter under investigation by the Commission 
                pursuant to this subsection.
                  (B) Administrative investigations.--The 
                Commission is authorized at the discretion of 
                the Commission, and as specifically authorized 
                by this Act, to investigate such facts, 
                conditions, practices, or matters as the 
                Commission considers necessary or proper to aid 
                in--
                          (i) the enforcement of any provision 
                        of this Act; or
                          (ii) prescribing rules and 
                        regulations under this Act; or
                          (iii) securing information to serve 
                        as a basis for recommending further 
                        legislation concerning the matters to 
                        which this Act relates.
          (2) Administrative authorities.--
                  (A) In general.--For the purpose of any 
                investigation or any other proceeding conducted 
                under this Act, any member of the Commission or 
                any officer designated by the Commission is 
                empowered to administer oaths and affirmations, 
                subpoena witnesses, compel their attendance, 
                take evidence, and require the production of 
                any books, papers, correspondence, memoranda, 
                or other records that the Commission considers 
                relevant or material to the inquiry. The 
                attendance of such witnesses and the production 
                of any such records may be required from any 
                place in the United States at any designated 
                place of hearing.
                  (B) Requiring appearances or testimony.--In 
                case of contumacy by, or refusal to obey any 
                subpoena issued to, any person, the Commission 
                may invoke the jurisdiction of any court of the 
                United States within the jurisdiction of which 
                an investigation or proceeding is carried on, 
                or where such person resides or carries on 
                business, in requiring the attendance and 
                testimony of witnesses and the production of 
                books, papers, correspondence, memoranda, and 
                other records.
                  (C) Court orders.--Any court described in 
                subparagraph (B) may issue an order requiring 
                such person to appear before the Commission or 
                member of the Commission or officer designated 
                by the Commission, there to produce records, if 
                so ordered, or to give testimony touching the 
                matter under investigation or in question, and 
                any failure to obey such order of the court may 
                be punished by such court as a contempt of such 
                court.
          (3) Enforcement.--
                  (A) In general.--If the Commission determines 
                that any person is engaged, has engaged, or is 
                conspiring to engage, in any act of practice 
                constituting a violation of any provision of 
                this Act (including any rule or regulation 
                promulgated under this Act), the Commission 
                may--
                          (i) bring an action in the 
                        appropriate district court of the 
                        United States or the United States 
                        District Court for the District of 
                        Columbia to enjoin such act or 
                        practice, and upon a proper showing, 
                        the court shall grant, without bond, a 
                        permanent or temporary injunction or 
                        restraining order; or
                          (ii) transmit such evidence as may be 
                        available concerning such act or 
                        practice as may constitute a violation 
                        of any Federal criminal law to the 
                        Attorney General, who may institute the 
                        necessary criminal or civil 
                        proceedings.
                  (B) Statutory construction.--
                          (i) In general.--The authority of the 
                        Commission to conduct investigations 
                        and take actions under subparagraph (A) 
                        may not be construed to affect in any 
                        way the authority of any other agency 
                        or department of the United States to 
                        carry out statutory responsibilities of 
                        such agency or department.
                          (ii) Effect of transmittal by the 
                        commission.--The transmittal by the 
                        Commission pursuant to subparagraph 
                        (A)(ii) may not be construed to 
                        constitute a condition precedent with 
                        respect to any action taken by any 
                        department or agency referred to in 
                        clause (i).
          (4) Writs, injunctions, and orders.--Upon application 
        of the Commission, each district court of the United 
        States shall have jurisdiction to issue writs or 
        mandamus, injunctions, and orders commanding any person 
        to comply with the provision of this Act (including any 
        rule or regulation promulgated under this Act.)

SEC. 8. REGULATORY FRAMEWORK.

    (a) Class II Gaming.--For class II gaming, Indian tribes 
shall retain the right of such tribes to, in a manner that 
meets or exceeds minimum Federal standards established by the 
Commission pursuant to section 7(c)--
          (1) monitor and regulate such gaming; and
          (2) conduct background investigations and issue 
        licenses to persons who are required to obtain a 
        license under section 10(a).
    (b) Class III Gaming Conducted Under a Compact.--For class 
III gaming conducted under the authority of a compact entered 
into pursuant to section 12, an Indian tribe or a State, or 
both, as provided in a compact or by tribal ordinance or 
resolution, shall, in a manner that meets or exceeds minimum 
Federal standards established by the Commission pursuant to 
section 7(c)--
          (1) monitor and regulate gaming;
          (2) conduct background investigations and issue 
        licenses to persons who are required to obtain a 
        license pursuant to section 10(a); and
          (3) establish and regulate internal control systems.
    (c) Violations of Minimum Federal Standards.--
          (1) Class ii gaming.--In any case in which an Indian 
        tribe that regulates or conducts class II gaming on 
        Indian lands substantially fails to meet or enforce 
        minimum Federal standards for that gaming, after 
        providing the Indian tribe notice and reasonable 
        opportunity to cure violations and to be heard, and 
        after the exhaustion of other authorized remedies and 
        sanctions, the Commission shall have the authority to 
        conduct background investigations, issue licenses, and 
        establish and regulate internal control systems 
        relating to class II gaming conducted by the Indian 
        tribe. Such authority of the Commission may be 
        exclusive until such time as the regulatory and 
        internal control systems of the Indian tribe meet or 
        exceed the minimum Federal standards concerning 
        regulatory, licensing, or internal control requirements 
        established by the Commission for such gaming.
          (2) Class iii gaming.--In any case in which an Indian 
        tribe or a State (or both) that regulates class III 
        gaming on Indian lands fails to meet or enforce minimum 
        Federal standards for class III gaming, after providing 
        notice and reasonable opportunity to cure violations 
        and be heard, and after the exhaustion of other 
        authorized remedies and sanctions, the Commission shall 
        have the authority to conduct background 
        investigations, issue licenses, and establish and 
        regulate internal control systems relating to class III 
        gaming conducted by the Indian tribe. Such authority of 
        the Commission may be exclusive until such time as the 
        regulatory or internal control systems of the Indian 
        tribe or the State (or both) meet or exceed the minimum 
        Federal regulatory, licensing, or internal control 
        requirements established by the Commission for such 
        gaming.

SEC. 9. ADVISORY COMMITTEE ON MINIMUM REGULATORY REQUIREMENTS AND 
                    LICENSING STANDARDS.

    (a) Establishment.--The President shall establish an 
advisory committee to be known as the ``Advisory Committee on 
Minimum Regulatory Requirements and Licensing Standards''.
    (b) Members.--
          (1) In general.--The Advisory Committee shall be 
        composed of 8 members who shall be appointed by the 
        President not later than 120 days after the date of 
        enactment of the Indian Gaming Regulatory Act 
        Amendments Act of 1995, of which--
                  (A) 3 members, selected from a list of 
                recommendations submitted to the President by 
                the Chairperson and Vice Chairperson of the 
                Committee on Indian Affairs of the Senate and 
                the Chairperson and ranking minority member of 
                the Subcommittee on Native American Affairs of 
                the Committee on Resources of the House of 
                Representatives, shall be members of, and 
                represent, Indian tribal governments involved 
                in gaming covered under this Act;
                  (B) 3 members, selected from a list of 
                recommendations submitted to the President by 
                the Majority Leader and the Minority Leader of 
                the Senate and the Speaker and the Minority 
                Leader of the House of Representatives, shall 
                represent State governments involved in gaming 
                covered under this Act, and shall have 
                experience as State gaming regulators; and
                  (C) 2 members shall each be an employee of 
                the Department of Justice.
          (2) Vacancies.--Any vacancy on the Advisory Committee 
        shall not affect its powers, but shall be filled in the 
        same manner as the original appointment.
    (c) Recommendations for Minimum Federal Standards.--
          (1) In general.--Not later than 180 days after the 
        date on which all initial members of the Advisory 
        Committee have been appointed under subsection (b), the 
        Advisory Committee shall develop and submit to the 
        entities referred to in paragraph (2) recommendations 
        for minimum Federal standards relating to background 
        investigations, internal control systems, and licensing 
        standards (as described in section 7(c)).
          (2) Recipients of recommendations.--The Advisory 
        Committee shall submit the recommendations described in 
        paragraph (1) to the Committee on Indian Affairs of the 
        Senate, the Subcommittee on Native American and Insular 
        Affairs of the Committee on Resources of the House of 
        Representatives, the Commission, and to each Federally-
        recognized Indian tribe.
          (3) Factors for consideration.--While the minimum 
        Federal standards recommended or established pursuant 
        to this section may be developed with due regard for 
        existing industry standards, the Advisory Committee, 
        and the Commission in promulgating standards pursuant 
        in subsection (d), shall also consider--
                  (A) the unique nature of tribal gaming as 
                compared to non-Indian commercial, 
                governmental, and charitable gaming;
                  (B) the broad variations in the scope and 
                size of tribal gaming activity;
                  (C) the inherent sovereign right of Indian 
                tribes to regulate their own affairs; and
                  (D) the findings and purposes set forth in 
                sections 2 and 3.
    (d) Regulations.--Upon receipt of the recommendations of 
the Advisory Committee, the Commission shall hold public 
hearings on the recommendations. After the conclusion of the 
hearings, the Commission shall promulgate regulations 
establishing minimum Federal regulatory requirements and 
licensing standards.
    (e) Travel.--Each member of the Advisory Committee who is 
appointed under subparagraph (A) or (B) of subsection (b)(1) 
and who is not an officer or employee of the Federal government 
or a government of a State shall be reimbursed for travel and 
per diem in lieu of subsistence expenses during the performance 
of duties of the Advisory Committee while away from the home or 
the regular place of business of that member, in accordance 
with subchapter I of chapter 57 of title 5, United States Code.
    (f) Termination.--The Advisory Committee shall cease to 
exist on the date that is 10 days after the date on which the 
Advisory Committee submits the recommendations under subsection 
(c).
    (g) Exemption From Federal Advisory Committee Act.--All 
activities of the Advisory Committee shall be exempt from the 
Federal Advisory Committee Act (5 U.S.C. App.).

