Management Contracts, 68046-68048 [2022-24135]
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68046
Federal Register / Vol. 87, No. 218 / Monday, November 14, 2022 / Rules and Regulations
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requirements of the Office of the Federal
Register, the undersigned DEA Federal
Register Liaison Officer has been
authorized to sign and submit the
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publication, as an official document of
DEA. This administrative process in no
way alters the legal effect of this
document upon publication in the
Federal Register.
Scott Brinks,
Federal Register Liaison Officer, Drug
Enforcement Administration.
[FR Doc. 2022–24425 Filed 11–10–22; 8:45 am]
BILLING CODE 4410–09–P
DEPARTMENT OF THE INTERIOR
National Indian Gaming Commission
25 CFR Part 537
RIN 3141–AA58
Management Contracts
National Indian Gaming
Commission.
ACTION: Final rule.
AGENCY:
The National Indian Gaming
Commission (NIGC or Commission)
issued a proposed rule revising its
management contract regulations. The
Indian Gaming Regulatory Act (IGRA)
provides that an Indian tribe may enter
into a management contract for the
operation of Class II or Class III gaming
activity if such contract has been
submitted to and approved by the NIGC
Chairman. Collateral agreements to a
management contract are also subject to
the Chairman’s approval. This final rule
makes background investigations
required of all persons who have 10
percent or more direct or indirect
financial interest in a management
contract, of all entities with 10 percent
or more financial interest in a
management contract, of any other
person or entity with a direct or indirect
financial interest in a management
contract otherwise designated by the
Commission, and authorizes the
Chairman, either by request or
unilaterally, to exercise discretion to
reduce the scope of the information to
be furnished and background
investigation to be conducted for certain
entities.
DATES: This rule is effective December
14, 2022.
FOR FURTHER INFORMATION CONTACT:
Michael Hoenig, 1849 C Street NW, Mail
Stop #1621, Washington, DC 20240.
Telephone: 202–632–7003.
SUPPLEMENTARY INFORMATION:
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SUMMARY:
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17:07 Nov 10, 2022
Jkt 259001
I. Background
III. Review of Public Comments
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 NIGC and sets out a
comprehensive framework for the
regulation of gaming on Indian lands.
On January 22, 1993, the NIGC
published a final rule in the Federal
Register called Background
Investigations for Person or Entities with
a Financial Interest in a Management
Contract (58 FR 5831). The rule added
a new part to the Commission’s
regulations implementing the mandates
of the Indian Gaming Regulatory Act of
1988 by establishing the requirements
and procedures for the approval of
management contracts concerning
Indian gaming operations and the
conduct of related background
investigations. The Commission has
substantively amended them numerous
times, most recently in 2012 (August 9,
2012; 77 FR 47514). On December 2,
2021, the NIGC published a notice of
proposed rulemaking in the Federal
Register called Background
Investigations for Persons or Entities
With a Financial Interest in or Having
a Management Responsibility for a
Management Contract (86 FR 68446).
Comment: One commenter suggested
that the term ‘‘Chairman’’ be changed to
‘‘Chair’’ throughout the regulation.
Response: The Commission agrees
with the recommendation and has made
that change.
Comment: One commenter suggested
that the term ‘‘indirect financial
interest’’ was too vague and possibly too
broad and should be deleted or defined.
Response: Under IGRA, the NIGC has
broad authority to ensure compliance
with IGRA. Individuals or entities can
have an ‘‘indirect financial interest’’ in
innumerable ways. Any effort to define
this term to specific types of
relationships would improperly and
unnecessarily limit the Commission’s
authority to regulate financial interests
in Indian gaming.
Comment: Several commenters
suggest that the NIGC include
information as to how and when the
Commission will notify a TGRA of a
unilateral decision by the Chair to
reduce the scope of required
information or, alternatively, what
would need to be included in a request
submitted by TGRAs for the same.
