Daily Rules, Proposed Rules, and Notices of the Federal Government
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.
The Indian Gaming Regulatory Act (IGRA or Act), Public Law 100-497, 25 U.S.C. 2701
The IGRA established an agency funding framework whereby gaming operations licensed by tribes pay a fee to the Commission for each gaming operation that conducts Class II or Class III gaming activity that is regulated by IGRA. 25 U.S.C. 2717(a)(1). These fees are used to fund the Commission in carrying out its regulatory authority. Fees are based on the gaming operation's gross revenues which are defined as the annual total amount of money wagered, less any amounts paid out as prizes or paid for prizes awarded and less allowance for amortization of capital expenditures for structures. 25 U.S.C. 2717(a)(6). The rate of fees is established annually by the Commission and shall be payable on a quarterly basis. 25 U.S.C. 2717(a)(3). IGRA limits the total amount of fees imposed during any fiscal year to .08 percent of the gross gaming revenues of all gaming operations subject to regulation under IGRA. Failure of a gaming operation to pay the fees imposed by the Commission's fee schedule can be grounds for a civil enforcement action. 25 U.S.C. 2713(a)(1). The purpose of Part 514 is to establish how the NIGC sets and collects those fees, to establish a basic formula for tribes to utilize in calculating the amount of fees to pay, and to advise of the consequences for failure to pay the fees.
On November 18, 2010, the National Indian Gaming Commission (NIGC) issued a Notice of Inquiry and Notice of Consultation advising the public that the NIGC was conducting a comprehensive review of its regulations and requesting public comment on which of its regulations were most in need of revision, in what order the Commission should review its regulations, and the process NIGC should utilize to make revisions. 75 FR 70680. On April 4, 2011, after holding eight consultations and reviewing all comments, NIGC published a Notice of Regulatory Review Schedule (NRR) setting out a consultation schedule and process for review. 76 FR 18457. Part 514 was included in the first regulatory group reviewed pursuant to the NRR.
The Commission conducted a total of 11 tribal consultations as part of its review of Part 514. Tribal consultations were held in every region of the country
Currently, each gaming operation regulated by IGRA must submit fee statements showing the calculation of assessable gross revenues for the previous calendar year. The Preliminary Draft of amendments to Part 514 proposed changing the timeframe of the fee calculation from the calendar year to the gaming operation's fiscal year. It is important to note that fees set by the Commission continue to be based on the gross gaming revenues of tribes, subject to the .08 percent limit established by 25 U.S.C. 2717. Comments received on the Preliminary Draft of Part 514 generally supported basing annual fees on a gaming operation's fiscal year rather than a calendar year. One commenter objected to the use of a fiscal year for calculating annual fees. The commenter expressed concern created by a conversion from a calendar year to a fiscal year and the inevitable overlap period that conversion would create.
In this proposed rule, Section 514.7 addresses the overlap period by requiring the tribe to notify the Commission of the “stub period” and submit the financial statements and fees for that period within 90 days of the tribe's request. Further, this proposed rule does not mandate a tribe change their fiscal year. While many tribes utilize a fiscal year that is not based on the calendar year, other tribes do utilize a fiscal year based on a calendar year. The Commission believes that the use of a fiscal year for calculating annual fees and completing fee statements will result in fewer inaccuracies in the calculation. The Commission notes that errors in calculating the fees have occurred as a result of a gaming operation's fiscal year being different than the calendar year. This proposed amendment changes the annual timeframe for calculating the fees; the formula contained in the regulation for calculating the assessable gross gaming revenue remains the same. The Commission believes that this proposed amendment will result in greater efficiencies for both NIGC and tribes by reducing the likelihood of errors in the fee calculation.
Part 514 currently requires each gaming operation regulated by IGRA to submit bi-annual fee statements showing its assessable gross revenues and to submit fee payment with those statements. The statements must show the amounts derived from each class of game, the amounts deducted for prizes, and amounts deducted for amortization of structures. The statements must also include the computation of the fees payable, showing all the amounts used in the calculation. The statements are due on or before June 30th and December 31st of each year.
The Preliminary Draft of Part 514 proposed changing from a bi-annual submission requirement to a quarterly submission requirement. Comments support this proposed amendment, noting however, that there should be no prohibition on pre-paying the fees for an entire year. The Commission is not proposing a revision that would prohibit pre-payment. However, quarterly fee statements are still required, even if the fee has been prepaid. Based on a review of the comments received, the Commission proposes to amend Part 514 to require the submission of quarterly fee statements and payments.