SEC 10. LICENSING.

    (a) In General.--A license issued under this act shall be 
required of--
          (1) a gaming operation;
          (2) a key employee of a gaming operation;
          (3) a management of gaming-related contractor;
          (4) a gaming service industry; or
          (5) a person who has material control, either 
        directly or indirectly, over a licensed gaming 
        operation.
    (b) Certain Licenses For Management Contractor and Gaming 
Operations.--Notwithstanding any other provision of law 
relating to licenses issued by an Indian tribe or a State (or 
both) pursuant to this Act, the Commission may require licenses 
of--
          (1) management contractors; and
          (2) gaming operations.
    (c) Gaming Operation License.--
          (1) In General.--No gaming operation shall operate 
        unless all required licenses and approval for the 
        gaming operation have been obtained in accordance with 
        this Act.
          (2) Written agreements.--
                  (A) Filing.--Prior to the operation of any 
                gaming facility or activity, each management 
                contract for the gaming operations shall be in 
                writing and filed with the Commission pursuant 
                to section 13.
                  (B) Express approval required.--No management 
                contract referred to in subparagraph (A) shall 
                be effective unless the Commission expressly 
                approves the management contract.
                  (C) Requirement of additional provisions.--
                The Commission may require that a management 
                contract referred to in subparagraph (A) 
                include any provisions that are reasonably 
                necessary to meet the requirements of this Act.
                  (D) Inelgibility or exemption.--The 
                Commission may, with respect to an applicant 
                who does not have the ability to exercise any 
                significant control over a licensed gaming 
                operation--
                          (i) determine that applicant to be 
                        ineligible to hold a license, or
                          (ii) exempt that applicant from being 
                        required to hold a license.
    (d) Denial of License.--The Commission, in the exercise of 
specific licensure power conferred upon the Commission by this 
Act, shall deny a license to any applicant who is disqualified 
on the basis of a failure to meet any of the minimum Federal 
standards promulgated by the Commission pursuant to section 
7(c).
    (e) Application for License.--
          (1) In general.--Upon the filing of the materials 
        specified in paragraph (2), the Commission shall 
        conduct an investigation into the qualifications of an 
        applicant. The Commission may conduct a non-public 
        hearing on such investigation concerning the 
        qualifications of the applicant in accordance with 
        regulations promulgated by the Commission.
          (2) Filing of materials.--The Commission shall carry 
        out paragraph (1) upon the filing of--
                  (A) an application for a license that the 
                Commission is specifically authorized to issue 
                pursuant to this Act; and
                  (B) such supplemental information as the 
                Commission may require.
          (3) Timing of hearings and investigations and final 
        action.--
                  (A) Deadline for hearings and 
                investigations.--Not later than 90 days after 
                receiving the materials described in paragraph 
                (2), the Commission shall complete the 
                investigations described in paragraph (1) and 
                any hearings associated with the investigation 
                conducted pursuant to that paragraph.
                  (B) Deadline for final action.--Not later 
                than 10 days after the date specified in 
                subparagraph (A), the Commission shall take 
                final action to grant or deny a license to the 
                applicant.
          (4) Denials.--
                  (A) In general.--The Commission may 
                disapprove an application submitted to the 
                Commission under this section and deny a 
                license to the applicant.
                  (B) Order of denial.--If the Commission 
                denies a license to an applicant under 
                subparagraph (A), the Commission shall prepare 
                an order denying such license. In addition, if 
                an applicant requests a statement of the 
                reasons for the denial, the Commission shall 
                prepare such statement and provide the 
                statement to the applicant. The statement shall 
                include specific findings of fact.
          (5) Issuance of licenses.--If the Commission is 
        satisfied that an applicant is qualified to receive a 
        license, the Commission shall issue a license to the 
        applicant upon tender of--
                  (A) all license fees and assessments as 
                required by this Act (including any rule or 
                regulation promulgated under this Act); and
                  (B) such bonds as the Commission may require 
                for the faithful performance of all 
                requirements imposed by this Act (including any 
                rule or regulation promulgated under this Act).
          (6) Bonds.--
                  (A) Amounts.--The Commission shall, by rules 
                of uniform application, fix the amount of each 
                bond that the Commission requires under this 
                section in such amount as the Commission 
                considers appropriate.
                  (B) Use of bonds.--The Bonds furnished to the 
                Commission under this paragraph may be applied 
                by the Commission to the payment of any unpaid 
                liability of the license under this Act.
                  (C) Terms.--Each bond required in accordance 
                with this section shall be furnished--
                          (i) in cash or negotiable securities;
                          (ii) by a surety bond guaranteed by a 
                        satisfactory guarantor; or
                          (iii) by an irrevocable letter of 
                        credit issued by a banking institution 
                        acceptable to the Commission.
                  (D) Treatment of principal and income.--If a 
                bond is furnished in cash or negotiable 
                securities, the principal shall be placed 
                without restriction of the disposal of the 
                Commission, but any income shall inure to the 
                benefit of the licensee.
    (f) Renewal of License.--
          (1) In general.--
                  (A) Renewals.--Subject to the power of the 
                Commission to deny, revoke, or suspend 
                licenses, any license issued under this section 
                and in force shall be renewed by the Commission 
                for the next succeeding license period upon 
                proper application for renewal and payment of 
                license fees and assessments, as required by 
                applicable law (including any rule or 
                regulation promulgated under this Act).
                  (B) Renewal term.--Subject to subparagraph 
                (C), the term of a renewal period for a license 
                issued under this section shall be for a period 
                of not more than--
                          (i) 2 years, for each of the first 2 
                        renewal periods succeeding the initial 
                        issuance of a license pursuant to 
                        subsection (e); and
                          (ii) 3 years, for each succeeding 
                        renewal period.
                  (C) Reopening hearings.--The Commission may 
                reopen licensing hearings at any time after the 
                Commission has issued or renewed a license.
          (2) Transition.--
                  (A) In general.--Notwithstanding any other 
                provision of this subsection, the Commission 
                shall, for the purpose of facilitating the 
                administration of this Act, renew a license for 
                an activity covered under this subsection (a) 
                that is held by a person on the date of 
                enactment of the Indian Gaming Regulatory Act 
                Amendments Act of 1995 for a renewal period of 
                18 months.
                  (B) Action before expiration.--The Commission 
                shall act upon a timely filed license renewal 
                application prior to the date of expiration of 
                the then current license.
          (3) Filing Requirement.--Each application for renewal 
        shall be filed with the Commission not later than 90 
        days prior to the expiration of the then current 
        license, and shall be accompanied by full payment of 
        all license fees and assessments that are required by 
        law to be paid to the Commission.
          (4) Renewal certificate.--Upon renewal of a license, 
        the Commission shall issue an appropriate renewal 
        certificate, validating device, or sticker, which shall 
        be attached to the license.
    (g) Hearings.--
          (1) In general.--The Commission shall establish 
        procedures for the conduct of hearings associated with 
        licensing, including procedures for issuing, denying, 
        limiting, conditioning, restricting, revoking, or 
        suspending any such license.
          (2) Action by commission.--Following a hearing 
        conducted for any of the purposes authorized in this 
        section, the Commission shall--
                  (A) render a decision of the Commission;
                  (B) issue an order; and
                  (C) serve such decision and order upon the 
                affected parties.
          (3) Rehearing.--
                  (A) In general.--The Commission may, upon a 
                motion made not later than 10 days after the 
                service of a decision and order, order a 
                rehearing before the Commission on such terms 
                and conditions as the Commission considers just 
                and proper if the Commission finds cause to 
                believe that the decision and order should be 
                reconsidered in view of the legal, policy, or 
                factual matters that are--
                          (i) advanced by the party that makes 
                        the motion; or
                          (ii) raised by the Commission on a 
                        motion made by the Commission.
                  (B) Action after rehearing.--Following a 
                rehearing conducted by the Commission, the 
                Commission shall--
                          (i) render a decision of the 
                        Commission;
                          (ii) issue an order; and
                          (iii) serve such decision and order 
                        upon the affected parties.
                  (C) Final agency action.--A decision and 
                order made by the Commission under paragraph 
                (2) (if no motion for a rehearing is made by 
                the date specified in subparagraph (A)), or a 
                decision and order made by the Commission upon 
                rehearing shall constitute final agency action 
                for purposes of judicial review.
          (4) Jurisdiction.--The United States Court of Appeals 
        for the District of Columbia Circuit shall have 
        jurisdiction to review the licensing decisions and 
        orders of the Commission.
    (h) License Registry.--The Commission shall--
          (1) maintain a registry of all licenses that are 
        granted or denied pursuant to this Act; and
          (2) make the information contained in the registry 
        available to Indian tribes to assist the licensure and 
        regulatory activities of Indian tribes.