Response: The Commission
appreciates the comments and clarifies
that background investigations and
suitability determinations discussed in
this part pertain to management
companies wishing to enter into an
agreement with a tribe, not the tribe
itself. As such, a request for a reduced
scope background investigation would
typically be made by, and granted to, a
management company, individual or
entity with management responsibility
for the contract, or individual or entity
with a direct or indirect financial
interest. If a tribe or wholly owned tribal
entity is proposing to manage another
Tribe’s gaming operation, they may
request a reduced background
investigation or the Chair may elect to
perform one unilaterally. In either case,
the NIGC will notify the requester of a
decision. As to how to make a request,
the Commission responds that it will set
forth any process in a bulletin. If a
potential management company has
questions as to how to request a reduced
scope background investigation prior to
the issuance of that bulletin, the
Commission invites them to contact the
NIGC for further information.
Comment: Another commenter
supports the change to clarify the
reduced scope background
investigation, but suggests the NIGC add
examples of ‘‘approaches the Chair may
take to reduce the scope of information
to be furnished. The commenter
included suggested language to include
II. Development of the Rule
On June 9, 2021, the Commission
issued a Dear Tribal Leader Letter
announcing the beginning of tribal
consultations on 25 CFR 537.1(a)(3),
among other regulations. On July 12,
2021, the Commission issued a second
Dear Tribal Leader Letter announcing
the dates of virtual consultations and
seeking written comments on the
proposed changes to part 537. On July
27, 2021, and July 28, 2021, the
Commission held virtual consultations
and accepted comments from Tribes on
those changes.
Upon reviewing the comments
received during the consultation period
from July 12—August 12, 2021, the
Commission published a Notice of
Proposed Rulemaking (NPRM) on
December 2, 2021 (86 FR 68446). The
NPRM invited interested parties to
participate in the rulemaking process by
submitting comments and any
supporting data to the NIGC by January
3, 2022. The consultation and the
written comments have proven
invaluable to the Commission in making
amendments to the Management
Contract regulations.
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khammond on DSKJM1Z7X2PROD with RULES
Federal Register / Vol. 87, No. 218 / Monday, November 14, 2022 / Rules and Regulations
in the regulation, including accepting
‘‘substantively current background
information submitted previously to the
Commission or other jurisdictions and
providing reciprocity for background
investigation results to reduce the
burden of submitting duplicative
information and reduce delay in
background investigations.’’
Response: The Commission
appreciates the commenter’s support for
the changes to clarify the reduced scope
background investigation, and agrees
that the examples suggested are a
reasonable and sensible way to reduce
the scope of the investigation.
Ultimately, though, the Commission
declines to include the suggested
language. The scope of the background
investigation, though reduced, is still at
the discretion of the Chair, who must
ultimately make the suitability
determination for all entities and
individuals backgrounded. The
Commission does not intend through
this amendment to prescribe what
information the Chair must or may
require as part of a reduced scope
investigation.
Comment: One commenter suggested
that the NIGC consider adding a
standard for when the Chair exercises
his or her discretion to approve a
request for a reduced background
investigation, e.g. what constitutes a
‘‘national bank’’ and to provide
additional detail regarding what
supporting documents tribes would be
required to submit as well as timelines
associated with such requests.
Response: The Commission declines to
define ‘‘National Bank’’ or ‘‘institutional
investor’’ in its regulations, as these are
terms commonly understood in the
Banking and Finance industries. A
National Bank is widely understood to
mean a Commercial Bank formed under
the National Bank Act, 12 U.S.C. 38,
chartered by the Comptroller of the
Currency, and a member of the Federal
Deposit Insurance Company. The term
‘‘institutional investor’’ is defined by
and must be registered with, the
Securities and Exchange Commission.
Comment: One commenter objected to
the NIGC changing its regulation to
initially require background checks and
suitability determination on entities and
individuals that have 10 percent or
more direct or indirect financial interest
in a management contract. The
Commenter believes that imposing a 10
percent interest threshold is ‘‘an
arbitrary approach that will encourage
‘bad actors’ to structure their deals
below the 10 percent threshold to avoid
NIGC scrutiny. The Commenter further
asserts that the change will improve
efficiency at ‘‘the expense of tribes who
VerDate Sep<11>2014
17:07 Nov 10, 2022
Jkt 259001
rely on the NIGC to keep ‘bad actors’ out
of Indian gaming and that the
amendment ‘‘conflicts with the
requirements of the IGRA.’’