The discussion draft Part 514 proposed amendments which would utilize standard industry language. The discussion draft proposed changing “admission fees” to “entry fees”. “Entry fee” is a term commonly used in the gaming industry and the Commission believes the clarification will eliminate concern that an “admission fee” includes admission to concerts or other non-gaming activity. The Commission did not receive any comments on the Preliminary Draft that opposed the changes. Accordingly, the Commission proposes amending Part 514 to incorporate these revisions.
IGRA and NIGC regulations provide that a failure to pay fees may result in closure or revocation of approval of any license, ordinance, or resolution required under IGRA. The NIGC has issued Notices of Violation (NOV) and civil fine assessments to tribes submitting their fees late. The Commission notes that because the NIGC does not receive federal appropriations to fund its operations, it is vital that fees are submitted in a timely manner to ensure the continued funding of NIGC operations. Tribes have commented that a NOV for the late payment of fees can be an unnecessarily punitive response. In response to this concern, the Commission circulated in the Preliminary Draft a fine system that would address fees paid less than and upto 90 days after they are due.
Comments received on the Preliminary Draft supported the development of a system that addresses a late payment in a tiered approach. Comments acknowledged the need for submission of fees in a timely manner, but also noted that the circumstances of minor delays should be considered before issuance of a NOV and civil fine assessment.
The Commission proposes amending Part 514 to add a “ticket” system which assesses a fine for a late fee payment. The proposed Rule distinguishes between “late payments” and “failure to pay annual fees.” A payment received between 1 and 90 days late is a “late payment” and would be subject to an increasing percentage based late payment fine. A payment received after 90 days constitutes a “failure to pay annual fees” and subjects the tribe to a potential NOV and civil fine assessment. The proposed rule also includes a mechanism whereby the Chair may consider any mitigating circumstances surrounding the late payments and reduce the fine due. Per federal law, any fines are payable to U.S. Treasury, not the NIGC.
The NOI asked whether the Part should include a section on fingerprint processing fees. Comments received in response to the NOI supported this revision.
The Commission included in the Preliminary Draft provisions for the collection of fees for processing fingerprints. The section requires the Commission to adopt preliminary rates for processing fingerprints at the same time as the annual fee schedule is set and modified (March 1 and June 1 of each year). If a tribe fails to pay its bill for fingerprint fees, the Chair may suspend further fingerprint card processing for that tribe.
Comments received supported this revision. Some comments expressed concern about fluctuating costs and the need to adjust costs as needed. In order to address this issue, the proposed rule provides for the Commission to review the fee rate annually and establish a preliminary rate in March and adopt a final rate in July of each year. Another comment recommended the fingerprinting fees being included in the calculation of net revenues as a statutorily required operating expense. The proposed draft does not include this language as
The proposed amendment includes the provisions circulated in the Preliminary Draft. The Commission believes formalizing the procedures for assessing fingerprint card processing fees in a regulation provides transparency and clarity.
In the Notice of Inquiry, the Commission asked whether the definition of
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,
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.
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).
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.
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.
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,
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
25 U.S.C. 2706(b)(10); E.O. 13175.
For the reasons discussed in the Preamble, the Commission proposes to revise 25 CFR part 514 to read as follows:
25 U.S.C. 2706, 2710, 2710, 2717, 2717a
Each gaming operation under the jurisdiction of the Commission, including a tribe with a certificate of self-regulation, shall pay to the Commission annual fees as established by the Commission. The Commission, by a vote of not less than two of its members, shall adopt the rates of fees to be paid.
(a) The Commission shall adopt preliminary rates for each calendar year no later than March 1st of each year, and, if considered necessary, shall modify those rates no later than June 1st of that year.
(b) The Commission shall publish the rates of fees in a notice in the
(a) The rates of fees imposed shall be—
(1) No more than 2.5 percent of the first $1,500,000 (1st tier), and
(2) No more than 5 percent of amounts in excess of the first $1,500,000 (2nd tier) of the assessable gross revenues from each gaming operation subject to the jurisdiction of the Commission.
(b) If a tribe has a certificate of self-regulation, the rate of fees imposed shall be no more than .25 percent of assessable gross revenues from self-regulated class II gaming operations.