SEC. 11. REQUIREMENTS FOR THE CONDUCT OF CLASS I AND CLASS II GAMING ON 
                    INDIAN LANDS.

    (a) Class I Gaming.--Class I gaming on Indian lands shall 
be within the exclusive jurisdiction of the Indian tribes and 
shall not be subject to the provisions of this Act.
    (b) Class II Gaming.--
          (1) In general.--Any class II gaming on Indian lands 
        shall be within the jurisdiction of the Indian tribes, 
        but shall be subject to the provisions of this Act.
          (2) Legal activities.--An Indian tribe may engage in, 
        and license and regulate, class II gaming on Indian 
        lands within the jurisdiction of such tribe, if--
                  (A) such Indian gaming is located within a 
                State that permits such gaming for any purpose 
                by any person; and
                  (B) the class II gaming operation meets or 
                exceeds the requirements of sections 7(c) and 
                10.
          (3) Requirements for class ii gaming operations.--
                  (A) In general.--The Commission shall ensure 
                that, with regard to any class II gaming 
                operation on Indian lands--
                          (i) a separate license is issued by 
                        the Indian tribe for each place, 
                        facility, or location on Indian lands 
                        at which class II gaming is conducted;
                          (ii) the Indian tribe has or will 
                        have the sole proprietary interest and 
                        responsibility for the conduct of any 
                        class II gaming activity, unless the 
                        conditions of clause (ix) apply;
                          (iii) the net revenues from any class 
                        II gaming activity are used only--
                                  (I) to fund tribal government 
                                operations or programs;
                                  (II) to provide for the 
                                general welfare of the Indian 
                                tribe and the members of the 
                                Indian tribe;
                                  (III) to promote tribal 
                                economic development;
                                  (IV) to donate to charitable 
                                organizations;
                                  (V) to help fund operations 
                                of local government agencies;
                                  (VI) to comply with the 
                                provisions of section 17; and
                                  (VII) to make per capita 
                                payments to members of the 
                                Indian tribe pursuant to clause 
                                (viii);
                          (iv) the Indian tribe provides to the 
                        Commission annual outside audit reports 
                        of the class II gaming operation of the 
                        Indian tribe, which may be encompassed 
                        within existing independent tribal 
                        audit systems;
                          (v) each contract for supplies, 
                        services, or concessions for a contract 
                        amount equal to more than $50,000 per 
                        year, other than a contract for 
                        professional legal or accounting 
                        services, relating to such gaming is 
                        subject to such independent audit 
                        reports and any audit conducted by the 
                        Commission;
                          (vi) the construction and maintenance 
                        of a class II gaming facility and the 
                        operation of class II gaming are 
                        conducted in a manner that adequately 
                        protects the environment and public 
                        health and safety;
                          (vii) there is instituted an adequate 
                        system that--
                                  (I) ensures that--
                                          (aa) background 
                                        investigations are 
                                        conducted on primary 
                                        management officials, 
                                        key employees, and 
                                        persons having material 
                                        control, either 
                                        directly or indirectly, 
                                        in a licensed class II 
                                        gaming operation, and 
                                        gaming-related 
                                        contractors associated 
                                        with a licensed class 
                                        II gaming operation; 
                                        and
                                          (bb) oversight of 
                                        such officials and the 
                                        management by such 
                                        officials is conducted 
                                        on an ongoing basis; 
                                        and
                                  (II) includes--
                                          (aa) tribal licenses 
                                        for persons involved in 
                                        class II gaming 
                                        operations, issued in 
                                        accordance with 
                                        sections 7(c) and 10;
                                          (bb) a standard 
                                        whereby any 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 of 
                                        gaming, or create or 
                                        enhance the dangers of 
                                        unsuitable, unfair, or 
                                        illegal practices and 
                                        methods and activities 
                                        in the conduct of 
                                        gaming shall not be 
                                        eligible for employment 
                                        or licensure; and
                                          (cc) notification by 
                                        the Indian tribe to the 
                                        Commission of the 
                                        results of such 
                                        background 
                                        investigation before 
                                        the issuance of any 
                                        such license;
                          (viii) net revenues from any class II 
                        gaming activities conducted or licensed 
                        by any Indian tribal government are 
                        used to make per capita payments to 
                        members of the Indian tribe only if--
                                  (I) the Indian tribe has 
                                prepared a plan to allocate 
                                revenues to uses authorized by 
                                clause (iii);
                                  (II) the Secretary determines 
                                that the plan is adequate, 
                                particularly with respect to 
                                uses described in subclause (I) 
                                or (III) of clause (iii);
                                  (III) the interests of minors 
                                and other legally incompetent 
                                persons who are entitled to 
                                received any of the per capita 
                                payments are protected and 
                                preserved;
                                  (IV) the per capita payments 
                                to minors and other legally 
                                incompetent persons are 
                                disbursed to the parents or 
                                legal guardians of such minors 
                                or legally incompetent persons 
                                in such amounts as may be 
                                necessary for the health, 
                                education, or welfare of each 
                                such minor or legally 
                                incompetent person under a plan 
                                approved by the Secretary and 
                                the governing body of the 
                                Indian tribe; and
                                  (V) the per capita payments 
                                are subject to Federal income 
                                taxation and Indian tribes 
                                withhold such taxes when such 
                                payments are made;
                          (ix) a separate license is issued by 
                        the Indian tribe for any class II 
                        gaming operation owned by any person or 
                        entity other than the Indian tribe and 
                        conducted on Indian lands, that 
                        includes--
                                  (I) requirements set forth in 
                                clauses (v) through (vii) 
                                (other than the requirements of 
                                clause (vii)(II)(cc)), and (x); 
                                and
                                  (II) requirements that are at 
                                least as restrictive as those 
                                established by State law 
                                governing similar gaming within 
                                the jurisdiction of the State 
                                within which such Indian lands 
                                are located; and
                          (x) no person or entity, other than 
                        the Indian tribe, is eligible to 
                        receive a tribal license for a class II 
                        gaming operation conducted on Indian 
                        lands within the jurisdiction of the 
                        Indian tribe if such person or entity 
                        would not be eligible to receive a 
                        State license to conduct the same 
                        activity within the jurisdiction of the 
                        State.
                  (B) Transition.--
                          (i) In general.--Clause (ii), (iii), 
                        and (ix) of subparagraph (A) shall not 
                        bar the continued operation of a class 
                        II gaming operation described in clause 
                        (ix) of that subparagraph that was 
                        operating on September 1, 1986, if--
                                  (I) such gaming operation is 
                                licensed and regulated by an 
                                Indian tribe;
                                  (II) income to the Indian 
                                tribe from such gaming is used 
                                only for the purposes described 
                                in subparagraph (A)(iii);
                                  (III) not less than 60 
                                percent of the net revenues 
                                from such gaming operation is 
                                income to the licensing Indian 
                                tribe; and
                                  (IV) the owner of such gaming 
                                operation pays on appropriate 
                                assessment to the Commission 
                                pursuant to section 17 for the 
                                regulation of such gaming.
                          (ii) Limitations on exemption.--The 
                        exemption from application provided 
                        under clause (I) may not be transferred 
                        to any person or entity and shall 
                        remain in effect only during such 
                        period as the gaming operation remains 
                        within the same nature and scope as 
                        such gaming operation was actually 
                        operated on October 17, 1988.
                  (C) List.--The Commission shall--
                          (i) maintain a list of each gaming 
                        operation that is subject to 
                        subparagraph (B); and
                          (ii) publish such list in the Federal 
                        Register.
      (c) Petition for Certificate of Self-Regulation.--
          (1) In general.--Any Indian tribe that operates, 
        directly or with a management contract, a class II 
        gaming activity may petition the Commission for a 
        certificate of self-regulation if that Indian tribe--
                  (A) has continuously conducted such activity 
                for a period of not less than 3 years, 
                including a period of not less than 1 year that 
                begins after the date of the enactment of the 
                Indian Gaming Regulatory Act Amendments Act of 
                1995; and
                  (B) has otherwise complied with the 
                provisions of this Act.
          (2) Issuance of certificate of self-regulation.--The 
        Commission shall issue a certificate of self-regulation 
        under this subsection if the Commission determines, on 
        the basis of available information and after a hearing 
        if requested by the tribe, that the Indian tribe has--
                  (A) conducted its gaming activity in a manner 
                which has--
                          (i) resulted in an effective and 
                        honest accounting of all revenues;
                          (ii) resulted in a reputation for 
                        safe, fair, and honest operation of the 
                        activity; and
                          (iii) been generally free of evidence 
                        of criminal or dishonest activity;
                  (B) adopted and implemented adequate systems 
                for--
                          (i) accounting for all revenues from 
                        the gaming activity;
                          (ii) investigation, licensing, and 
                        monitoring of all employees of the 
                        gaming activity; and
                          (iii) investigation, enforcement, and 
                        prosecution of violations of its gaming 
                        ordinance and regulations;
                  (C) conducted the operation on a fiscally and 
                economically sound basis; and
                  (D) paid all fees and assessments that the 
                tribe is required to pay to the Commission 
                under this Act.
          (3) Effect of certificate of self-regulation.--During 
        the period in which a certificate of self-regulation 
        issued under this subsection is in effect with respect 
        to a gaming activity conducted by an Indian tribe--
                  (A) the tribe shall--
                          (i) submit an annual independent 
                        audit report as required by subsection 
                        (b)(3)(A)(iv); and
                          (ii) submit to the Commission a 
                        complete resume of each employee hired 
                        and licensed by the tribe subsequent to 
                        the issuance of a certificate of self-
                        regulation; and
                  (B) the Commission may not assess a fee under 
                section 17 on gaming operated by the tribe 
                pursuant to paragraph (1) in excess of \1/4\ of 
                1 percent of the net revenues from such 
                activity.
          (4) Rescission.--The Commission may, for just cause 
        and after a reasonable opportunity for a hearing, 
        rescind a certificate of self-regulation issued under 
        this subsection by majority vote of the members of the 
        Commission.
    (d) License Revocation.--If, after the issuance of any 
license by an Indian tribe under this section, the Indian tribe 
receives reliable information from the Commission indicating 
that license does not meet any standard established under 
section 7(c) or 10, or any other applicable regulation 
promulgated under this Act, the Indian tribe--
          (1) shall immediately suspend such license; and
          (2) after providing notice, holding a hearing, and 
        making findings of fact under procedures established 
        pursuant to applicable tribal law, may revoke such 
        license.