Response: The Commission thanks
the Commenter for its input on this
topic. It has determined to finalize the
Change, however, and responds that the
change will not negatively impact the
agency’s ability to protect the interests
of Tribes. At the outset, it is important
to note that the NIGC is not changing
the requirement to submit any
individual or entity that has
management responsibility for the
contract. Accordingly, the NIGC will
still require background investigations
and suitability determinations for all
individuals and entities that may have
any decision-making authority or
influence over the contract or the
Tribe’s gaming operation.
Rather, the purpose of the change is
to reduce the time and expense of
background investigations by no longer
requiring the initial submission of those
with minor financial interests in, but no
control over, the management contract
or the gaming operation. Moreover, the
regulation includes a provision
requiring a background investigation
and suitability determination for ‘‘any
other person or entity with a direct or
indirect financial interest in a
management contract otherwise
designated by the Commission.’’ When
a management contract is submitted, the
NIGC’s background investigators ensure
that the list that was submitted is
accurate. As part of that review, they
will ask for a full list of all the entities
and individuals involved in, and with a
financial interest in, the contract, even
if not all of those entities and
individuals will be subject to a
background investigation. If, however,
investigators identify an entity or
individual that should be subject to
further review, the Commission may
order such pursuant to § 537.1(a)(3). For
these reasons, the Commission does not
believe the amendment creates any
additional risk to Tribes, does not
permit a bad actor to structure its
management contract in a way that
allows them to escape review from the
NIGC, and meets IGRA’s purpose of
‘‘shielding tribes from organized crime
and other corrupting influences.’’
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
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Fmt 4700
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68047
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 rule does not unduly burden the
judicial system and meets the
requirements of sections 3(a) and 3(b)(2)
of the Order.
National Environmental Policy Act
The Commission has determined that
the rule does not constitute a major
federal action significantly affecting the
quality of the human environment and
that no detailed statement is required
pursuant to the National Environmental
Policy Act of 1969, 42 U.S.C. 4321, et
seq.
Paperwork Reduction Act
The information collection
requirements contained in this rule
were previously approved by the Office
of Management and Budget (OMB) as
required by 44 U.S.C. 3501 et seq. and
assigned OMB Control Number 3141–
0007.
Tribal Consultation
The National Indian Gaming
Commission is committed to fulfilling
its tribal consultation obligations—
whether directed by statute or
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14NOR1
68048
Federal Register / Vol. 87, No. 218 / Monday, November 14, 2022 / Rules and Regulations
administrative action such as Executive
Order (E.O.) 13175 (Consultation and
Coordination with Indian Tribal
Governments)—by adhering to the
consultation framework described in its
Consultation Policy published July 15,
2013. The NIGC’s consultation policy
specifies that it will consult with tribes
on Commission Action with Tribal
Implications, which is defined as: Any
Commission regulation, rulemaking,
policy, guidance, legislative proposal, or
operational activity that may have a
substantial direct effect on an Indian
tribe on matters including, but not
limited to, the ability of an Indian tribe
to regulate its Indian gaming; an Indian
Tribe’s formal relationship with the
Commission; or the consideration of the
Commission’s trust responsibilities to
Indian tribes.
Pursuant to this policy, on June 9,
2021, the National Indian Gaming
Commission sent a Notice of
Consultation announcing that the
Agency intended to consult on a
number of topics, including proposed
changes to the management contract
process. On July 27, 2021, and July 28,
2021, the Commission held two virtual
consultations on the proposed changes
to the management contract process.
List of Subjects in 25 CFR Part 537
Gambling, Indian—lands, Indian—
tribal government, Reporting and
recordkeeping requirements.
For the reasons set forth in the
preamble, the Commission amends 25
CFR part 537 as follows:
Authority: 25 U.S.C. 81, 2706(b)(10),
2710(d)(9), 2711.
