Technical Standards, 45228-45233 [2017-20635]
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Federal Register / Vol. 82, No. 187 / Thursday, September 28, 2017 / Proposed Rules
participating State’s performance in
implementing the requirements of the
Program at least once every 5 years.
(1) The Operating Administration
must provide notice and an opportunity
for public comment during the review.
(2) At the conclusion of its last review
prior to the expiration of the term, the
Operating Administration may extend a
State’s participation in the Program for
an additional term of not more than 5
years (as long as such term does not
extend beyond the termination date of
the Program) or terminate the State’s
participation in the Program.
(c) Early Termination. (1) If the
Operating Administration, in
consultation with the Office of the
Secretary and the Chair of CEQ,
determines that a State is not
administering the Program consistent
with the terms of its written agreement,
or the requirements of this part or 23
U.S.C. 330, the Operating
Administration must provide the State
notification of that determination.
(2) After notifying the State of its
determination under paragraph (c)(1),
the Operating Administration must
provide the State a maximum of 90 days
to take the appropriate corrective action.
If the State fails to take such corrective
action, the Operating Administration
may terminate the State’s participation
in the Program.
Title 49—Transportation
PART 264—PROGRAM FOR
ELIMINATING DUPLICATION OF
ENVIRONMENTAL REVIEWS AND THE
SURFACE TRANSPORTATION
PROJECT DELIVERY PROGRAM
4. The authority citation for part 264
is revised to read as follows:
PART 622—ENVIRONMENTAL IMPACT
AND RELATED PROCEDURES
7. The authority citation for part 622
is revised to read as follows:
■
Authority: 42 U.S.C. 4321 et seq.; 49
U.S.C. 303 and 5323(q); 23 U.S.C. 139, 326,
327, and 330; Pub. L. 109–59, 119 Stat. 1144,
sections 6002 and 6010; 40 CFR parts 1500–
1508; 49 CFR 1.81; Pub. L. 112–141, 126 Stat.
405, sections 1315, 1316, 1317, and 1318;
and Pub. L. 114–94, section 1309.
■
8. Revise § 622.101 to read as follows:
§ 622.101
Cross-reference to procedures.
The procedures for complying with
the National Environmental Policy Act
of 1969, as amended (42 U.S.C. 4321 et
seq.), and related statutes, regulations,
and orders are set forth in part 771 of
title 23 of the Code of Federal
Regulations. The procedures for
complying with 49 U.S.C. 303,
commonly known as ‘‘Section 4(f),’’ are
set forth in part 774 of title 23 of the
Code of Federal Regulations. The
procedures for complying with the
surface transportation project delivery
program application requirements and
termination are set forth in part 773 of
title 23 of the Code of Federal
Regulations. The procedures for
participating and complying with the
program for eliminating duplication of
environmental reviews are set forth in
part 778 of title 23 of the Code of
Federal Regulations.
[FR Doc. 2017–20561 Filed 9–27–17; 8:45 am]
BILLING CODE 4910–22–P
NATIONAL INDIAN GAMING
COMMISSION
■
25 CFR Part 547
Authority: 23 U.S.C. 327; 49 CFR 1.81; 23
U.S.C. 330.
RIN 3141–AA64
5. Revise the heading for part 264 to
read as set forth above.
■ 6. Revise § 264.101 to read as follows:
Technical Standards
■
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§ 264.101 Procedures for complying with
the surface transportation project delivery
program application requirements and
termination and the procedures for
participating in and complying with the
program for eliminating duplication of
environmental reviews.
The procedures for complying with
the surface transportation project
delivery program application
requirements and termination are set
forth in part 773 of title 23 of the Code
of Federal Regulations. The procedures
for participating in and complying with
the program for eliminating duplication
of environmental reviews are set forth in
part 778 of title 23 of the Code of
Federal Regulations.
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National Indian Gaming
Commission.
ACTION: Proposed rule.
AGENCY:
The National Indian Gaming
Commission proposes to amend the
minimum technical standards for Class
II gaming systems and equipment. The
proposed rule would amend regulations
that describe how tribal governments,
tribal gaming regulatory authorities, and
tribal gaming operations comply with
the technical standards. In particular,
the proposed rule amends the
requirement that gaming systems
manufactured before November 10,
2008, be modified to meet standards
applicable to gaming systems
manufactured on or after November 10,
2008, or be removed from the gaming
SUMMARY:
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floor by November 10, 2018. The
Commission proposes this action to
assist tribal governments, tribal gaming
regulatory authorities, and operations in
ensuring the integrity and security of
Class II games and gaming revenue
through minimum technical standards
for Class II gaming systems and
equipment.
DATES: The agency must receive
comments on or before November 13,
2017.
ADDRESSES: You may send comments by
any of the following methods:
• Federal eRulemaking Portal: Go to
https://www.regulations.gov. Follow the
instructions for submitting comments.
• Email: 547.5_Comments@nigc.gov.
• Fax: 202–632–7066.
• Mail: National Indian Gaming
Commission, 1849 C Street NW., MS
1621, Washington, DC 20240.
• Hand Delivery: National Indian
Gaming Commission, 90 K Street NE.,
Suite 200, Washington, DC 20002,
between 9 a.m. and 5 p.m., Monday
through Friday, except Federal holidays.
FOR FURTHER INFORMATION CONTACT:
Austin Badger, National Indian Gaming
Commission; Telephone: 202–632–7003.
SUPPLEMENTARY INFORMATION:
I. Comments Invited
Interested parties are invited to
participate in this proposed rulemaking
by submitting such written data, views,
or arguments as they may desire.
Comments that provide the factual basis
supporting the views and suggestions
presented are particularly helpful in
developing reasoned regulatory
decisions on the proposal.
II. Background
The Indian Gaming Regulatory Act
(IGRA or Act), Public Law 100–497, 25
U.S.C. 2701 et seq., was signed into law
on October 17, 1988. The Act
establishes the National Indian Gaming
Commission (NIGC or Commission) and
sets out a comprehensive framework for
the regulation of gaming on Indian
lands. On October 8, 2008, the NIGC
published a final rule in the Federal
Register called Technical Standards for
Electronic, Computer, or Other
Technologic Aids Used in the Play of
Class II Games. 73 FR 60508. The rule
added a new part to the NIGC’s
regulations establishing a process for
ensuring the integrity of electronic Class
II games and aids. The standards were
designed to assist tribal gaming
regulatory authorities and operators
with ensuring the integrity and security
of Class II gaming, the accountability of
Class II gaming revenue, and provide
guidance to equipment manufacturers
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Federal Register / Vol. 82, No. 187 / Thursday, September 28, 2017 / Proposed Rules
and distributors of Class II gaming
systems. The standards do not classify
which games are class II and which
games are class III.
When implemented in 2008, the part
547 technical standards introduced
several new requirements for Class II
gaming systems designed to protect the
security and integrity of Class II gaming
systems and tribal operations. The
Commission understood, however, that
some existing Class II gaming systems
might not meet all of the requirements
of the technical standards. Therefore, to
avoid any potentially significant
economic and practical consequences of
requiring immediate compliance, the
Commission implemented a five year
sunset provision which allowed eligible
gaming systems manufactured before
November 10, 2008 (2008 Systems) to
remain on the gaming floor. The
Commission believed that a five year
period was sufficient for market forces
to move equipment toward compliance
with the standards applicable to gaming
systems manufactured on or after
November 10, 2008.
On September 21, 2012, the NIGC
published a final rule in the Federal
Register which included an amendment
delaying the sunset provision by an
additional five years. 77 FR 58473. The
Commission recognized that its prior
analysis regarding the continued
economic viability of the 2008 Systems
had proven to be mistaken. The NIGC
established the initial five year period in
the midst of a much stronger economy.
In the time that followed the economic
downturn, many tribal gaming
operations set new priorities that
required keeping a 2008 System on the
gaming floor for a longer period of time.
Balancing the economic needs against a
risk that potentially increases as
technology advances and 2008 Systems
remain static, the Commission
determined that 2008 Systems could
continue to be offered for play until
November 10, 2018.