SEC. 12. CLASS III GAMING ON INDIAN LANDS.

    (a) Requirements for the Conduct of Class III Gaming on 
Indian Lands.--
          (1) In general.--Class III gaming activities shall be 
        lawful on Indian lands only if such activities are--
                  (A) authorized by--
                          (i) a compact that--
                                  (I) is approved pursuant to 
                                tribal law by the governing 
                                body of the Indian tribe having 
                                jurisdiction over such lands;
                                  (II) meets the requirements 
                                of section 11(b)(3) for the 
                                conduct of class II gaming; and
                                  (III) is approved by the 
                                Secretary under paragraph (4); 
                                or
                          (ii) the Secretary under procedures 
                        prescribed by the Secretary under 
                        paragraph (3)(B)(vii);
                  (B) located in a State that permits such 
                gaming for any purpose by any person; and
                  (C) conducted in conformance with--
                          (i) a compact that--
                                  (I) is in effect; and
                                  (II) is entered into by an 
                                Indian tribe and a State and 
                                approved by the Secretary under 
                                paragraph (4); and
                          (ii) procedures prescribed by the 
                        Secretary under paragraph (3)(B)(vii).
          (2) Compact negotiations.--
                  (A) In general.--Any Indian tribe having 
                jurisdiction over the Indian lands upon which a 
                class III gaming activity is being conducted, 
                or is to be conducted, shall request the State 
                in which such lands are located to enter into 
                negotiations for the purpose of entering into a 
                compact governing the conduct of gaming 
                activities. Upon receiving such a request, the 
                State shall negotiate with the Indian tribe in 
                good faith to enter into such a compact.
                  (B) Approval by the secretary.--Any State and 
                any Indian tribe may enter into a compact 
                governing class III gaming activities on the 
                Indian lands of the Indian tribe, but such 
                compact shall take effect only when notice of 
                approval by the Secretary of such compact has 
                been published by the Secretary in the Federal 
                Register.
          (3) Actions.--
                  (A) In general.--the United States district 
                courts shall have jurisdiction over--
                          (i) any cause of action initiated by 
                        an Indian tribe arising from the 
                        failure of a State to enter into 
                        negotiations with the Indian tribe for 
                        the purpose of entering into a compact 
                        under paragraph (2) or to conduct such 
                        negotiations in good faith;
                          (ii) any cause of action initiated by 
                        a State or Indian tribe to enjoin a 
                        class III gaming activity located on 
                        Indian lands and conducted in violation 
                        of any compact entered into under 
                        paragraph (2) that is in effect; and
                          (iii) any cause of action initiated 
                        by the Secretary to enforce the 
                        procedures prescribed under 
                        subparagraph (B)(vii).
                  (B) Procedures.--
                          (i) In general.--An Indian tribe may 
                        initiate a cause of action described in 
                        subparagraph (A)(i) only after the 
                        expiration of the 180-day period 
                        beginning on the date on which the 
                        Indian tribe requests the State to 
                        enter into negotiations under paragraph 
                        (2)(A).
                          (ii) Burden of proof.--In any action 
                        described in subparagraph (A)(i), upon 
                        introduction of evidence by an Indian 
                        tribe that--
                                  (I) a compact has not been 
                                entered into under paragraph 
                                (2); and
                                  (II) the State did not 
                                respond to the request of the 
                                Indian tribe to negotiate such 
                                a compact or did not respond to 
                                such request in good faith, the 
                                burden of proof shall be upon 
                                the State to prove that the 
                                State has negotiated with the 
                                Indian tribe in good faith to 
                                conclude a compact governing 
                                the conduct of gaming 
                                activities.
                          (iii) Failure to negotiate.--If, in 
                        any action described in subparagraph 
                        (A)(i), the court finds that the state 
                        has failed to negotiate in good faith 
                        with the Indian tribe to conclude a 
                        compact governing the conduct of gaming 
                        activities, the court shall order the 
                        State and the Indian tribe to conclude 
                        such a compact with a 60-day period. In 
                        determining in such an action whether a 
                        State has negotiated in good faith, the 
                        court--
                                  (I) may take into account the 
                                public interest, public safety, 
                                criminality, financial 
                                integrity, and adverse economic 
                                impacts on existing gaming 
                                activities; and
                                  (II) shall consider any 
                                demand by the State for direct 
                                taxation of the Indian tribe or 
                                of any Indian lands as evidence 
                                that the State has not 
                                negotiated in good faith.
                          (iv) Procedure in the event of 
                        failure to conclude a compact.--If a 
                        State and an Indian tribe fail to 
                        conclude a compact governing the 
                        conduct of gaming activities on the 
                        Indian lands subject to the 
                        jurisdiction of such Indian tribe 
                        within the 60-day period provided in 
                        the order of a court issued under 
                        clause (iii), the Indian tribe and the 
                        State shall each submit to a mediator 
                        appointed by the court a proposed 
                        compact that represents their last best 
                        offer for a compact. The mediator shall 
                        select from the 2 proposed compacts the 
                        1 which best comports with the terms of 
                        this Act and any other applicable 
                        Federal law and with the findings and 
                        order of the court.
                           (v) Submission of compact to state 
                        and Indian tribe.--The mediator 
                        appointed under clause (iv) shall 
                        submit to the State and Indian tribe 
                        the proposed compact selected by the 
                        mediator under clause (iv).
                          (vi) Consent of state.--If a State 
                        consents to a proposed compact 
                        submitted to the State under clause (v) 
                        during the 60-day period beginning on 
                        the date on which the proposed compact 
                        is submitted to the State under clause 
                        (v), the proposed compact shall be 
                        treated as a compact entered into under 
                        paragraph (2).
                          (vii) Failure of state to consent.--
                        If the State does not consent during 
                        the 60-day period described in clause 
                        (vi) to a proposed compact submitted by 
                        a mediator under clause (v), the 
                        mediator shall notify the Secretary and 
                        the Secretary shall prescribe, in 
                        consultation with the Indian tribe, 
                        procedures--
                                  (I) that are consistent with 
                                the proposed compact selected 
                                by the mediator under clause 
                                (iv), the provisions of this 
                                Act, and the relevant 
                                provisions of the laws of the 
                                State; and
                                  (II) under which class III 
                                gaming may be conducted on the 
                                Indian lands over which the 
                                Indian tribe has jurisdiction.
          (4) Approval by secretary.--
                  (A) In general.--The Secretary is authorized 
                to approve any compact entered into between an 
                Indian tribe and a State governing gaming on 
                Indian lands of such Indian tribe.
                  (B) Disapproval by secretary.--The Secretary 
                may disapprove a compact described in 
                subparagraph (A) only if such compact 
                violates--
                          (i) any provision of this Act;
                          (ii) any other provisions of Federal 
                        law that does not relate to 
                        jurisdiction over gaming on Indian 
                        lands; or
                          (iii) the trust obligation of the 
                        United States to Indians.