2. Amend § 537.1 by revising
paragraphs (a)(1) through (3) and adding
paragraph (d) to read as follows:
■
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Applications for approval.
(a) * * *
(1) All persons who have 10 percent
or more or indirect financial interest in
a management contract;
(2) All entities with 10 percent or
more financial interest in a management
contract; and
(3) Any other person or entity with a
direct or indirect financial interest in a
management contract otherwise
designated by the Commission.
*
*
*
*
*
Jkt 259001
*
[FR Doc. 2022–24135 Filed 11–10–22; 8:45 am]
BILLING CODE 7565–01–P
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
[TD 9967]
Internal Revenue Service (IRS),
Treasury.
ACTION: Correcting amendments.
AGENCY:
1. The authority citation for part 537
continues to read:
17:07 Nov 10, 2022
Edward Simermeyer,
Chairman.
Jean Hovland,
Vice Chair.
Section 42, Low-Income Housing
Credit Average Income Test
Regulations; Correction
■
VerDate Sep<11>2014
Correction of Publication
Accordingly, 26 CFR part 1 is
corrected by making the following
correcting amendments:
RIN 1545–BO92
PART 537—BACKGROUND
INVESTIGATIONS FOR PERSONS OR
ENTITIES WITH A FINANCIAL
INTEREST IN, OR HAVING
MANAGEMENT RESPONSIBILITY FOR,
A MANAGEMENT CONTRACT
§ 537.1
(d) For any of the following entities,
or individuals associated with the
following entities, the Chair may, upon
request or unilaterally, exercise
discretion to reduce the scope of the
information to be furnished and
background investigation to be
conducted:
(1) Tribe as defined at 25 CFR 502.13;
(2) Wholly owned Tribal entity;
(3) National bank; or
(4) Institutional investor that is
federally regulated or is required to
undergo a background investigation and
licensure by a State or Tribe pursuant to
a Tribal-State compact.
This document contains
corrections to the final regulations
(Treasury Decision 9967) published in
the Federal Register on Wednesday,
October 12, 2022. This correction
includes final and temporary
regulations setting forth guidance on the
average income test for purposes of the
low-income housing credit.
DATES: These corrections are effective
on November 14, 2022 and applicable
on or after October 12, 2022.
FOR FURTHER INFORMATION CONTACT:
Concerning the regulations, Dillon
Taylor at (202) 317–4137.
SUPPLEMENTARY INFORMATION:
SUMMARY:
Background
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and
recordkeeping requirements.
Frm 00028
Paragraph 1. The authority citation
for part 1 continues to read in part as
follows:
■
Authority: 26 U.S.C. 7805 * * *
Par. 2. Section 1.42–19 is amended by
revising the first sentence of paragraph
(d)(1)(v) to read as follows:
■
§ 1.42–19
Average income test.
*
*
*
*
(d) * * *
(1) * * *
(v) * * * If one or more units lose
low-income status or if there is a change
in the imputed income limitation of
some unit and if either event would
cause a previously qualifying group of
units to cease to be described in
paragraph (b)(2)(ii) of this section, then
the taxpayer may designate an imputed
income limitation for a market-rate unit
or may reduce the existing imputed
income limitations of one or more other
units in the project in order to restore
compliance with the average income
requirement. * * *
*
*
*
*
*
Oluwafunmilayo A. Taylor,
Branch Chief, Legal Processing Division,
Associate Chief Counsel, (Procedure and
Administration).
[FR Doc. 2022–24636 Filed 11–10–22; 8:45 am]
BILLING CODE 4830–01–P
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
[TD 9967]
RIN 1545–BO92
Section 42, Low-Income Housing
Credit Average Income Test
Regulations; Correction
Internal Revenue Service (IRS),
Treasury.
ACTION: Final and temporary
regulations; correction.
AGENCY:
This document contains
corrections to the final regulations
(Treasury Decision 9967) published in
the Federal Register on Wednesday,
October 12, 2022. This correction
includes final and temporary
regulations setting forth guidance on the
average income test for purposes of the
low-income housing credit.