Now, with the November 10, 2018,
sunset approaching, the Commission
believed it appropriate to include the
2008 Systems and associated sunset
provision of the part 547 technical
standards as a topic for consultation.
The topic was therefore included in a
November 22, 2016, letter to tribal
leaders introducing the Commission’s
2017 consultation series.
III. Development of the Proposed Rule
On March 23, 2017, in Tulsa, OK, and
April 12, 2017, in San Diego, CA, the
NIGC consulted on the 2008 Systems
and associated sunset provision of part
547. The Commission also solicited
written comments through May 31,
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2017. In addition, NIGC staff attended
several National Indian Gaming
Association Class II Subcommittee
meetings. The consultations and
meetings, combined with the written
comments, proved invaluable in the
development of a discussion draft. On
June 14, 2017, the Commission issued a
discussion draft which, among other
proposed amendments, proposed
removing the November 10, 2018,
sunset for 2008 Systems. Additional
written comments responsive to the
discussion draft were solicited through
July 15, 2017.
Written comments received after the
issuance of the discussion draft were
generally supportive of the proposed
removal of the November 10, 2018,
sunset for 2008 Systems. Comments also
indicated, however, several specific
remaining areas of concern. The
Commission developed the proposed
rule after considering the comments
received.
A. General Comments
Some commenters questioned the
Commission’s authority to implement
technical standards and its authority to
enforce the standards. IGRA gives the
Commission the authority to adopt these
technical standards. Congress was
expressly concerned that gaming under
IGRA be ‘‘conducted fairly and honestly
by both the operator and players’’ and
‘‘to ensure that the Indian tribe is the
primary beneficiary of the gaming
operation.’’ 25 U.S.C. 2702(2). The
technical standards are designed to
ensure that these concerns are
addressed. These standards implement
the authority granted the NIGC to
monitor, inspect, and examine Class II
gaming, 25 U.S.C. 2706(b)(1)–(4), and to
promulgate such regulations as it deems
appropriate to implement the provisions
of IGRA. 25 U.S.C. 2706(b)(10). The
Commission further reiterates that this
rule does not classify games for
purposes of IGRA. The rule assumes
that the games played are Class II games.
This rule establishes a process for
ensuring the integrity and security of
Class II games and an accounting of
Class II revenue.
B. 2008 Systems, Pre-Discussion Draft
Many commenters requested that the
November 10, 2018, sunset for 2008
Systems be removed. Commenters
suggested that the existing sunset
provision could not be justified because
there has been no evidence that 2008
Systems represent a risk to the integrity
and security of Class II gaming.
Commenters noted that 2008 Systems
appear to be protected by 26 out of 28
technical standards identified by
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commenters as ‘‘high risk.’’ In addition,
commenters suggested that, even
assuming additional risks are associated
with 2008 Systems, such risks are
mitigated by tribal gaming regulatory
authorities (TGRAs) through internal
control standards.
The Commission agrees that the 2008
sunset can be removed. The
Commission disagrees, however, that
evidence of risk forms the sole legal
justification for the technical standards.
The technical standards are intended to
ensure the integrity and security of
Class II gaming and the accountability of
Class II gaming revenue. The technical
standards include minimum
requirements that the Commission
believes, in its judgment, are
appropriate and consistent with its
Federal regulatory oversight mission.
The Commission has, however,
determined that removal of the sunset
provision is justified provided that 2008
Systems are subject to additional annual
review by TGRAs.
Commenters also suggested that the
sunset provision threatens significant
economic harm and the continued
success and viability of the Class II
gaming industry. Commenters suggested
that the sunset provision is an
unnecessary cost burden on
manufacturers and tribes. Commenters
further suggested that the sunset
provision will cause tribes to lose
leverage in compact negotiations with
states.
The Commission understands the
commenters’ concerns over the
economic impact of removing noncompliant Class II gaming systems from
the gaming floor. The Commission
notes, however, that part 547 as
originally enacted and as amended only
requires removal if the games are not
made compliant with the testing
standards for newer systems set forth in
the regulation. The regulation initially
provided the industry with five years to
modify or replace 2008 Systems. The
Commission subsequently granted an
additional five years to bring the
systems into compliance with the
standards for newer systems. The
Commission has now determined that
removal of the sunset provision is
justified provided that 2008 Systems are
subject to additional annual review by
the TGRA.
Commenters suggested that the sunset
provision is retroactive and that IGRA
does not authorize the NIGC to
promulgate regulations that have
retroactive effect. The Commission
disagrees that the proposed
amendments are retroactive. The
proposed amendments do not alter the
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legal consequences of actions completed
before their effective date.
A commenter suggested extending the
sunset provision indefinitely, subject to
the authority of TGRAs. A commenter
submitted proposed language
implementing an annual audit
requirement for 2008 Systems. The
Commission’s subsequent discussion
draft partially incorporated this
recommendation.
C. 2008 Systems, Post-Discussion Draft
The discussion draft required TGRAs
to: ‘‘Annually review the Class II gaming
system, its current components, and the
associated testing laboratory reports to
determine whether the Class II gaming
system may be approved pursuant to
paragraph (b) of this section. The TGRA
shall make a finding identifying the
Class II gaming systems reviewed, the
Class II gaming systems subsequently
approved pursuant to paragraph (b),
and, for Class II gaming systems that
cannot be approved pursuant to
paragraph (b), the modifications
necessary for such approval. The TGRA
shall transmit its findings to the
Commission within 120 days of the
gaming operation’s fiscal year end.’’
Commenters suggested that the NIGC
has provided no compelling reason to
change the existing reporting
requirements. Commenters further
suggested that the annual reporting
requirement appears to be
unintentionally applicable to all Class II
gaming systems.
Although the requirement does
impose an additional requirement on
TGRAs, the Commission believes that
removal of the sunset provision
warrants annual review specific to 2008
Systems. In addition, the annual
reporting requirement is contained
within § 547.5(a) and is therefore
applicable only to 2008 Systems. The
Commission has, however, revised and
clarified the annual review and
reporting procedures in the proposed
rule to reduce the perceived burden on
TGRAs. Pursuant to this proposed rule,
TGRAs are not required to transmit its
findings, but rather must maintain
records and make them available to
NIGC staff upon request.
The discussion draft further provided
that ‘‘A TGRA may not permit the use
of any Class II gaming system
manufactured before November 10, 2008
in a tribal gaming operation unless:’’ it
meets requirements applicable to 2008
Systems. Discussion Draft § 547.5(a)(3)
provides that ‘‘If the Class II gaming
system is subsequently approved
pursuant to paragraph (b) of this section,
this paragraph (a) [2008 Systems] no
longer applies.’’ Commenters suggested
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that the Discussion Draft could be
misinterpreted to provide that all Class
II gaming systems manufactured prior to
November 10, 2008, including those that
are now compliant with § 547.5(b),
would be subject to the 2008 System
provisions in § 547.5(a). Commenters
further suggested that approving a 2008
System pursuant to § 547.5(b) requires a
2008 System to be resubmitted to a
testing lab for full re-certification and/
or requires TGRAs to make technical
determinations.
The Commission believes that
discussion draft § 547.5(a)(3) is clear
that Class II gaming systems approved
pursuant to § 547.5(b) are no longer
2008 Systems. The Commission has,
however, clarified in the proposed rule
that the use of the term ‘‘approved’’ is
intended to reference TGRA approval
based on review of existing testing lab
reports for all current components of the
Class II gaming system.
Finally, the discussion draft
Discussion Draft § 547.5(a)(1)(viii)
provides that ‘‘All player interfaces of
the Class II gaming system have a date
of manufacture before November 10,
2008.’’ Commenters suggested that the
requirement that all player interfaces of
2008 Systems have a date of
manufacture before November 10, 2008,
was a new requirement. Commenters
further suggested that this requirement
was unnecessary and would prevent use
of newer player interfaces with 2008
Systems, contrary to provisions
encouraging 2008 Systems to be
modified to move towards compliance
with standards for newer systems.