                  (C) Failure of the secretary to take final 
                action.--If the Secretary does not approve or 
                disapprove a compact described in subparagraph 
                (A) before the expiration of the 45-day period 
                beginning on the date on which the compact is 
                submitted to the Secretary for approval, the 
                compact shall be considered to have been 
                approved by the Secretary, but only to the 
                extent the compact is consistent with the 
                provisions of this Act.
                  (D) Publication of notice.--The Secretary 
                shall publish in the Federal Register notice of 
                any compact that is approved, or considered to 
                have been approved, under this paragraph.
                  (E) Effect of publication of compact.--Except 
                for an appeal conducted under subchapter II of 
                chapter 5 of title 5, United States Code, by an 
                Indian tribe or by a State associated with the 
                publication of the compact, the publication of 
                a compact pursuant to subparagraph (D) or 
                subsection (c)(4) that permits a form of class 
                III gaming shall, for purposes of this Act, be 
                conclusive evidence that such class III gaming 
                is an activity subject to negotiations under 
                the laws of the State where the gaming is to be 
                conducted, in any matter under consideration by 
                the Commission or a Federal court.
                  (F) Effective date of compact.--A compact 
                shall become effective upon the publication of 
                the compact in the Federal Register by the 
                Secretary.
                  (G) Duties of commission.--Consistent with 
                the provisions of sections 7(c), 8, and 10, the 
                Commission shall monitor and, if specifically 
                authorized, regulate and license class III 
                gaming with respect to any compact that is 
                published in the Federal Register.
          (5) Provisions of compacts.--
                  (A) In general.--A compact negotiated under 
                this subsection may include provisions relating 
                to--
                          (i) the application of the criminal 
                        and civil laws (including any rule or 
                        regulation) of the Indian tribe or the 
                        State that are directly related to, and 
                        necessary for, the licensing and 
                        regulation of such activity in a manner 
                        consistent with sections 7(c), 8, and 
                        10;
                          (ii) the allocation of criminal and 
                        civil jurisdiction between the State 
                        and the Indian tribe necessary for the 
                        enforcement of such laws (including any 
                        rule or regulation);
                          (iii) the assessment by the State of 
                        the costs associated with such 
                        activities in such amounts as are 
                        necessary to defray the costs of 
                        regulating such activity;
                          (iv) taxation by the Indian tribe of 
                        such activity in amounts comparable to 
                        amounts assessed by the State for 
                        comparable activities;
                          (v) remedies for breach of compact 
                        provisions;
                          (vi) standards for the operation of 
                        such activity and maintenance of the 
                        gaming facility, including licensing, 
                        in a manner consistent with sections 
                        7(c), 8, and 10; and
                          (vii) any other subject that is 
                        directly related to the operation of 
                        gaming activities and the impact of 
                        gaming on tribal, State, and local 
                        governments.
                  (B) Statutory construction with respect to 
                assessments.--Except for any assessments for 
                services agreed to by an Indian tribe in 
                compact negotiations, nothing in this section 
                may be construed as conferring upon a State or 
                any political subdivision thereof the authority 
                to impose any tax, fee, charge, or other 
                assessment upon an Indian tribe, an Indian 
                gaming operation or the value generated by the 
                gaming operation, or any person or entity 
                authorized by an Indian tribe to engage in 
                class III gaming activity in conformance with 
                this Act.
          (6) Statutory construction with respect to certain 
        rights of indian tribes.--Nothing in this subsection 
        impairs the right of an Indian tribe to regulate class 
        III gaming on the Indians lands of the Indian tribe 
        concurrently with a State and the Comission, except to 
        the extent that such regulation is inconsistent with, 
        or less stringent than, this Act or any laws (including 
        any rule or regulation) made applicable by any compact 
        entered into by the Indian tribe under this subsection 
        that is in effect.
          (7) Exemption.--The provisions of section 2 and 5 of 
        the Act of January 2, 1951 (commonly referred to as the 
        `Gambling Devices Transportation Act') (64 Stat. 1134, 
        chapter 1194, 15 U.S.C. 1172 and 1175) shall not apply 
        to any class II gaming activity or any gaming activity 
        conducted pursuant to a compact entered into after the 
        date of enactment of this Act or conducted pursuant to 
        procedures prescribed by the Secretary under this Act, 
        but in no event shall this paragraph be construed as 
        invalidating any exemption from section 2 or 5 of the 
        Act of January 2, 1951, for any compact entered into 
        prior to the date of enactment of this Act or any 
        procedures for conducted a gaming activity prescribed 
        by the Secretary prior to such date of enactment.
    (b) Jurisdiction of United States District Court for the 
District of Columbia.--The United States District Court for the 
District of Columbia shall have jurisdiction over any action 
initiated by the Secretary, the Commission, a State, or an 
Indian tribe to enforce any provision of a compact under 
subsection (a) that is in effect or to enjoin a class III 
gaming activity located on Indian lands and conducted in 
violation of such compact that is in effect and that was 
entered into under subsection (a).
    (c) Revocation of Ordinance.--
          (1) In general.--The governing body of an Indian 
        tribe, in its sole discretion, may adopt an ordinance 
        or resolution revoking any prior ordinance or 
        resolution that authorized class III gaming on the 
        Indian lands of the Indian tribe. Such revocation shall 
        render class III gaming illegal on the Indian lands of 
        such Indian tribe.
          (2) Publication of revocation.--An Indian tribe shall 
        submit any revocation ordinance or resolution described 
        in paragraph (1) to the Commission. Not later than 90 
        days after the date on which the Commission receives 
        such ordinance or resolution, the Commission shall 
        publish such ordinance or resolution in the Federal 
        Register. The revocation provided by such ordinance or 
        resolution shall take effect on the date of such 
        publication.
          (3) Conditional operation.--Notwithstanding any other 
        provision of this subsection--
                  (A) any person or entity operating a class 
                III gaming activity pursuant to this subsection 
                on the date on which an ordinance or resolution 
                described in paragraph (1) that revokes 
                authorization for such class III gaming 
                activity is published in the Federal Register 
                may, during the 1-year period beginning on the 
                date on which such revocation, ordinance, or 
                resolution is published under paragraph (2), 
                continue to operate such activity in 
                conformance with an applicable compact approved 
                or issued under subsection (a) that is in 
                effect; and
                  (B) any civil action that arises before, and 
                any crime that is committed before, the 
                expiration of such 1-year period shall not be 
                affected by such revocation ordinance, or 
                resolution.
    (d) Certain Class III Gaming Activities.--
          (1) Compacts entered into before the date of 
        enactment of the indian gaming regulatory act 
        amendments act of 1995.--
                  (A) In general.--Subject to subparagraph (B), 
                class III gaming activities that are authorized 
                under a compact approved, or procedures 
                prescribed, by the Secretary under the 
                authority of this Act prior to the date of 
                enactment of the Indian Gaming Regulatory Act 
                Amendments Act of 1995 shall, during such 
                period as the compact is in effect, remain 
                lawful for the purposes of this Act, 
                notwithstanding the Indian Gaming Regulatory 
                Act Amendments Act of 1995 and the amendments 
                made by such Act or any change in State law 
                enacted after the approval or issuance of the 
                compact.
                  (B) Compact or procedures subject to minimum 
                regulatory standards.--Subparagraph (A) shall 
                apply to a compact or procedures described in 
                that subparagraph on the condition that any 
                class III gaming activity conducted under the 
                compact or procedures shall be subject to all 
                Federal minimum regulatory standards 
                established under this Act and the regulations 
                promulgated under this Act.
          (2) Compact entered into after the date of enactment 
        of the indian gaming regulatory act amendments act of 
        1995.--Any compact entered into under subsection (a) 
        after the date specified in paragraph (1) shall remain 
        lawful for the purposes of this Act, notwithstanding 
        any change in State law enacted after the approval or 
        issuance of the compact.