SUMMARY:
The final regulations (TD 9967)
subject to this correction are issued
under section 42 of the Internal Revenue
Code.
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PART 1—INCOME TAXES
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14NOR1
Agencies
[Federal Register Volume 87, Number 218 (Monday, November 14, 2022)]
[Rules and Regulations]
[Pages 68046-68048]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-24135]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF THE INTERIOR
National Indian Gaming Commission
25 CFR Part 537
RIN 3141-AA58
Management Contracts
AGENCY: National Indian Gaming Commission.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The National Indian Gaming Commission (NIGC or Commission)
issued a proposed rule revising its management contract regulations.
The Indian Gaming Regulatory Act (IGRA) provides that an Indian tribe
may enter into a management contract for the operation of Class II or
Class III gaming activity if such contract has been submitted to and
approved by the NIGC Chairman. Collateral agreements to a management
contract are also subject to the Chairman's approval. This final rule
makes background investigations required of all persons who have 10
percent or more direct or indirect financial interest in a management
contract, of all entities with 10 percent or more financial interest in
a management contract, of any other person or entity with a direct or
indirect financial interest in a management contract otherwise
designated by the Commission, and authorizes the Chairman, either by
request or unilaterally, to exercise discretion to reduce the scope of
the information to be furnished and background investigation to be
conducted for certain entities.
DATES: This rule is effective December 14, 2022.
FOR FURTHER INFORMATION CONTACT: Michael Hoenig, 1849 C Street NW, Mail
Stop #1621, Washington, DC 20240. Telephone: 202-632-7003.
SUPPLEMENTARY INFORMATION:
I. 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 NIGC and sets out a comprehensive framework for the
regulation of gaming on Indian lands. On January 22, 1993, the NIGC
published a final rule in the Federal Register called Background
Investigations for Person or Entities with a Financial Interest in a
Management Contract (58 FR 5831). The rule added a new part to the
Commission's regulations implementing the mandates of the Indian Gaming
Regulatory Act of 1988 by establishing the requirements and procedures
for the approval of management contracts concerning Indian gaming
operations and the conduct of related background investigations. The
Commission has substantively amended them numerous times, most recently
in 2012 (August 9, 2012; 77 FR 47514). On December 2, 2021, the NIGC
published a notice of proposed rulemaking in the Federal Register
called Background Investigations for Persons or Entities With a
Financial Interest in or Having a Management Responsibility for a
Management Contract (86 FR 68446).
II. Development of the Rule
On June 9, 2021, the Commission issued a Dear Tribal Leader Letter
announcing the beginning of tribal consultations on 25 CFR 537.1(a)(3),
among other regulations. On July 12, 2021, the Commission issued a
second Dear Tribal Leader Letter announcing the dates of virtual
consultations and seeking written comments on the proposed changes to
part 537. On July 27, 2021, and July 28, 2021, the Commission held
virtual consultations and accepted comments from Tribes on those
changes.
Upon reviewing the comments received during the consultation period
from July 12--August 12, 2021, the Commission published a Notice of
Proposed Rulemaking (NPRM) on December 2, 2021 (86 FR 68446). The NPRM
invited interested parties to participate in the rulemaking process by
submitting comments and any supporting data to the NIGC by January 3,
2022. The consultation and the written comments have proven invaluable
to the Commission in making amendments to the Management Contract
regulations.
III. Review of Public Comments
Comment: One commenter suggested that the term ``Chairman'' be
changed to ``Chair'' throughout the regulation.
Response: The Commission agrees with the recommendation and has
made that change.
Comment: One commenter suggested that the term ``indirect financial
interest'' was too vague and possibly too broad and should be deleted
or defined.
Response: Under IGRA, the NIGC has broad authority to ensure
compliance with IGRA. Individuals or entities can have an ``indirect
financial interest'' in innumerable ways. Any effort to define this
term to specific types of relationships would improperly and
unnecessarily limit the Commission's authority to regulate financial
interests in Indian gaming.
Comment: Several commenters suggest that the NIGC include
information as to how and when the Commission will notify a TGRA of a
unilateral decision by the Chair to reduce the scope of required
information or, alternatively, what would need to be included in a
request submitted by TGRAs for the same.