Although not included in the 2012
amendment to part 547, the date of
manufacture requirement is not entirely
new. The 2008 System provisions were
originally intended to apply only to
systems in play or manufactured by
November 10, 2008. 73 FR 60508,
60510. Pursuant to the 2008 regulations,
§ 547.4(a)(7) required ‘‘the supplier of
any player interface to designate with a
permanently affixed label each player
interface with an identifying number
and the date of manufacture or a
statement that the date of manufacture
was on or before the effective date of
this part. The tribal gaming regulatory
authority shall also require the supplier
to provide a written declaration or
affidavit affirming that the date of
manufacture was on or before November
10, 2008.’’ 73 FR 60508, 60527 (October
10, 2008). The Commission agrees,
however, that the date of manufacture
requirement included in the discussion
draft could be interpreted as preventing
the use of newer player interfaces and
has therefore removed the requirement
from the proposed rule.
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D. Class II Gaming System Component
Repair, Replacement, or Modification
Discussion draft § 547.5(c)(2)(ii)
provided that ‘‘The testing laboratory
tests the submission to the standards
established by: (A) This part; (B) Any
applicable provisions of part 543 of this
chapter that are testable by the testing
laboratory; and (C) The TGRA.’’
Commenters suggested that the new
requirement that modifications to 2008
Systems be tested to the standards
applicable to newer systems is
unnecessary and will only result in
additional costs with no practical
benefit. Commenters noted that
laboratory reports are currently not
required for all modifications to 2008
Systems, thereby providing TGRAs with
greater flexibility and control over such
modifications. Commenters suggested
that this provision will force TGRAs to
use the emergency modification
procedures to avoid testing delays.
The Commission disagrees that the
requirement that all modifications be
tested to the standards applicable to
newer systems is unnecessary. The
current and proposed regulations
require the TGRA to determine, among
other requirements, whether a
modification will maintain or advance
the Class II gaming system’s compliance
with the technical standards. The new
requirement ensures that TGRAs are
provided with the information needed
for the TGRA to make such a
determination. In addition, the
Commission believes that TGRAs will
continue to utilize the emergency
modification provisions for their
intended purpose.
E. Records
Discussion draft § 547.5(g) provided
that ‘‘The Commission may use the
information derived therefrom for any
lawful purpose including, without
limitation, to monitor the use of Class II
gaming systems, to assess the
effectiveness of the standards required
by this Part, and to inform future
amendments to this Part. The
Commission will only make available
for public review records or portions of
records subject to release under the
Freedom of Information Act, 5 U.S.C.
552; the Privacy Act of 1974, 5 U.S.C.
552a; or the Indian Gaming Regulatory
Act, 25 U.S.C. 2716(a).’’ Commenters
expressed reluctance to expose sensitive
testing and compliance records to
possible public disclosure. Commenters
suggested that records only be available
for review on site by NIGC staff.
The Commission agrees that sensitive
testing and compliance records should
not be disclosed. As cited in the
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discussion draft, 25 U.S.C. 2716(a) states
that ‘‘the Commission shall preserve any
and all information received pursuant to
this chapter as confidential pursuant to’’
the confidential commercial or financial
information and law enforcement
information exceptions of the Freedom
of Information Act. The Commission is
therefore precluded from releasing such
information.
Regulatory Matters
Regulatory Flexibility Act
The proposed rule will not have a
significant impact on a substantial
number of small entities as defined
under the Regulatory Flexibility Act, 5
U.S.C. 601, et seq. Moreover, Indian
Tribes are not considered to be small
entities for the purposes of the
Regulatory Flexibility Act.
Small Business Regulatory Enforcement
Fairness Act
The proposed rule is not a major rule
under 5 U.S.C. 804(2), the Small
Business Regulatory Enforcement
Fairness Act. The rule does not have an
effect on the economy of $100 million
or more. The rule will not cause a major
increase in costs or prices for
consumers, individual industries,
Federal, State, local government
agencies or geographic regions. Nor will
the proposed rule have a significant
adverse effect on competition,
employment, investment, productivity,
innovation, or the ability of the
enterprises, to compete with foreign
based enterprises.
Unfunded Mandate Reform Act
The Commission, as an independent
regulatory agency, is exempt from
compliance with the Unfunded
Mandates Reform Act, 2 U.S.C. 1502(1);
2 U.S.C. 658(1).
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Takings
In accordance with Executive Order
12630, the Commission has determined
that the proposed rule does not have
significant takings implications. A
takings implication assessment is not
required.
Civil Justice Reform
In accordance with Executive Order
12988, the Commission has determined
that the proposed rule does not unduly
burden the judicial system and meets
the requirements of section 3(a) and
3(b)(2) of the Order.
National Environmental Policy Act
The Commission has determined that
the proposed rule does not constitute a
major federal action significantly
affecting the quality of the human
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environment and that no detailed
statement is required pursuant to the
National Environmental Policy Act of
1969, 42 U.S.C. 4321, et seq.
Paperwork Reduction Act
The information collection
requirements contained in this rule
were previously approved by the Office
of Management and Budget (OMB) as
required by 44 U.S.C. 3501 et seq. and
assigned OMB Control Number 3141–
0007, which expired in August of 2011.
The NIGC is in the process of reinstating
that Control Number.
List of Subjects in 25 CFR Part 547
Gambling, Indian—lands, Indian—
tribal government, Reporting and
recordkeeping requirements.
Therefore, for reasons stated in the
preamble, 25 CFR part 547 is proposed
to be amended as follows:
PART 547—MINIMUM TECHNICAL
STANDARDS FOR CLASS II GAMING
SYSTEMS AND EQUIPMENT
1. The authority citation for part 547
continues to read as follows:
■
Authority: 25 U.S.C. 2706(b).
■
2. Revise § 547.5 to read as follows:
§ 547.5 How does a tribal government,
TGRA, or tribal gaming operation comply
with this part?
(a) Gaming systems manufactured
before November 10, 2008. (1) Any Class
II gaming system manufactured before
November 10, 2008, that is not
compliant with paragraph (b) of this
section may be made available for use
at any tribal gaming operation if:
(i) The Class II gaming system
software that affects the play of the
Class II game, together with the
signature verification required by
§ 547.8(f) was submitted to a testing
laboratory within 120 days after
November 10, 2008, or October 22,
2012;
(ii) The testing laboratory tested the
submission to the standards established
by § 547.8(b), § 547.8(f), and § 547.14;
(iii) The testing laboratory provided
the TGRA with a formal written report
setting forth and certifying to the
findings and conclusions of the test;
(iv) The TGRA made a finding, in the
form of a certificate provided to the
supplier or manufacturer of the Class II
gaming system, that the Class II gaming
system is compliant with § 547.8(b),
§ 547.8(f), and § 547.14;
(v) The Class II gaming system is only
used as approved by the TGRA and the
TGRA transmitted its notice of that
approval, identifying the Class II gaming
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system and its components, to the
Commission;
(vi) Remote communications with the
Class II gaming system are only allowed
if authorized by the TGRA; and
(vii) Player interfaces of the Class II
gaming system exhibit information
consistent with § 547.7(d) and any other
information required by the TGRA.
(2) For so long as a Class II gaming
system is made available for use at any
tribal gaming operation pursuant to this
paragraph (a) the TGRA shall:
(i) Retain copies of the testing
laboratory’s report, the TGRA’s
compliance certificate, and the TGRA’s
approval of the use of the Class II
gaming system;
(ii) Maintain records identifying the
Class II gaming system and its current
components; and
(iii) Annually review the testing
laboratory reports associated with the
Class II gaming system and its current
components to determine whether the
Class II gaming system may be approved
pursuant to paragraph (b)(1)(v) of this
section. The TGRA shall make a finding
identifying the Class II gaming systems
reviewed, the Class II gaming systems
subsequently approved pursuant to
paragraph (b)(1)(v), and, for Class II
gaming systems that cannot be approved
pursuant to paragraph (b)(1)(v), the
components of the Class II gaming
system preventing such approval.