SEC. 13. REVIEW OF CONTRACTS.

    (a) Contracts Included.--The Commission shall, in 
accordance with this section, review and approve or 
disapprove--
          (1) any management contract for the operation and 
        management of any gaming activity that an Indian tribe 
        may engage in under this Act; and
          (2) unless licensed by an Indian tribe consistent 
        with the minimum Federal standards adopted pursuant to 
        section 7(c), any gaming-related contract.
    (b) Management Contract Requirements.--The Commission shall 
approve any management contract between an Indian tribe and a 
person licensed by an Indian tribe or the Commission that is 
entered into pursuant to this Act only if the Commission 
determines that the contract provides for--
          (1) adequate accounting procedures that are 
        maintained, and verifiable financial reports that are 
        prepared, by or for the governing body of the Indian 
        tribe on a monthly basis;
          (2) access to the daily gaming operations by 
        appropriate officials of the Indian tribe who shall 
        have the right to verify the daily gross revenues and 
        income derived from any gaming activity;
          (3) a minimum guaranteed payment to the Indian tribe 
        that has preference over the retirement of any 
        development and construction costs;
          (4) an agreed upon ceiling for the repayment of any 
        development and construction costs;
          (5) a contract term of not to exceed 5 years, except 
        that, upon the request of an Indian tribe, the 
        Commission may authorize a contract term that exceeds 5 
        years but does not exceed 7 years if the Commission is 
        satisfied that the capital investment required, and the 
        income projections for, the particular gaming activity 
        require the additional time; and
          (6) grounds and mechanisms for the termination of the 
        contract, but any such termination shall not require 
        the approval of the Commission.
    (c) Management Fee Based on Percentage of Net Revenues.--
          (1) Percentage fee.--The Commission may approve a 
        management contract that provides for a fee that is 
        based on a percentage of the net revenues of a tribal 
        gaming activity if the Commission determines that such 
        percentage fee is reasonable, taking into consideration 
        surrounding circumstances.
          (2) Fee amount.--Except as provided in paragraph (3), 
        a fee described in paragraph (1) shall not exceed an 
        amount equal to 30 percent of the net revenues 
        described in such paragraph.
          (3) Exception.--Upon the request of an Indian tribe, 
        if the Commission is satisfied that the capital 
        investment required, and income projections for, a 
        tribal gaming activity, necessitate a fee in excess of 
        the amount specified in paragraph (2), the Commission 
        may approve a management contract that provides for a 
        fee described in paragraph (1) in an amount in excess 
        of the amount specified in paragraph (2), but not to 
        exceed 40 percent of the net revenues described in 
        paragraph (1).
    (d) Gaming-Related Contract Requirements.--The Commission 
shall approve a gaming-related contract covered under 
subsection (a)(2) that is entered into pursuant to this Act 
only if the Commission determines that the contract provides 
for--
          (1) grounds and mechanisms for termination of the 
        contract, but such termination shall not require the 
        approval of the Commission; and
          (2) such other provisions as the Commission may be 
        empowered to impose by this Act.
    (e) Time Period for Review.--
          (1) In general.--Except as provided in paragraph (2), 
        not later than 90 days after the date on which a 
        management contract or other gaming-related contract is 
        submitted to the Commission for approval, the 
        Commission shall approve or disapprove such contract on 
        the merits of the contract. The Commission may extend 
        the 90-day period for an additional period of not more 
        than 45 days if the Commission notifies the Indian 
        tribe in writing of the reason for the extension of the 
        period. The Indian tribe may bring an action in the 
        United States District Court for the District of 
        Columbia to compel action by the Commission if a 
        contract has not been approved or disapproved by the 
        termination date of an applicable period under this 
        subsection.
          (2) Effect of failure of commission to act on certain 
        gaming-related contracts.--Any gaming-related contract 
        for an amount less than or equal to $100,000 that is 
        submitted to the Commission pursuant to paragraph (1) 
        by a person who holds a valid license that is in effect 
        under this Act shall be deemed to be approved, if by 
        the date that is 90 days after the contract is 
        submitted to the Commission, the Commission fails to 
        approve or disapprove the contract.
    (f) Contract Modifications and Void Contracts.--The 
Commission, after providing notice and a hearing on the 
record--
          (1) shall have the authority to require appropriate 
        contract modifications to ensure compliance with the 
        provisions of this Act; and
          (2) may void any contract regulated by the Commission 
        under this Act if the Commission determines that any 
        provision of this Act has been violated by the terms of 
        the contract.
    (g) Interests in Real Property.--No contract regulated by 
this Act may transfer or, in any other manner convey any 
interest in land or any other real property, unless specific 
statutory authority exists, all necessary approvals for such 
transfer or conveyance have been obtained, and such transfer or 
conveyance is clearly specified in the contract.
    (h) Authority of the Secretary.--The authority of the 
Secretary under section 2103 of the Revised Statutes (25 U.S.C. 
81) shall not exceed to any contract or agreement that is 
regulated pursuant to this Act.
    (i) Disapproval of Contracts.--The Commission may not 
approve a contract if the Commission determines that--
          (1) any person having a direct financial interest in, 
        or management responsibility for, such contract, and, 
        in the case of a corporation, any individual who serves 
        on the board of directors of such corporation, and any 
        of the stockholders who hold (directly or indirectly) 
        10 percent or more of its issued and outstanding 
        stock--
                  (A) is an elected member of the governing 
                body of the Indian tribe which is a party to 
                the contract;
                  (B) has been convicted of any felony or 
                gaming offense;
                  (C) has knowingly and willfully provided 
                materially important false statements or 
                information to the Commission or the Indian 
                tribe pursuant to this Act or has refused to 
                respond to questions propounded by the 
                Commission; or
                  (D) has been determined to be a person whose 
                prior activities, criminal record, if any, or 
                reputation, habits, and association 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 the business and financial 
                arrangements incidental thereto;
          (2) the contractor--
                  (A) has unduly interfered or influenced for 
                its gain or advantage any decision or process 
                of tribal government relating to the gaming 
                activity; or
                  (B) has attempted to interfere or influence a 
                decision pursuant to subparagraph (A);
          (3) the contractor has deliberately or substantially 
        failed to comply with the terms of the contract; or
          (4) a trustee, exercising the skill and diligence 
        that a trustee is commonly held to, would not approve 
        the contract.

SEC. 14. REVIEW OF EXISTING CONTRACTS: INTERIM AUTHORITY.

    (a) Review of Existing Contracts.--
          (i) In general.--At any time after the Commission is 
        sworn in and has promulgated regulations for the 
        implementation of this Act, the Commission shall notify 
        each Indian tribe and management contractor who, prior 
        to the enactment of the Indian Gaming Regulatory Act 
        Amendments Act of 1995, entered into a management 
        contract that was approved by the Secretary, that the 
        Indian tribe is required to submit to the Commission 
        such contract, including all collateral agreements 
        relating to the gaming activity, for review by the 
        Commission not later than 60 days after such 
        notification. Any such contract be valid under this 
        Act, unless the contract is disapproved by the 
        Commission under this section.
          (2) Review.--
                  (A) In general.--Not later than 180 days 
                after the submission of a management contract, 
                including all collateral agreements, to the 
                Commission pursuant to this section, the 
                Commission shall review the contract to 
                determine whether the contract meets the 
                requirements of section 13 and was entered into 
                in accordance with the procedures under such 
                section.
                  (B) Approval of contract.--The Commission 
                shall approve a management contract submitted 
                for review under subsection (a) if the 
                Commission determines that--
                          (i) the management contract meets the 
                        requirements of section 13: and
                          (ii) the management contractor has 
                        obtained all of the licenses that the 
                        contractor is required to obtain under 
                        this Act.
                  (C) Notification of necessary modification.--
                If the Commission determines that a contract 
                submitted under this section does not meet the 
                requirements of section 13--
                          (i) the Commission shall provide the 
                        parties to such contract written 
                        notification of the necessary 
                        modifications; and
                          (ii) the parties shall have 180 days 
                        after the date on which such 
                        notification is provided to make the 
                        modifications.
    (b) Interim Authority of the National Indian Gaming 
Commission.--
          (1) In general.--Notwithstanding any other provision 
        of this Act, the Chairman and the associate members of 
        the National Indian Gaming Commission who are holding 
        office on the day before the date of enactment of the 
        Indian Gaming Regulatory Act Amendments Act of 1995 
        shall exercise the authorities described in paragraph 
        (2) until such time as all of the initial members of 
        the Federal Indian Gaming Regulatory Commission are 
        sworn into office.
          (2) Authorities.--Until the date specified in 
        paragraph (1), the Chairman and the Associate members 
        of the National Indian Gaming Commission referred to in 
        that paragraph shall exercise those authorities vested 
        in the Federal Indian Gaming Regulatory Commission by 
        this Act (other than the authority specified in section 
        7(a)(1)(A) and any other authority directly related to 
        the administration of the Federal Indian Gaming 
        Regulatory Commission as an independent establishment, 
        as defined in section 104 of title 5, United States 
        Code).
          (3) Regulations.--Until such time as the Commission 
        promulgates revised regulations after the date of 
        enactment of the Indian Gaming Regulatory Act 
        Amendments Act of 1995, the regulations promulgated 
        under this Act, as in effect on the day before the date 
        of enactment of the Indian Gaming Regulatory Act 
        Amendments Act of 1995, shall apply.