(a) For purposes of computing fees, assessable gross revenues for each gaming operation are the annual total amount of money wagered on class II and III games, entry fees (including table or card fees), less any amounts paid out as prizes or paid for prizes awarded, and less an allowance for amortization of capital expenditures for structures as reflected in the gaming operation's audited financial statements.
(b) Each gaming operation subject to these regulations shall calculate the annual fee based on the gaming operation's fiscal year.
(c) Unless otherwise provided by the regulations, generally accepted accounting principles shall be used.
(d) The allowance for amortization of capital expenditures for structures shall be either:
(1) An amount not to exceed 5% of the cost of structures in use throughout the year and 2.5% (two and one-half percent) of the cost of structures in use during only a part of the year; or
(2) An amount not to exceed 10% of the total amount of depreciation expenses for the year.
(e) Examples of computations follow:
(1) For paragraph (d)(1) of this section:
(2) For paragraph (d)(2) of this section:
(f) All class II and III revenues from gaming operations are to be included.
Each gaming operation shall calculate the amount of fees to be paid and remit them with the quarterly statement required in § 514.6. The fees payable shall be computed using:
(a) The most recent rates of fees adopted by the Commission pursuant to paragraph (a) of § 514.1,
(b) The assessable gross revenues for the previous fiscal year as calculated using § 514.4, and
(c) The amounts paid and credits received during the fiscal year, if applicable.
(a) Each gaming operation subject to the jurisdiction of the Commission shall file with the Commission quarterly statements showing its assessable gross revenues for the previous fiscal year.
(b) These statements shall show the amounts derived from each type of game, the amounts deducted for prizes, and the amounts deducted for the amortization of structures.
(c) The quarterly statements shall be sent to the Commission within three (3) months, six (6) months, nine (9) months, and twelve (12) months of the end of the gaming operation's fiscal year.
(d) The quarterly statements shall identify an individual or individuals to be contacted should the Commission need to communicate further with the gaming operation. The telephone numbers of the individual(s) shall be included.
(e) Each quarterly statement shall include the computation of the fees payable, showing all amounts used in the calculations. The required calculations are as follows:
(1) Multiply the 1st tier assessable gross revenues, as calculated using § 514.4, by the rate for those revenues adopted by the Commission.
(2) Multiply the 2nd tier assessable gross revenues, as calculated using § 514.4, by the rate for those revenues adopted by the Commission.
(3) Add (total) the results (products) obtained in paragraphs (e)(1) and (2) of this section.
(4) Multiply the total obtained in paragraph (e)(3) of this section by
(5) The amount computed in paragraph (e)(4) of this section is the amount to be remitted.
(f) Examples of fee computations follow:
(1) Where a filing is made for the first quarter of the fiscal year, the previous year's assessable gross revenues as calculated using section 514.4 of this Part are $2,000,000, the fee rates adopted by the Commission are 0.0% on the first $1,500,000 and .08% on the remainder, the amounts to be used and the computations to be made are as follows:
(g) As required by part 571 of this chapter, quarterly statements must be reconciled with a tribe's audited or reviewed financial statements for each gaming location. These reconciliations must be made available upon the request of any authorized representative of the NIGC.
If a gaming operation changes its fiscal year, it shall notify the Commission of the change within thirty (30) days. The Commission may request that the tribe prepare and submit to the Commission the fees and statements required by this subsection for the stub period from the end of the previous fiscal year to the beginning of the new fiscal year. The submission must be sent to the Commission within ninety (90) days of its request.
The statements, remittances and communications about fees shall be transmitted to the Commission at the following address: Comptroller, National Indian Gaming Commission, 1441 L Street, NW., Suite 9100, Washington, DC 20005. Checks should be made payable to the National Indian Gaming Commission (do not remit cash).
(a) In the event that a gaming operation fails to submit a fee payment or quarterly statement in a timely manner, the Chair of the Commission may issue a notice specifying:
(1) The date the statement and/or payment was due;
(2) The number of calendar days late the statement and/or payment was submitted;
(3) A citation to the federal or tribal requirement that has been or is being violated;
(4) The action being considered by the Chair; and
(5) Notice of rights of appeal pursuant to part 577 of this chapter.