(3) If the Class II gaming system is
subsequently approved by the TGRA
pursuant to paragraph (b)(1)(v) as
compliant with paragraph (b) of this
section, this paragraph (a) no longer
applies.
(b) Gaming system submission,
testing, and approval—generally. (1)
Except as provided in paragraph (a) of
this section, a TGRA may not permit the
use of any Class II gaming system in a
tribal gaming operation unless:
(i) The Class II gaming system has
been submitted to a testing laboratory;
(ii) The testing laboratory tests the
submission to the standards established
by:
(A) This part;
(B) Any applicable provisions of part
543 of this chapter that are testable by
the testing laboratory; and
(C) The TGRA;
(iii) The testing laboratory provides a
formal written report to the party
making the submission, setting forth
and certifying its findings and
conclusions, and noting compliance
with any standard established by the
TGRA pursuant to paragraph (b)(1)(ii)(C)
of this section;
(iv) The testing laboratory’s written
report confirms that the operation of a
player interface prototype has been
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certified that it will not be compromised
or affected by electrostatic discharge,
liquid spills, electromagnetic
interference, or any other tests required
by the TGRA;
(v) Following receipt of the testing
laboratory’s report, the TGRA makes a
finding that the Class II gaming system
conforms to the standards established
by:
(A) This part;
(B) Any applicable provisions of part
543 of this chapter that are testable by
the testing laboratory; and
(C) The TGRA.
(2) For so long as a Class II gaming
system is made available for use at any
tribal gaming operation pursuant to this
paragraph (b) the TGRA shall:
(i) Retain a copy of the testing
laboratory’s report; and
(ii) Maintain records identifying the
Class II gaming system and its current
components.
(c) Class II gaming system component
repair, replacement, or modification. (1)
As permitted by the TGRA, individual
hardware or software components of a
Class II gaming system may be repaired
or replaced to ensure proper
functioning, security, or integrity of the
Class II gaming system.
(2) A TGRA may not permit the
modification of any Class II gaming
system in a tribal gaming operation
unless:
(i) The Class II gaming system
modification has been submitted to a
testing laboratory;
(ii) The testing laboratory tests the
submission to the standards established
by:
(A) This part;
(B) Any applicable provisions of part
543 of this chapter that are testable by
the testing laboratory; and
(C) The TGRA;
(iii) The testing laboratory provides a
formal written report to the party
making the submission, setting forth
and certifying its findings and
conclusions, and noting compliance
with any standard established by the
TGRA pursuant to paragraph (c)(2)(ii)(C)
of this section;
(iv) Following receipt of the testing
laboratory’s report, the TGRA makes a
finding that the:
(A) The modification will maintain or
advance the Class II gaming system’s
compliance with this part and any
applicable provisions of part 543 of this
chapter; and
(B) The modification will not detract
from, compromise or prejudice the
proper functioning, security, or integrity
of the Class II gaming system;
(3) If a TGRA authorizes a component
modification under this paragraph, it
VerDate Sep<11>2014
15:00 Sep 27, 2017
Jkt 241001
must maintain a record of the
modification and a copy of the testing
laboratory report so long as the Class II
gaming system that is the subject of the
modification remains available to the
public for play.
(d) Emergency Class II gaming system
component modifications. (1) A TGRA,
in its discretion, may permit the
modification of previously approved
components to be made available for
play without prior laboratory testing or
review if the modified hardware or
software is:
(i) Necessary to correct a problem
affecting the fairness, security, or
integrity of a game or accounting system
or any cashless system, or voucher
system; or
(ii) Unrelated to game play, an
accounting system, a cashless system, or
a voucher system.
(2) If a TGRA authorizes modified
components to be made available for
play or use without prior testing
laboratory review, the TGRA must
thereafter require the hardware or
software manufacturer to:
(i) Immediately advise other users of
the same components of the importance
and availability of the update;
(ii) Immediately submit the new or
modified components to a testing
laboratory for testing and verification of
compliance with this part and any
applicable provisions of part 543 of this
chapter that are testable by the testing
laboratory; and
(iii) Immediately provide the TGRA
with a software signature verification
tool meeting the requirements of
§ 547.8(f) for any new or modified
software component.
(3) If a TGRA authorizes a component
modification under this paragraph, it
must maintain a record of the
modification and a copy of the testing
laboratory report so long as the Class II
gaming system that is the subject of the
modification remains available to the
public for play.
(e) Compliance by charitable gaming
operations. This part does not apply to
charitable gaming operations, provided
that:
(1) The tribal government determines
that the organization sponsoring the
gaming operation is a charitable
organization;
(2) All proceeds of the charitable
gaming operation are for the benefit of
the charitable organization;
(3) The TGRA permits the charitable
organization to be exempt from this
part;
(4) The charitable gaming operation is
operated wholly by the charitable
organization’s employees or volunteers;
and
PO 00000
Frm 00025
Fmt 4702
Sfmt 4702
(5) The annual gross gaming revenue
of the charitable gaming operation does
not exceed $3,000,000.
(f) Testing laboratories. (1) A testing
laboratory may provide the
examination, testing, evaluating and
reporting functions required by this
section provided that:
(i) It demonstrates its integrity,
independence and financial stability to
the TGRA.
(ii) It demonstrates its technical skill
and capability to the TGRA.
(iii) If the testing laboratory is owned
or operated by, or affiliated with, a tribe,
it must be independent from the
manufacturer and gaming operator for
whom it is providing the testing,
evaluating, and reporting functions
required by this section.
(iv) The TGRA:
(A) Makes a suitability determination
of the testing laboratory based upon
standards no less stringent than those
set out in § 533.6(b)(1)(ii) through (v) of
this chapter and based upon no less
information than that required by
§ 537.1 of this chapter, or
(B) Accepts, in its discretion, a
determination of suitability for the
testing laboratory made by any other
gaming regulatory authority in the
United States.
(v) After reviewing the suitability
determination and the information
provided by the testing laboratory, the
TGRA determines that the testing
laboratory is qualified to test and
evaluate Class II gaming systems.
(2) The TGRA must:
(i) Maintain a record of all
determinations made pursuant to
paragraphs (f)(1)(iii) and (f)(1)(iv) of this
section for a minimum of three years.
(ii) Place the testing laboratory under
a continuing obligation to notify it of
any adverse regulatory action in any
jurisdiction where the testing laboratory
conducts business.
(iii) Require the testing laboratory to
provide notice of any material changes
to the information provided to the
TGRA.
(g) Records. Records required to be
maintained under this section must be
made available to the Commission upon
request. The Commission may use the
information derived therefrom for any
lawful purpose including, without
limitation, to monitor the use of Class II
gaming systems, to assess the
effectiveness of the standards required
by this part, and to inform future
amendments to this part. The
Commission will only make available
for public review records or portions of
records subject to release under the
Freedom of Information Act, 5 U.S.C.
552; the Privacy Act of 1974, 5 U.S.C.
E:\FR\FM\28SEP1.SGM
28SEP1
Federal Register / Vol. 82, No. 187 / Thursday, September 28, 2017 / Proposed Rules
552a; or the Indian Gaming Regulatory
Act, 25 U.S.C. 2716(a).
Dated: September 19, 2017.
Jonodev O. Chaudhuri,
Chairman.
Kathryn Isom-Clause,
Vice Chair.
E. Sequoyah Simermeyer,
Associate Commissioner.
[FR Doc. 2017–20635 Filed 9–27–17; 8:45 am]
Paperwork Reduction Act
BILLING CODE 7565–01–P
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Parts 1 and 5f
[REG–128841–07]
RIN 1545–BG91
Public Approval of Tax-Exempt Private
Activity Bonds
Internal Revenue Service (IRS),
Treasury.
ACTION: Withdrawal of notice of
proposed rulemaking and notice of
proposed rulemaking.
AGENCY:
This document contains
proposed regulations to update and
streamline the public approval
requirement provided in section 147(f)
of the Internal Revenue Code applicable
to tax-exempt private activity bonds
issued by State and local governments.
The proposed regulations would update
the existing regulations on the public
approval requirement to reflect statutory
changes, to streamline the public
approval process, and to reduce burden
on State and local governments that
issue tax-exempt private activity bonds.