Response: The Commission appreciates the comments and clarifies
that background investigations and suitability determinations discussed
in this part pertain to management companies wishing to enter into an
agreement with a tribe, not the tribe itself. As such, a request for a
reduced scope background investigation would typically be made by, and
granted to, a management company, individual or entity with management
responsibility for the contract, or individual or entity with a direct
or indirect financial interest. If a tribe or wholly owned tribal
entity is proposing to manage another Tribe's gaming operation, they
may request a reduced background investigation or the Chair may elect
to perform one unilaterally. In either case, the NIGC will notify the
requester of a decision. As to how to make a request, the Commission
responds that it will set forth any process in a bulletin. If a
potential management company has questions as to how to request a
reduced scope background investigation prior to the issuance of that
bulletin, the Commission invites them to contact the NIGC for further
information.
Comment: Another commenter supports the change to clarify the
reduced scope background investigation, but suggests the NIGC add
examples of ``approaches the Chair may take to reduce the scope of
information to be furnished. The commenter included suggested language
to include
[[Page 68047]]
in the regulation, including accepting ``substantively current
background information submitted previously to the Commission or other
jurisdictions and providing reciprocity for background investigation
results to reduce the burden of submitting duplicative information and
reduce delay in background investigations.''
Response: The Commission appreciates the commenter's support for
the changes to clarify the reduced scope background investigation, and
agrees that the examples suggested are a reasonable and sensible way to
reduce the scope of the investigation. Ultimately, though, the
Commission declines to include the suggested language. The scope of the
background investigation, though reduced, is still at the discretion of
the Chair, who must ultimately make the suitability determination for
all entities and individuals backgrounded. The Commission does not
intend through this amendment to prescribe what information the Chair
must or may require as part of a reduced scope investigation.
Comment: One commenter suggested that the NIGC consider adding a
standard for when the Chair exercises his or her discretion to approve
a request for a reduced background investigation, e.g. what constitutes
a ``national bank'' and to provide additional detail regarding what
supporting documents tribes would be required to submit as well as
timelines associated with such requests. Response: The Commission
declines to define ``National Bank'' or ``institutional investor'' in
its regulations, as these are terms commonly understood in the Banking
and Finance industries. A National Bank is widely understood to mean a
Commercial Bank formed under the National Bank Act, 12 U.S.C. 38,
chartered by the Comptroller of the Currency, and a member of the
Federal Deposit Insurance Company. The term ``institutional investor''
is defined by and must be registered with, the Securities and Exchange
Commission.
Comment: One commenter objected to the NIGC changing its regulation
to initially require background checks and suitability determination on
entities and individuals that have 10 percent or more direct or
indirect financial interest in a management contract. The Commenter
believes that imposing a 10 percent interest threshold is ``an
arbitrary approach that will encourage `bad actors' to structure their
deals below the 10 percent threshold to avoid NIGC scrutiny. The
Commenter further asserts that the change will improve efficiency at
``the expense of tribes who rely on the NIGC to keep `bad actors' out
of Indian gaming and that the amendment ``conflicts with the
requirements of the IGRA.''
Response: The Commission thanks the Commenter for its input on this
topic. It has determined to finalize the Change, however, and responds
that the change will not negatively impact the agency's ability to
protect the interests of Tribes. At the outset, it is important to note
that the NIGC is not changing the requirement to submit any individual
or entity that has management responsibility for the contract.
Accordingly, the NIGC will still require background investigations and
suitability determinations for all individuals and entities that may
have any decision-making authority or influence over the contract or
the Tribe's gaming operation.
Rather, the purpose of the change is to reduce the time and expense
of background investigations by no longer requiring the initial
submission of those with minor financial interests in, but no control
over, the management contract or the gaming operation. Moreover, the
regulation includes a provision requiring a background investigation
and suitability determination for ``any other person or entity with a
direct or indirect financial interest in a management contract
otherwise designated by the Commission.'' When a management contract is
submitted, the NIGC's background investigators ensure that the list
that was submitted is accurate. As part of that review, they will ask
for a full list of all the entities and individuals involved in, and
with a financial interest in, the contract, even if not all of those
entities and individuals will be subject to a background investigation.