(b) Within fifteen (15) days of service of the notice, a respondent may submit written information about the notice to the Chair. The Chair shall consider any information submitted by the respondent as well as the respondent's history of untimely submissions or failure to file statements and/or fee payments over the preceding five (5) years in determining the amount of the late fee, if any.
(c) When practicable, within thirty (30) days of issuing the notice described in paragraph (a) of this section to a respondent, the Chair of the Commission may assess a proposed late fee against a respondent for each failure to file a timely quarterly statement and/or fee payment:
(1) For statements and/or fee payments one (1) to thirty (30) calendar days late, the Chair may propose a late fee of up to, but not more than ten percent (10%) of the fee amount for that quarter, as calculated in § 514.6(e);
(2) For statements and/or fee payments thirty-one (31) to sixty (60) calendar days late, the Chair may propose a late fee of up to, but not more than fifteen percent (15%) of the fee amount for that quarter, as calculated in § 514.6(e);
(3) For statements and/or fee payments sixty-one (61) to ninety (90) calendar days late, the Chair may propose a late fee of up to, but not more than twenty percent (20%) of the fee amount for that quarter, as calculated in § 514.6(e).
(a) Statements and/or fee payments over ninety (90) calendar days late constitute a failure to pay the annual fee, as set forth in IGRA, 25 U.S.C. 2717(a)(3), and NIGC regulations, 25 CFR 573.6(a)(2). In accordance with 25 U.S.C. 2717(a)(3), failure to pay fees shall be grounds for revocation of the approval of the Chair of any license, ordinance or resolution required under IGRA for the operation of gaming.
(b) In accordance with § 573.6(a)(2) of this chapter, if a tribe, management contractor, or individually owned gaming operation fails to pay the annual fee, the Chair may issue a notice of violation and, simultaneously with or subsequently to the notice of violation, a temporary closure order.
(a) Proposed late fees assessed by the Chair may be appealed under part 577 of this chapter.
(b) At any time prior to the filing of a notice of appeal under part 577 of this chapter, the Chair and the respondent may agree to settle the notice of late submission, including the amount of the proposed late fee. In the event a settlement is reached, a settlement agreement shall be prepared and executed by the Chair and the respondent. If a settlement agreement is executed, the respondent shall be deemed to have waived all rights to further review of the notice or late fee in question, except as otherwise provided expressly in the settlement agreement. In the absence of a settlement of the issues under this paragraph, the respondent may contest the proposed late fee before the Commission in accordance with part 577 of this chapter.
If the respondent fails to appeal under part 577 of this chapter, the notice and the proposed late fee shall become a final order of the Commission and final agency action.
(a) Late fees assessed under this part shall be paid by the person or entity assessed and shall not be treated as an operating expense of the operation.
(b) The Commission shall transfer the late fee paid under this subchapter to the U.S. Treasury.
(c) Interest shall be assessed at rates established from time to time by the Secretary of the Treasury on amounts remaining unpaid after their due date.
(a) The total amount of all fees imposed during any fiscal year shall not exceed the statutory maximum imposed by Congress. The Commission shall credit pro-rata any fees collected in excess of this amount against amounts otherwise due according to § 514.4.
(b) To the extent that revenue derived from fees imposed under the schedule
Tribes may submit fingerprint cards to the Commission for processing by the Federal Bureau of Investigation (FBI) and the Commission may charge a fee to process fingerprint cards on behalf of the tribes.
(a) The Commission shall review annually the costs involved in processing fingerprint cards and, by a vote of not less than two of its members, shall adopt preliminary rates for each calendar year no later than March 1st of that year, and, if considered necessary, shall modify those rates no later than June 1st of that year.
(b) The fingerprint fee charge shall be based on fees charged by the Federal Bureau of Investigation and costs incurred by the Commission. Commission costs include Commission personnel, supplies, equipment costs, and postage to submit the results to the requesting tribe.
(a) Fees for processing fingerprint cards will be billed monthly to each Tribe for cards processed during the prior month. Tribes shall pay the amount billed within forty-five (45) days of the date of the bill.
(b) The Chair may suspend fingerprint card processing for a tribe that has a bill remaining unpaid for more than forty-five (45) days.
(c) Fingerprint fees shall be sent to the following address: Comptroller, National Indian Gaming Commission, 1441 L Street, NW., Suite 9100, Washington, DC 20005. Checks should be made payable to the National Indian Gaming Commission (do not remit cash).