This document also withdraws two
previous notices of proposed
rulemaking on this topic. The proposed
regulations affect State and local
governments that issue tax-exempt
private activity bonds.
DATES: Comments and requests for a
public hearing must be received by
December 27, 2017.
ADDRESSES: Send submissions to
CC:PA:LPD:PR (REG–128841–07), Room
5203, Internal Revenue Service, P.O.
Box 7604, Ben Franklin Station,
Washington, DC 20044. Submissions
may be hand-delivered Monday through
Friday between the hours of 8 a.m. and
4 p.m. to CC:PA:LPD:PR (REG–128841–
07), Courier’s Desk, Internal Revenue
Service, 1111 Constitution Avenue NW.,
Washington, DC 20224, or sent
electronically via the Federal
eRulemaking Portal at
jstallworth on DSKBBY8HB2PROD with PROPOSALS
SUMMARY:
VerDate Sep<11>2014
15:00 Sep 27, 2017
www.regulations.gov (IRS REG–128841–
07).
FOR FURTHER INFORMATION CONTACT:
Concerning the proposed regulations,
Spence Hanemann at (202) 317–6980;
concerning submissions of comments
and requesting a hearing, Regina
Johnson at (202) 317–6901 (not toll-free
numbers).
SUPPLEMENTARY INFORMATION:
Jkt 241001
The collection of information
contained in this notice of proposed
rulemaking has been submitted to the
Office of Management and Budget for
review under OMB Control Number
1545–2185 in accordance with the
Paperwork Reduction Act of 1995 (44
U.S.C. 3507(d)). The collection of
information in this proposed regulation
is the requirement in § 1.147(f)–1 that
certain information be contained in a
public notice or public approval and,
consequently, disclosed to the public.
This information is required to meet the
statutory public approval requirement
provided in section 147(f). The likely
respondents are the governmental units
required to approve an issue of private
activity bonds under section 147(f).
Estimated total annual burden: 2,600
hours.
Estimated average annual burden per
respondent: 1.3 Hours.
Estimated number of respondents:
2,000.
Estimated frequency of responses:
Annual.
Comments on the collection of
information should be sent to the Office
of Management and Budget, Attn: Desk
Officer for the Department of the
Treasury, Office of Information and
Regulatory Affairs, Washington, DC
20503, with copies to the Internal
Revenue Service, Attn: IRS Reports
Clearance Officer, SE:CAR:MP:T:T:SP,
Washington, DC 20224. Comments on
the collection of information should be
received by November 27, 2017.
Comments are specifically requested
concerning:
Whether the proposed collection of
information is necessary for the proper
performance of the functions of the IRS,
including whether the information will
have practical utility;
The accuracy of the estimated burden
associated with the proposed collection
of information;
How the quality, utility, and clarity of
the information to be collected may be
enhanced;
How the burden of complying with
the proposed collection of information
may be minimized, including through
the application of automated collection
PO 00000
Frm 00026
Fmt 4702
Sfmt 4702
45233
techniques or other forms of information
technology; and
Estimates of capital or start-up costs
and costs of operation, maintenance,
and purchase of services to provide
information.
An agency may not conduct or
sponsor, and a person is not required to
respond to, a collection of information
unless it displays a valid control
number assigned by the Office of
Management and Budget.
Books or records relating to a
collection of information must be
retained as long as their contents may
become material in the administration
of any internal revenue law. Generally,
tax returns and tax return information
are confidential, as required by 26
U.S.C. 6103.
Background
This document contains proposed
amendments to 26 CFR part 1 under
section 147(f) of the Internal Revenue
Code of 1986 (the Code) and 26 CFR
part 5f under section 103(k) of the
Internal Revenue Code of 1954 (the 1954
Code). In the Tax Equity and Fiscal
Responsibility Act of 1982 (TEFRA),
Public Law 97–248, 96 Stat. 324,
Congress added section 103(k) to the
1954 Code to impose a public approval
requirement on tax-exempt industrial
development bonds. On May 11, 1983,
the Department of the Treasury
(Treasury Department) and the IRS
published in the Federal Register (48
FR 21117) temporary regulations under
section 103(k) of the 1954 Code (TD
7892) (the Existing Regulations). See
§ 5f.103–2. A notice of proposed
rulemaking (LR–221–82) by crossreference to the temporary regulations
was published in the Federal Register
(48 FR 21166) on the same day.
In the Tax Reform Act of 1986 (1986
Tax Act), Public Law 99–514, 100 Stat.
2085, Congress reorganized the taxexempt bond provisions and carried
forward the public approval
requirement of section 103(k) of the
1954 Code in expanded form in section
147(f) of the Code. In section 147(f),
Congress extended the public approval
requirement to apply to all types of taxexempt private activity bonds, as
provided in section 141(e). The
legislative history of the 1986 Tax Act
indicates that ‘‘[t]he conferees intend
that, to the extent not amended, all
principles of present law continue to
apply under the reorganized
provisions.’’ H.R. Rep. No. 99–841, at II–
686 (1986) (Conf. Rep.). Thus, the
Existing Regulations in § 5f.103–2
remain in effect.
On September 9, 2008, the Treasury
Department and the IRS published a
E:\FR\FM\28SEP1.SGM
28SEP1
]]>Agencies
[Federal Register Volume 82, Number 187 (Thursday, September 28, 2017)]
[Proposed Rules]
[Pages 45228-45233]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-20635]
=======================================================================
-----------------------------------------------------------------------
NATIONAL INDIAN GAMING COMMISSION
25 CFR Part 547
RIN 3141-AA64
Technical Standards
AGENCY: National Indian Gaming Commission.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: The National Indian Gaming Commission proposes to amend the
minimum technical standards for Class II gaming systems and equipment.
The proposed rule would amend regulations that describe how tribal
governments, tribal gaming regulatory authorities, and tribal gaming
operations comply with the technical standards. In particular, the
proposed rule amends the requirement that gaming systems manufactured
before November 10, 2008, be modified to meet standards applicable to
gaming systems manufactured on or after November 10, 2008, or be
removed from the gaming floor by November 10, 2018. The Commission
proposes this action to assist tribal governments, tribal gaming
regulatory authorities, and operations in ensuring the integrity and
security of Class II games and gaming revenue through minimum technical
standards for Class II gaming systems and equipment.
DATES: The agency must receive comments on or before November 13, 2017.
ADDRESSES: You may send comments by any of the following methods:
Federal eRulemaking Portal: Go to https://www.regulations.gov. Follow the instructions for submitting comments.
Email: 547.5_Comments@nigc.gov.
Fax: 202-632-7066.
Mail: National Indian Gaming Commission, 1849 C Street
NW., MS 1621, Washington, DC 20240.
Hand Delivery: National Indian Gaming Commission, 90 K
Street NE., Suite 200, Washington, DC 20002, between 9 a.m. and 5 p.m.,
Monday through Friday, except Federal holidays.
FOR FURTHER INFORMATION CONTACT: Austin Badger, National Indian Gaming
Commission; Telephone: 202-632-7003.
SUPPLEMENTARY INFORMATION:
I. Comments Invited
Interested parties are invited to participate in this proposed
rulemaking by submitting such written data, views, or arguments as they
may desire. Comments that provide the factual basis supporting the
views and suggestions presented are particularly helpful in developing
reasoned regulatory decisions on the proposal.
II. Background
The Indian Gaming Regulatory Act (IGRA or Act), Public Law 100-497,
25 U.S.C. 2701 et seq., was signed into law on October 17, 1988. The
Act establishes the National Indian Gaming Commission (NIGC or
Commission) and sets out a comprehensive framework for the regulation
of gaming on Indian lands. On October 8, 2008, the NIGC published a
final rule in the Federal Register called Technical Standards for
Electronic, Computer, or Other Technologic Aids Used in the Play of
Class II Games. 73 FR 60508. The rule added a new part to the NIGC's
regulations establishing a process for ensuring the integrity of
electronic Class II games and aids. The standards were designed to
assist tribal gaming regulatory authorities and operators with ensuring
the integrity and security of Class II gaming, the accountability of
Class II gaming revenue, and provide guidance to equipment
manufacturers
[[Page 45229]]
and distributors of Class II gaming systems. The standards do not
classify which games are class II and which games are class III.