SEC. 15. CIVIL PENALTIES.

    (a) Amount.--Any person who commits any act or causes to be 
done any act that violates any provision of this Act or any 
rule or regulation promulgated under this Act, or who fails to 
carry out any act or causes the failure to carry out any act 
that is required by any such provision of law shall be subject 
to a civil penalty in an amount equal to not more than $50,000 
per day for each such violation.
    (b) Assessment and Collection.--
          (1) In general.--Each civil penalty assessed under 
        this section shall be assessed by the Commission and 
        collected in a civil action brought by the Attorney 
        General on behalf of the United States. Before the 
        Commission refers civil penalty claims to the Attorney 
        General, the Commission may compromise the civil 
        penalty after affording the person charged with a 
        violation referred to in subsection (a), an opportunity 
        to present views and evidence in support of such action 
        by the Commission to establish that the alleged 
        violation did not occur.
          (2) Penalty amount.--In determining the amount of a 
        civil penalty assessed under this section, the 
        Commission shall take into account--
                  (A) the nature, circumstances, extent, and 
                gravity of the violation committed;
                  (B) with respect to the person found to have 
                committed such violation, the degree of 
                culpability, any history of prior violations, 
                ability to pay, the effect on ability to 
                continue to do business; and
                  (C) such other matters as justice may 
                require.
    (c) Temporary Closures.--
          (1) In general.--The Commission may order the 
        temporary closure of all or part of an Indian gaming 
        operation for a substantial violation of any provision 
        of law referred to in subsection (a).
          (2) Hearing on order of temporary closure.--
                  (A) In general.--Not later than 30 days after 
                the issuance of an order of temporary closure, 
                the Indian tribe or the individual owner of a 
                gaming operation shall have the right to 
                request a hearing on the record before the 
                Commission to determine whether such order 
                should be made permanent or dissolved.
                  (B) Deadlines relating to hearing.--Not later 
                than 30 days after a request for a hearing is 
                made under subparagraph (A), the Commission 
                shall conduct such hearing. Not later than 30 
                days after the termination of the hearing, the 
                Commission shall render a final decision on the 
                closure.

SEC. 16. JUDICIAL REVIEW.

    A decision made by the Commission pursuant to section 7, 8, 
10, 13, 14, or 15 shall constitute a final agency decision for 
purposes of appeal to the United States District Court for the 
District of Columbia pursuant to chapter 7 of title 5, United 
States Code.

SEC. 17. COMMISSION FUNDING.

    (a) Annual Fees.--
          (1) In general.--The Commission shall establish a 
        schedule of fees to be paid to the Commission annually 
        by gaming operations for each class II and class III 
        gaming activity that is regulated by this Act.
          (2) Limitation on fee rates.--
                  (A) In general.--For each gaming operation 
                regulated under this Act, the rate of the fees 
                imposed under the schedule established under 
                paragraph (1) shall not exceed 2 percent of the 
                net revenues of such gaming operation.
                  (B) Total amount of fees.--The total amount 
                of all fees imposed during any fiscal year 
                under the schedule established under paragraph 
                (1) shall be equal to not more than 
                $25,000,000.
          (3) Annual fee rate.--The Commission, by a vote of a 
        majority of the members of the Commission, shall 
        annually adopt the rate of the fees authorized by this 
        section. Such fees shall be payable to the Commission 
        on a monthly basis.
          (4) Adjustment of fees.--The fees imposed upon a 
        gaming operation may be reduced by the Commission to 
        take into account any regulatory functions that are 
        performed by an Indian tribe, or the Indian tribe and a 
        State, pursuant to regulations promulgated by the 
        Commission.
          (5) Consequences of failure to pay fees.--Failure to 
        pay the fees imposed under the schedule established 
        under paragraph (1) shall, subject to regulations 
        promulgated by the Commission, be grounds for 
        revocation of the approval of the Commission of any 
        license required under this Act for the operation of 
        gaming activities.
          (6) Surplus funds.--To the extent that revenues 
        derived from fees imposed under the schedule 
        established under paragraph (1), exceed the limitation 
        in paragraph (2)(B) or are not expended or committed at 
        the close of any fiscal year, such surplus funds shall 
        be credited to each gaming activity that is the subject 
        of the fees on a pro rata basis against such fees 
        imposed for the succeeding year.
    (b) Reimbursement of Costs.--The Commission is authorized 
to assess any applicant, except the governing body of an Indian 
tribe, for any license required pursuant to this Act. Such 
assessment shall be an amount equal to the actual costs of 
conducting all reviews and investigations necessary for the 
Commission to determine whether a license should be granted or 
denied to the applicant.
    (c) Annual Budget.--
          (1) In general.--For the first full fiscal year 
        beginning after the date of enactment of the Indian 
        Gaming Regulatory Act Amendments Act of 1995, and each 
        fiscal year thereafter, the Commission shall adopt an 
        annual budget for the expenses and operation of the 
        Commission.
          (2) Request for appropriations.--The budget of the 
        Commission may include a request for appropriations 
        authorized under section 18.
          (3) Submission to congress.--Nothwithstanding any 
        other provision of law, a request for appropriations 
        made pursuant to paragraph (2) shall be submitted by 
        the Commission directly to the Congress beginning with 
        the request for the first full fiscal year beginning 
        after the date of enactment of this Act, and shall 
        include the proposed annual budget of the Commission 
        and the estimated revenues to be derived from fees.

SEC. 18. AUTHORIZATION OF APPROPRIATIONS.

    Subject to section 17, there are authorized to be 
appropriated $5,000,000 to provide for the operation of the 
Commission for each of fiscal years, 1997, 1998, and 1999, to 
remain available until expended.

SEC. 19. APPLICATION OF THE INTERNAL REVENUE CODE OF 1986.

    (a) In general.--The provisions of the Internal Revenue 
Code of 1986 (including sections 1141, 3402(q), 6041, and 
chapter 35 of such Code) concerning the reporting and 
withholding of taxes with respect to the winnings from gaming 
or wagering operations shall apply to Indian gaming operations 
conducted pursuant to this Act in the same manner as such 
provisions apply to State gaming and wagering operations. Any 
exemptions to States with respect to taxation of such gaming 
and wagering operations shall be allowed to Indian tribes.
    (b) Exemption.--The provisions of section 6050I of the 
Internal Revenue Code of 1986 shall apply to an Indian gaming 
establishment that is not designated by the Secretary of the 
Treasury as a financial institution pursuant to chapter 53 of 
title 31, United States Code.
    (c) Statutory Construction.--This section shall apply 
notwithstanding any other provision of law enacted before, on, 
or after, the date of enactment of this Act unless such other 
provision of law specifically cites this subsection.
    (d) Access to Information by State and Tribal Government.--
Subject to section 7(d) upon the request of a State or the 
governing body of an Indian tribe, the Commission shall make 
available any law enforcement information which it has obtained 
pursuant to such section, unless otherwise prohibited by law, 
in order to enable the State or the Indian tribe to carry out 
its responsibilities under this Act or any compact approved by 
the Secretary.''