If, however, investigators identify an entity or individual that should
be subject to further review, the Commission may order such pursuant to
Sec. 537.1(a)(3). For these reasons, the Commission does not believe
the amendment creates any additional risk to Tribes, does not permit a
bad actor to structure its management contract in a way that allows
them to escape review from the NIGC, and meets IGRA's purpose of
``shielding tribes from organized crime and other corrupting
influences.''
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 rule does not unduly burden the judicial system and
meets the requirements of sections 3(a) and 3(b)(2) of the Order.
National Environmental Policy Act
The Commission has determined that the rule does not constitute a
major federal action significantly affecting the quality of the human
environment and that no detailed statement is required pursuant to the
National Environmental Policy Act of 1969, 42 U.S.C. 4321, et seq.
Paperwork Reduction Act
The information collection requirements contained in this rule were
previously approved by the Office of Management and Budget (OMB) as
required by 44 U.S.C. 3501 et seq. and assigned OMB Control Number
3141- 0007.
Tribal Consultation
The National Indian Gaming Commission is committed to fulfilling
its tribal consultation obligations--whether directed by statute or
[[Page 68048]]
administrative action such as Executive Order (E.O.) 13175
(Consultation and Coordination with Indian Tribal Governments)--by
adhering to the consultation framework described in its Consultation
Policy published July 15, 2013. The NIGC's consultation policy
specifies that it will consult with tribes on Commission Action with
Tribal Implications, which is defined as: Any Commission regulation,
rulemaking, policy, guidance, legislative proposal, or operational
activity that may have a substantial direct effect on an Indian tribe
on matters including, but not limited to, the ability of an Indian
tribe to regulate its Indian gaming; an Indian Tribe's formal
relationship with the Commission; or the consideration of the
Commission's trust responsibilities to Indian tribes.
Pursuant to this policy, on June 9, 2021, the National Indian
Gaming Commission sent a Notice of Consultation announcing that the
Agency intended to consult on a number of topics, including proposed
changes to the management contract process. On July 27, 2021, and July
28, 2021, the Commission held two virtual consultations on the proposed
changes to the management contract process.
List of Subjects in 25 CFR Part 537
Gambling, Indian--lands, Indian--tribal government, Reporting and
recordkeeping requirements.
For the reasons set forth in the preamble, the Commission amends 25
CFR part 537 as follows:
PART 537--BACKGROUND INVESTIGATIONS FOR PERSONS OR ENTITIES WITH A
FINANCIAL INTEREST IN, OR HAVING MANAGEMENT RESPONSIBILITY FOR, A
MANAGEMENT CONTRACT
0
1. The authority citation for part 537 continues to read:
Authority: 25 U.S.C. 81, 2706(b)(10), 2710(d)(9), 2711.
0
2. Amend Sec. 537.1 by revising paragraphs (a)(1) through (3) and
adding paragraph (d) to read as follows:
Sec. 537.1 Applications for approval.
(a) * * *
(1) All persons who have 10 percent or more or indirect financial
interest in a management contract;
(2) All entities with 10 percent or more financial interest in a
management contract; and
(3) Any other person or entity with a direct or indirect financial
interest in a management contract otherwise designated by the
Commission.
* * * * *
(d) For any of the following entities, or individuals associated
with the following entities, the Chair may, upon request or
unilaterally, exercise discretion to reduce the scope of the
information to be furnished and background investigation to be
conducted:
(1) Tribe as defined at 25 CFR 502.13;
(2) Wholly owned Tribal entity;
(3) National bank; or
(4) Institutional investor that is federally regulated or is
required to undergo a background investigation and licensure by a State
or Tribe pursuant to a Tribal-State compact.
Edward Simermeyer,
Chairman.
Jean Hovland,
Vice Chair.
[FR Doc. 2022-24135 Filed 11-10-22; 8:45 am]
BILLING CODE 7565-01-P