When implemented in 2008, the part 547 technical standards
introduced several new requirements for Class II gaming systems
designed to protect the security and integrity of Class II gaming
systems and tribal operations. The Commission understood, however, that
some existing Class II gaming systems might not meet all of the
requirements of the technical standards. Therefore, to avoid any
potentially significant economic and practical consequences of
requiring immediate compliance, the Commission implemented a five year
sunset provision which allowed eligible gaming systems manufactured
before November 10, 2008 (2008 Systems) to remain on the gaming floor.
The Commission believed that a five year period was sufficient for
market forces to move equipment toward compliance with the standards
applicable to gaming systems manufactured on or after November 10,
2008.
On September 21, 2012, the NIGC published a final rule in the
Federal Register which included an amendment delaying the sunset
provision by an additional five years. 77 FR 58473. The Commission
recognized that its prior analysis regarding the continued economic
viability of the 2008 Systems had proven to be mistaken. The NIGC
established the initial five year period in the midst of a much
stronger economy. In the time that followed the economic downturn, many
tribal gaming operations set new priorities that required keeping a
2008 System on the gaming floor for a longer period of time. Balancing
the economic needs against a risk that potentially increases as
technology advances and 2008 Systems remain static, the Commission
determined that 2008 Systems could continue to be offered for play
until November 10, 2018.
Now, with the November 10, 2018, sunset approaching, the Commission
believed it appropriate to include the 2008 Systems and associated
sunset provision of the part 547 technical standards as a topic for
consultation. The topic was therefore included in a November 22, 2016,
letter to tribal leaders introducing the Commission's 2017 consultation
series.
III. Development of the Proposed Rule
On March 23, 2017, in Tulsa, OK, and April 12, 2017, in San Diego,
CA, the NIGC consulted on the 2008 Systems and associated sunset
provision of part 547. The Commission also solicited written comments
through May 31, 2017. In addition, NIGC staff attended several National
Indian Gaming Association Class II Subcommittee meetings. The
consultations and meetings, combined with the written comments, proved
invaluable in the development of a discussion draft. On June 14, 2017,
the Commission issued a discussion draft which, among other proposed
amendments, proposed removing the November 10, 2018, sunset for 2008
Systems. Additional written comments responsive to the discussion draft
were solicited through July 15, 2017.
Written comments received after the issuance of the discussion
draft were generally supportive of the proposed removal of the November
10, 2018, sunset for 2008 Systems. Comments also indicated, however,
several specific remaining areas of concern. The Commission developed
the proposed rule after considering the comments received.
A. General Comments
Some commenters questioned the Commission's authority to implement
technical standards and its authority to enforce the standards. IGRA
gives the Commission the authority to adopt these technical standards.
Congress was expressly concerned that gaming under IGRA be ``conducted
fairly and honestly by both the operator and players'' and ``to ensure
that the Indian tribe is the primary beneficiary of the gaming
operation.'' 25 U.S.C. 2702(2). The technical standards are designed to
ensure that these concerns are addressed. These standards implement the
authority granted the NIGC to monitor, inspect, and examine Class II
gaming, 25 U.S.C. 2706(b)(1)-(4), and to promulgate such regulations as
it deems appropriate to implement the provisions of IGRA. 25 U.S.C.
2706(b)(10). The Commission further reiterates that this rule does not
classify games for purposes of IGRA. The rule assumes that the games
played are Class II games. This rule establishes a process for ensuring
the integrity and security of Class II games and an accounting of Class
II revenue.
B. 2008 Systems, Pre-Discussion Draft
Many commenters requested that the November 10, 2018, sunset for
2008 Systems be removed. Commenters suggested that the existing sunset
provision could not be justified because there has been no evidence
that 2008 Systems represent a risk to the integrity and security of
Class II gaming. Commenters noted that 2008 Systems appear to be
protected by 26 out of 28 technical standards identified by commenters
as ``high risk.'' In addition, commenters suggested that, even assuming
additional risks are associated with 2008 Systems, such risks are
mitigated by tribal gaming regulatory authorities (TGRAs) through
internal control standards.
The Commission agrees that the 2008 sunset can be removed. The
Commission disagrees, however, that evidence of risk forms the sole
legal justification for the technical standards. The technical
standards are intended to ensure the integrity and security of Class II
gaming and the accountability of Class II gaming revenue. The technical
standards include minimum requirements that the Commission believes, in
its judgment, are appropriate and consistent with its Federal
regulatory oversight mission. The Commission has, however, determined
that removal of the sunset provision is justified provided that 2008
Systems are subject to additional annual review by TGRAs.
Commenters also suggested that the sunset provision threatens
significant economic harm and the continued success and viability of
the Class II gaming industry. Commenters suggested that the sunset
provision is an unnecessary cost burden on manufacturers and tribes.
Commenters further suggested that the sunset provision will cause
tribes to lose leverage in compact negotiations with states.
The Commission understands the commenters' concerns over the
economic impact of removing non-compliant Class II gaming systems from
the gaming floor. The Commission notes, however, that part 547 as
originally enacted and as amended only requires removal if the games
are not made compliant with the testing standards for newer systems set
forth in the regulation. The regulation initially provided the industry
with five years to modify or replace 2008 Systems. The Commission
subsequently granted an additional five years to bring the systems into
compliance with the standards for newer systems. The Commission has now
determined that removal of the sunset provision is justified provided
that 2008 Systems are subject to additional annual review by the TGRA.
Commenters suggested that the sunset provision is retroactive and
that IGRA does not authorize the NIGC to promulgate regulations that
have retroactive effect. The Commission disagrees that the proposed
amendments are retroactive. The proposed amendments do not alter the
[[Page 45230]]
legal consequences of actions completed before their effective date.
A commenter suggested extending the sunset provision indefinitely,
subject to the authority of TGRAs. A commenter submitted proposed
language implementing an annual audit requirement for 2008 Systems. The
Commission's subsequent discussion draft partially incorporated this
recommendation.
C. 2008 Systems, Post-Discussion Draft
The discussion draft required TGRAs to: ``Annually review the Class
II gaming system, its current components, and the associated testing
laboratory reports to determine whether the Class II gaming system may
be approved pursuant to paragraph (b) of this section. The TGRA shall
make a finding identifying the Class II gaming systems reviewed, the
Class II gaming systems subsequently approved pursuant to paragraph
(b), and, for Class II gaming systems that cannot be approved pursuant
to paragraph (b), the modifications necessary for such approval. The
TGRA shall transmit its findings to the Commission within 120 days of
the gaming operation's fiscal year end.'' Commenters suggested that the
NIGC has provided no compelling reason to change the existing reporting
requirements. Commenters further suggested that the annual reporting
requirement appears to be unintentionally applicable to all Class II
gaming systems.
Although the requirement does impose an additional requirement on
TGRAs, the Commission believes that removal of the sunset provision
warrants annual review specific to 2008 Systems. In addition, the
annual reporting requirement is contained within Sec. 547.5(a) and is
therefore applicable only to 2008 Systems. The Commission has, however,
revised and clarified the annual review and reporting procedures in the
proposed rule to reduce the perceived burden on TGRAs. Pursuant to this
proposed rule, TGRAs are not required to transmit its findings, but
rather must maintain records and make them available to NIGC staff upon
request.
The discussion draft further provided that ``A TGRA may not permit
the use of any Class II gaming system manufactured before November 10,
2008 in a tribal gaming operation unless:'' it meets requirements
applicable to 2008 Systems. Discussion Draft Sec. 547.5(a)(3) provides
that ``If the Class II gaming system is subsequently approved pursuant
to paragraph (b) of this section, this paragraph (a) [2008 Systems] no
longer applies.'' Commenters suggested that the Discussion Draft could
be misinterpreted to provide that all Class II gaming systems
manufactured prior to November 10, 2008, including those that are now
compliant with Sec. 547.5(b), would be subject to the 2008 System
provisions in Sec. 547.5(a). Commenters further suggested that
approving a 2008 System pursuant to Sec. 547.5(b) requires a 2008
System to be resubmitted to a testing lab for full re-certification
and/or requires TGRAs to make technical determinations.