Sec. 2719. Gaming on lands acquired after October 17, 1988

    (a) Prohibition on Lands Acquired in Trust by Secretary.--
Except as provided in subsection (b) of this section, gaming 
regulated by this chapter shall not be conducted on lands 
acquired by the Secretary in trust for the benefit of an Indian 
tribe after October 17, 1988, unless--
          (1) such lands are located within or contiguous to 
        the boundaries of the reservation of the Indian tribe 
        on October 17, 1988; or
          (2) the Indian tribe has no reservation on October 
        17, 1988, and--
                  (A) such lands are located in Oklahoma, and--
                          (i) are within the boundaries of the 
                        Indian tribe's former reservation, as 
                        defined by the Secretary; or
                          (ii) are contiguous to other land 
                        held in trust or restricted status by 
                        the United States for the Indian tribe 
                        in Oklahoma; or
                  (B) such lands are located in a State other 
                than Oklahoma and are within the Indian tribe's 
                last recognized reservation within the State or 
                States within which such Indian tribe is 
                presently located.
    (b) Exceptions.--
          (1) Subsection (a) of this section will not apply 
        when--
                  (A) the Secretary, after consultation with 
                the Indian tribe and appropriate State, and 
                local officials, including officials of other 
                nearby Indian tribes, determines that a gaming 
                establishment on newly acquired lands would be 
                in the best interest of the Indian tribe and 
                its members, and would not be detrimental to 
                the surrounding community, but only if the 
                Governor of the State in which the gaming 
                activity is to be conducted concurs in the 
                Secretary's determination; or
                  (B) lands are taken into trust as part of--
                          (i) a settlement of a land claim,
                          (ii) the initial reservation of an 
                        Indian tribe acknowledged by the 
                        Secretary under the Federal 
                        acknowledgment process, or
                          (iii) the restoration of lands for an 
                        Indian tribe that is restored to 
                        Federal recognition.
          (2) Subsection (a) of this section shall not apply 
        to--
                  (A) any lands involved in the trust petition 
                of the St. Croix Chippewa Indians of Wisconsin 
                that is the subject of the action filed in the 
                United States District Court for the District 
                of Columbia entitled St. Croix Chippewa Indians 
                of Wisconsin v. United States, Civ. No. 86-
                2278, or
                  (B) the interests of the Miccosukee Tribe of 
                Indians of Florida in approximately 25 
                contiguous acres of land, more or less, in Dade 
                County, Florida, located within one mile of the 
                intersection of State Road Numbered 27 (also 
                known as Krome Avenue) and the Tamiami Trail.
          (3) Upon request of the governing body of the 
        Miccosukee Tribe of Indians of Florida, the Secretary 
        shall, notwithstanding any other provision of law, 
        accept the transfer by such Tribe to the Secretary of 
        the interests of such Tribe in the lands described in 
        paragraph (2)(B) and the Secretary shall declare that 
        such interests are held in trust by the Secretary for 
        the benefit of such Tribe and that such interests are 
        part of the reservation of such Tribe under sections 
        465 and 467 of this title, subject to any encumbrances 
        and rights that are held at the time of such transfer 
        by any person or entity other than such Tribe. The 
        Secretary shall publish in the Federal Register the 
        legal description of any lands that are declared held 
        in trust by the Secretary under this paragraph.
    (c) Authority of Secretary Not Affected.--Nothing in this 
section shall affect or diminish the authority and 
responsibility of the Secretary to take land into trust.
    [(d) Application of Internal Revenue Code of 1986.--
          [(1) The provisions of the Internal Revenue Code of 
        1986 (including sections 1441, 3402(q), 6041, and 
        6050I, and chapter 35 of such Code) concerning the 
        reporting and withholding of taxes with respect to the 
        winnings from gaming or wagering operations shall apply 
        to Indian gaming operations conducted pursuant to this 
        chapter, or under a Tribal-State compact entered into 
        under section 2710(d)(3) of this title is in effect, in 
        the same manner as such provisions apply to State 
        gaming and wagering operations.
          [(2) The provisions of this subsection shall apply 
        notwithstanding any other provision of law enacted 
        before, on, or after October 17, 1988, unless such 
        other provision of law specifically cites this 
        subsection.]

Sec. 2720. Dissemination of information

    Consistent with the requirements of this chapter, sections 
1301, 1302, 1303, and 1304 of Title 18 shall not apply to any 
gaming conducted by an Indian tribe pursuant to this chapter.

Sec. 2721. Severability

    In the event that any section or provision of this chapter, 
or amendment, made by this chapter, is held invalid, it is the 
intent of Congress that the remaining sections or provisions of 
this chapter, and amendments made by this chapter, shall 
continue in full force and effect.
          * * * * * * *

                       10 U.S.C. Sec. 2323a(e)(1)

    (e)(1) The term ``Indian Lands'' has the meaning given that 
term by [section 4(4) of the Indian Gaming Regulatory Act (102 
Stat. 2468; 25 U.S.C. 2703(4))] Section 4(14) of the Indian 
Gaming Regulatory Act.
          * * * * * * *

                          18 U.S.C. Sec. 1166

    (c) For the purpose of this section the term ``gambling'' 
does not include--
          (1) class I gaming or class II gaming regulated by 
        the Indian Gaming Regulatory Act, or
          (2) class II gaming conducted under [a Tribal-State 
        compact approved by the Secretary of the Interior under 
        section 11(d)(8) of the Indian Gaming Regulatory Act 
        that is in effect] a compact approved by the Secretary 
        of the Interior under section 12(a)(4) of the Indian 
        Gaming Regulatory Act that is in effect or pursuant to 
        procedures prescribed by the Secretary of the Interior 
        under section 12(a)(3)(B)(iii) of such Act.
    (d) The United States shall have exclusive jurisdiction 
over criminal prosecutions of violations of State gambling laws 
that are made applicable under this section to Indian country, 
unless an Indian tribe pursuant to [a Tribal-State compact 
approved by the Secretary of the Interior under section 
11(d)(8) of the Indian Gaming Regulatory Act] a compact 
approved by the Secretary of the Interior under section 
12(a)(4) of the Indian Gaming Regulatory Act or pursuant to 
procedures prescribed by the Secretary of the Interior under 
section 12(a)(3)(B)(iii) of such Act, or under any provision of 
Federal law, has consented to the transfer to the State of 
criminal jurisdiction with respect to gambling on the lands of 
the Indian tribe.
          * * * * * * *

                          18 U.S.C. Sec. 1167

    (a) Whoever abstracts, purloins, willfully misapplies, or 
takes and carries away with intent to steal, any money, funds, 
or other property of a value of $1,000 or less belonging to an 
establishment operated by or for or licensed by an Indian tribe 
[pursuant to an ordinance of resolution approved by the 
National Indian Gaming Commission] shall be fined under this 
title or be imprisoned for not more than one year, or both.
    (b) whoever abstracts, purloins, willfully misapplies, or 
takes and carries away with intent to steal, any money, funds, 
or other property of a value in excess of $1,000 belonging to a 
gaming establishment operated by or licensed by an Indian tribe 
[pursuant to an ordinance of resolution approved by the 
National Indian Gaming Commission] shall be fined under this 
title, or imprisoned for not more than ten years, or both.
          * * * * * * *

                          18 U.S.C. Sec. 1168

    (a) Whoever, being an officer, employee, or individual 
licensee of a gaming establishment operated by or for or 
licensed by an Indian tribe [pursuant to an ordinance or 
resolution approved by the National Indian Gaming Commission], 
embezzles, abstracts, purloins, willfully misapplies, or takes 
and carries away with intent to steal, any moneys, funds, 
assets, or other property of such establishment of a value of 
$1,000 or less shall be fined not more than $250,000 or 
imprisoned not more than five years, or both;
    (b) Whoever, being an officer, employee, or individual 
licensee of a gaming establishment operated by or for or 
licensed by an Indian Tribe [pursuant to an ordinance or 
resolution approved by the National Indian Gaming Commission,] 
embezzles, abstracts, purloins, willfully misapplies, or takes 
and carries away with intent to steal, any moneys, funds, 
assets, or other property of such establishment of a value in 
excess of $1,000 shall be fined not more than $1,000,000 or 
imprisoned for not more than twenty years, or both.
          * * * * * * *

       Sec. 168(j)(4)(A)(iv) of the Internal Revenue Code of 1986

                          (iv) not property (or any portion 
                        thereof) placed in service for purposes 
                        of conducting or housing class I, II, 
                        or III gaming (as defined in section 4 
                        of the [Indian Regulatory Act] Indian 
                        Gaming Regulatory Act (25 U.S.C. 
                        2703)).
          * * * * * * *

                         28 U.S.C. Sec. 3701(2)

          (2) the term ``governmental entity'' means a State, a 
        political subdivision of State, or an entity or 
        organization described in [section 4(5) of the Indian 
        Gaming Regulatory Act (25 U.S.. 2703(5))] section 4(15) 
        of the Indian Gaming Regulatory Act, that has 
        governmental authority within the territorial 
        boundaries of the United States, including on lands 
        described in [section 4(4) of such Act (25 U.S.C. 
        2703(4))] section 4(14) of such Act,
          * * * * * * *

                         28 U.S.C. Sec. 3704(b)

    (b) Except as provided in subsection (a), section 3702 
shall apply on lands described in [section 4(4) of the Indian 
Gaming Regulatory Act] section 4(14) of the Indian Gaming 
Regulatory Act (25 U.S.C. 2703(4)).