The Commission believes that discussion draft Sec. 547.5(a)(3) is
clear that Class II gaming systems approved pursuant to Sec. 547.5(b)
are no longer 2008 Systems. The Commission has, however, clarified in
the proposed rule that the use of the term ``approved'' is intended to
reference TGRA approval based on review of existing testing lab reports
for all current components of the Class II gaming system.
Finally, the discussion draft Discussion Draft Sec.
547.5(a)(1)(viii) provides that ``All player interfaces of the Class II
gaming system have a date of manufacture before November 10, 2008.''
Commenters suggested that the requirement that all player interfaces of
2008 Systems have a date of manufacture before November 10, 2008, was a
new requirement. Commenters further suggested that this requirement was
unnecessary and would prevent use of newer player interfaces with 2008
Systems, contrary to provisions encouraging 2008 Systems to be modified
to move towards compliance with standards for newer systems.
Although not included in the 2012 amendment to part 547, the date
of manufacture requirement is not entirely new. The 2008 System
provisions were originally intended to apply only to systems in play or
manufactured by November 10, 2008. 73 FR 60508, 60510. Pursuant to the
2008 regulations, Sec. 547.4(a)(7) required ``the supplier of any
player interface to designate with a permanently affixed label each
player interface with an identifying number and the date of manufacture
or a statement that the date of manufacture was on or before the
effective date of this part. The tribal gaming regulatory authority
shall also require the supplier to provide a written declaration or
affidavit affirming that the date of manufacture was on or before
November 10, 2008.'' 73 FR 60508, 60527 (October 10, 2008). The
Commission agrees, however, that the date of manufacture requirement
included in the discussion draft could be interpreted as preventing the
use of newer player interfaces and has therefore removed the
requirement from the proposed rule.
D. Class II Gaming System Component Repair, Replacement, or
Modification
Discussion draft Sec. 547.5(c)(2)(ii) provided that ``The testing
laboratory tests the submission to the standards established by: (A)
This part; (B) Any applicable provisions of part 543 of this chapter
that are testable by the testing laboratory; and (C) The TGRA.''
Commenters suggested that the new requirement that modifications to
2008 Systems be tested to the standards applicable to newer systems is
unnecessary and will only result in additional costs with no practical
benefit. Commenters noted that laboratory reports are currently not
required for all modifications to 2008 Systems, thereby providing TGRAs
with greater flexibility and control over such modifications.
Commenters suggested that this provision will force TGRAs to use the
emergency modification procedures to avoid testing delays.
The Commission disagrees that the requirement that all
modifications be tested to the standards applicable to newer systems is
unnecessary. The current and proposed regulations require the TGRA to
determine, among other requirements, whether a modification will
maintain or advance the Class II gaming system's compliance with the
technical standards. The new requirement ensures that TGRAs are
provided with the information needed for the TGRA to make such a
determination. In addition, the Commission believes that TGRAs will
continue to utilize the emergency modification provisions for their
intended purpose.
E. Records
Discussion draft Sec. 547.5(g) provided that ``The Commission may
use the information derived therefrom for any lawful purpose including,
without limitation, to monitor the use of Class II gaming systems, to
assess the effectiveness of the standards required by this Part, and to
inform future amendments to this Part. The Commission will only make
available for public review records or portions of records subject to
release under the Freedom of Information Act, 5 U.S.C. 552; the Privacy
Act of 1974, 5 U.S.C. 552a; or the Indian Gaming Regulatory Act, 25
U.S.C. 2716(a).'' Commenters expressed reluctance to expose sensitive
testing and compliance records to possible public disclosure.
Commenters suggested that records only be available for review on site
by NIGC staff.
The Commission agrees that sensitive testing and compliance records
should not be disclosed. As cited in the
[[Page 45231]]
discussion draft, 25 U.S.C. 2716(a) states that ``the Commission shall
preserve any and all information received pursuant to this chapter as
confidential pursuant to'' the confidential commercial or financial
information and law enforcement information exceptions of the Freedom
of Information Act. The Commission is therefore precluded from
releasing such information.
Regulatory Matters
Regulatory Flexibility Act
The proposed rule will not have a significant impact on a
substantial number of small entities as defined under the Regulatory
Flexibility Act, 5 U.S.C. 601, et seq. Moreover, Indian Tribes are not
considered to be small entities for the purposes of the Regulatory
Flexibility Act.
Small Business Regulatory Enforcement Fairness Act
The proposed rule is not a major rule under 5 U.S.C. 804(2), the
Small Business Regulatory Enforcement Fairness Act. The rule does not
have an effect on the economy of $100 million or more. The rule will
not cause a major increase in costs or prices for consumers, individual
industries, Federal, State, local government agencies or geographic
regions. Nor will the proposed rule have a significant adverse effect
on competition, employment, investment, productivity, innovation, or
the ability of the enterprises, to compete with foreign based
enterprises.
Unfunded Mandate Reform Act
The Commission, as an independent regulatory agency, is exempt from
compliance with the Unfunded Mandates Reform Act, 2 U.S.C. 1502(1); 2
U.S.C. 658(1).
Takings
In accordance with Executive Order 12630, the Commission has
determined that the proposed rule does not have significant takings
implications. A takings implication assessment is not required.
Civil Justice Reform
In accordance with Executive Order 12988, the Commission has
determined that the proposed rule does not unduly burden the judicial
system and meets the requirements of section 3(a) and 3(b)(2) of the
Order.
National Environmental Policy Act
The Commission has determined that the proposed rule does not
constitute a major federal action significantly affecting the quality
of the human environment and that no detailed statement is required
pursuant to the National Environmental Policy Act of 1969, 42 U.S.C.
4321, et seq.
Paperwork Reduction Act
The information collection requirements contained in this rule were
previously approved by the Office of Management and Budget (OMB) as
required by 44 U.S.C. 3501 et seq. and assigned OMB Control Number
3141- 0007, which expired in August of 2011. The NIGC is in the process
of reinstating that Control Number.
List of Subjects in 25 CFR Part 547
Gambling, Indian--lands, Indian--tribal government, Reporting and
recordkeeping requirements.
Therefore, for reasons stated in the preamble, 25 CFR part 547 is
proposed to be amended as follows:
PART 547--MINIMUM TECHNICAL STANDARDS FOR CLASS II GAMING SYSTEMS
AND EQUIPMENT
0
1. The authority citation for part 547 continues to read as follows:
Authority: 25 U.S.C. 2706(b).
0
2. Revise Sec. 547.5 to read as follows:
Sec. 547.5 How does a tribal government, TGRA, or tribal gaming
operation comply with this part?
(a) Gaming systems manufactured before November 10, 2008. (1) Any
Class II gaming system manufactured before November 10, 2008, that is
not compliant with paragraph (b) of this section may be made available
for use at any tribal gaming operation if:
(i) The Class II gaming system software that affects the play of
the Class II game, together with the signature verification required by
Sec. 547.8(f) was submitted to a testing laboratory within 120 days
after November 10, 2008, or October 22, 2012;
(ii) The testing laboratory tested the submission to the standards
established by Sec. 547.8(b), Sec. 547.8(f), and Sec. 547.14;
(iii) The testing laboratory provided the TGRA with a formal
written report setting forth and certifying to the findings and
conclusions of the test;
(iv) The TGRA made a finding, in the form of a certificate provided
to the supplier or manufacturer of the Class II gaming system, that the
Class II gaming system is compliant with Sec. 547.8(b), Sec.
547.8(f), and Sec. 547.14;
(v) The Class II gaming system is only used as approved by the TGRA
and the TGRA transmitted its notice of that approval, identifying the
Class II gaming system and its components, to the Commission;
(vi) Remote communications with the Class II gaming system are only
allowed if authorized by the TGRA; and
(vii) Player interfaces of the Class II gaming system exhibit
information consistent with Sec. 547.7(d) and any other information
required by the TGRA.
(2) For so long as a Class II gaming system is made available for
use at any tribal gaming operation pursuant to this paragraph (a) the
TGRA shall:
(i) Retain copies of the testing laboratory's report, the TGRA's
compliance certificate, and the TGRA's approval of the use of the Class
II gaming system;
(ii) Maintain records identifying the Class II gaming system and
its current components; and
(iii) Annually review the testing laboratory reports associated
with the Class II gaming system and its current components to determine
whether the Class II gaming system may be approved pursuant to
paragraph (b)(1)(v) of this section. The TGRA shall make a finding
identifying the Class II gaming systems reviewed, the Class II gaming
systems subsequently approved pursuant to paragraph (b)(1)(v), and, for
Class II gaming systems that cannot be approved pursuant to paragraph
(b)(1)(v), the components of the Class II gaming system preventing such
approval.
(3) If the Class II gaming system is subsequently approved by the
TGRA pursuant to paragraph (b)(1)(v) as compliant with paragraph (b) of
this section, this paragraph (a) no longer applies.
(b) Gaming system submission, testing, and approval--generally. (1)
Except as provided in paragraph (a) of this section, a TGRA may not
permit the use of any Class II gaming system in a tribal gaming
operation unless:
(i) The Class II gaming system has been submitted to a testing
laboratory;
(ii) The testing laboratory tests the submission to the standards
established by:
(A) This part;
(B) Any applicable provisions of part 543 of this chapter that are
testable by the testing laboratory; and
(C) The TGRA;
(iii) The testing laboratory provides a formal written report to
the party making the submission, setting forth and certifying its
findings and conclusions, and noting compliance with any standard
established by the TGRA pursuant to paragraph (b)(1)(ii)(C) of this
section;
(iv) The testing laboratory's written report confirms that the
operation of a player interface prototype has been
[[Page 45232]]
certified that it will not be compromised or affected by electrostatic
discharge, liquid spills, electromagnetic interference, or any other
tests required by the TGRA;
(v) Following receipt of the testing laboratory's report, the TGRA
makes a finding that the Class II gaming system conforms to the
standards established by:
(A) This part;
(B) Any applicable provisions of part 543 of this chapter that are
testable by the testing laboratory; and
(C) The TGRA.
(2) For so long as a Class II gaming system is made available for
use at any tribal gaming operation pursuant to this paragraph (b) the
TGRA shall:
(i) Retain a copy of the testing laboratory's report; and
(ii) Maintain records identifying the Class II gaming system and
its current components.
(c) Class II gaming system component repair, replacement, or
modification. (1) As permitted by the TGRA, individual hardware or
software components of a Class II gaming system may be repaired or
replaced to ensure proper functioning, security, or integrity of the
Class II gaming system.
(2) A TGRA may not permit the modification of any Class II gaming
system in a tribal gaming operation unless:
(i) The Class II gaming system modification has been submitted to a
testing laboratory;
(ii) The testing laboratory tests the submission to the standards
established by:
(A) This part;
(B) Any applicable provisions of part 543 of this chapter that are
testable by the testing laboratory; and
(C) The TGRA;
(iii) The testing laboratory provides a formal written report to
the party making the submission, setting forth and certifying its
findings and conclusions, and noting compliance with any standard
established by the TGRA pursuant to paragraph (c)(2)(ii)(C) of this
section;
(iv) Following receipt of the testing laboratory's report, the TGRA
makes a finding that the:
(A) The modification will maintain or advance the Class II gaming
system's compliance with this part and any applicable provisions of
part 543 of this chapter; and
(B) The modification will not detract from, compromise or prejudice
the proper functioning, security, or integrity of the Class II gaming
system;
(3) If a TGRA authorizes a component modification under this
paragraph, it must maintain a record of the modification and a copy of
the testing laboratory report so long as the Class II gaming system
that is the subject of the modification remains available to the public
for play.
(d) Emergency Class II gaming system component modifications. (1) A
TGRA, in its discretion, may permit the modification of previously
approved components to be made available for play without prior
laboratory testing or review if the modified hardware or software is:
(i) Necessary to correct a problem affecting the fairness,
security, or integrity of a game or accounting system or any cashless
system, or voucher system; or
(ii) Unrelated to game play, an accounting system, a cashless
system, or a voucher system.
(2) If a TGRA authorizes modified components to be made available
for play or use without prior testing laboratory review, the TGRA must
thereafter require the hardware or software manufacturer to:
(i) Immediately advise other users of the same components of the
importance and availability of the update;
(ii) Immediately submit the new or modified components to a testing
laboratory for testing and verification of compliance with this part
and any applicable provisions of part 543 of this chapter that are
testable by the testing laboratory; and
(iii) Immediately provide the TGRA with a software signature
verification tool meeting the requirements of Sec. 547.8(f) for any
new or modified software component.
(3) If a TGRA authorizes a component modification under this
paragraph, it must maintain a record of the modification and a copy of
the testing laboratory report so long as the Class II gaming system
that is the subject of the modification remains available to the public
for play.
(e) Compliance by charitable gaming operations. This part does not
apply to charitable gaming operations, provided that:
(1) The tribal government determines that the organization
sponsoring the gaming operation is a charitable organization;
(2) All proceeds of the charitable gaming operation are for the
benefit of the charitable organization;
(3) The TGRA permits the charitable organization to be exempt from
this part;
(4) The charitable gaming operation is operated wholly by the
charitable organization's employees or volunteers; and
(5) The annual gross gaming revenue of the charitable gaming
operation does not exceed $3,000,000.
(f) Testing laboratories. (1) A testing laboratory may provide the
examination, testing, evaluating and reporting functions required by
this section provided that:
(i) It demonstrates its integrity, independence and financial
stability to the TGRA.
(ii) It demonstrates its technical skill and capability to the
TGRA.
(iii) If the testing laboratory is owned or operated by, or
affiliated with, a tribe, it must be independent from the manufacturer
and gaming operator for whom it is providing the testing, evaluating,
and reporting functions required by this section.
(iv) The TGRA:
(A) Makes a suitability determination of the testing laboratory
based upon standards no less stringent than those set out in Sec.
533.6(b)(1)(ii) through (v) of this chapter and based upon no less
information than that required by Sec. 537.1 of this chapter, or
(B) Accepts, in its discretion, a determination of suitability for
the testing laboratory made by any other gaming regulatory authority in
the United States.
(v) After reviewing the suitability determination and the
information provided by the testing laboratory, the TGRA determines
that the testing laboratory is qualified to test and evaluate Class II
gaming systems.
(2) The TGRA must:
(i) Maintain a record of all determinations made pursuant to
paragraphs (f)(1)(iii) and (f)(1)(iv) of this section for a minimum of
three years.
(ii) Place the testing laboratory under a continuing obligation to
notify it of any adverse regulatory action in any jurisdiction where
the testing laboratory conducts business.
(iii) Require the testing laboratory to provide notice of any
material changes to the information provided to the TGRA.
(g) Records. Records required to be maintained under this section
must be made available to the Commission upon request. The Commission
may use the information derived therefrom for any lawful purpose
including, without limitation, to monitor the use of Class II gaming
systems, to assess the effectiveness of the standards required by this
part, and to inform future amendments to this part. The Commission will
only make available for public review records or portions of records
subject to release under the Freedom of Information Act, 5 U.S.C. 552;
the Privacy Act of 1974, 5 U.S.C.
[[Page 45233]]
552a; or the Indian Gaming Regulatory Act, 25 U.S.C. 2716(a).
Dated: September 19, 2017.
Jonodev O. Chaudhuri,
Chairman.
Kathryn Isom-Clause,
Vice Chair.
E. Sequoyah Simermeyer,
Associate Commissioner.
[FR Doc. 2017-20635 Filed 9-27-17; 8:45 am]
BILLING CODE 7565-01-P
