83 FR 39877 - Minimum Internal Control Standards

DEPARTMENT OF THE INTERIOR
National Indian Gaming Commission

Federal Register Volume 83, Issue 156 (August 13, 2018)

The National Indian Gaming Commission (NIGC) is suspending its minimum internal control standards (MICS) for Class III gaming under the Indian Gaming Regulatory Act. Updated guidance for Class III MICS will now be maintained at www.nigc.gov.

[Federal Register Volume 83, Number 156 (Monday, August 13, 2018)]
[Rules and Regulations]
[Pages 39877-39879]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-16254]


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DEPARTMENT OF THE INTERIOR

National Indian Gaming Commission

25 CFR Part 542

RIN 3141-AA55


Minimum Internal Control Standards

AGENCY: National Indian Gaming Commission, Department of the Interior.

ACTION: Notification of final rulemaking; stay.

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SUMMARY: The National Indian Gaming Commission (NIGC) is suspending its 
minimum internal control standards (MICS) for Class III gaming under 
the Indian Gaming Regulatory Act. Updated guidance for Class III MICS 
will now be maintained at www.nigc.gov.

DATES: This rule is effective September 27, 2018. Title 25 CFR part 542 
is stayed effective September 27, 2018.

FOR FURTHER INFORMATION CONTACT: Jennifer Lawson at 202-632-7003 or 
write to [email protected].

SUPPLEMENTARY INFORMATION: 

I. Background

    The NIGC Class III MICS were promulgated in 1999 and last 
substantively revised in 2005. In 2006, the D.C. Circuit Court of 
Appeals in Colorado River Indian Tribes v. Nat'l Indian Gaming Comm'n, 
466 F.3d 134 (CRIT v. NIGC), held that NIGC lacked authority to enforce 
or promulgate Class III MICS. Since that time, the Class III MICS have 
remained untouched. Technology has advanced rapidly, though, making 
some standards obsolete and introducing new areas of risk not 
contemplated by the outdated standards. And yet, many tribal-state 
compacts--even those entered into since 2006--continue to adopt NIGC 
Class III MICS by reference.

II. Development of the Rule

    In light of the ruling in CRIT v. NIGC and recognizing the 
industry's need for updated standards, the NIGC sought comment on what 
to do with the outdated standards still remaining in the regulations 
and whether to draft updated, non-binding guidance for Class III MICS. 
Between 2015 and 2016, over

[[Page 39878]]

forty tribes provided comment and overwhelmingly supported the NIGC 
proposal for non-binding guidance. Many also supported keeping the 
existing 542 regulations in the Code of Federal Regulations, even 
though they would be unenforceable, to minimize impacts on tribal/state 
compacts that incorporate them by reference. Additionally, the 
Commission sent letters to state gaming regulators on June 14, 2017, 
requesting comment on the draft guidance. One responded with 
recommendations.
    In light of these comments, the Commission has developed non-
binding guidance for Class III MICS and is suspending the existing part 
542 regulations. Doing so will leave the existing regulations ``on the 
books,'' but with an editorial note stating that they are not 
enforceable. The updated guidance document for Class III MICS is 
available on the NIGC website at www.nigc.gov. This guidance is not 
intended to modify or amend any terms in a state compact.
    Because the document will be guidance instead of regulations, NIGC 
will be able to keep it updated and adapt much more quickly to changes 
in the industry.

III. Regulatory Matters

Notice and Comment

    Typically, the suspension of Agency regulations would require the 
Agency to follow the notice and comment process mandated by the 
Administrative Procedure Act (APA). However, the APA permits agencies 
to finalize some rules without first publishing a proposed rule in the 
Federal Register. This exception is limited to cases where the agency 
has ``good cause'' to find that the notice-and-comment process would be 
``impracticable, unnecessary, or contrary to the public interest.'' In 
this case, because the D.C. Circuit has ruled that the NIGC may not 
enforce its Class III MICS, or even maintain them as agency 
regulations, the NIGC has good cause to find that the notice and 
comment period is unnecessary and may directly publish a final rule 
suspending the Class III MICS regulations. The NIGC did not appeal the 
Circuit court's decision to the United States Supreme Court, so it is 
the law of the land and the NIGC has no discretion in regard to 
following the court's mandates.

Regulatory Flexibility Act

    The 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 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 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

    Suspending part 542 also suspends any information collection 
requirements contained within. Therefore, no detailed statement is 
required pursuant to the Paperwork Reduction Act, 44 U.S.C. 3501, et 
seq.

Tribal Consultation

    The National Indian Gaming Commission is committed to fulfilling 
its tribal consultation obligations--whether directed by statute or 
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.
    On February 26, 2015, the Commission announced consultation and 
sought comments over its plans to draft updated, non-mandatory Class 
III MICS guidance and proposal to withdraw the part 542 regulations. 
The Commission held four in-person and one telephonic consultation 
sessions. The consultation and comment period ended on February 23, 
2016. Over forty tribes commented on the plan. As a result of the 
comments, the Commission, on November 22, 2016, announced its proposal 
to suspend the part 542 regulations and issue updated, non-mandatory 
Class III MICS guidance. The Commission developed and shared a draft of 
the guidance and held six in-person consultation sessions. The 
Commission received comments through July 2017.

List of Subjects in 25 CFR Part 542

    Accounting, Administrative practice and procedure, Gambling, 
Indian--Indian lands, Reporting and recordkeeping requirements.

    For the reasons discussed in the preamble, the Commission amends 25 
CFR part 542 as follows:

PART 542--MINIMUM INTERNAL CONTROL STANDARDS

0
1. The authority for part 542 is revised to read as follows:

    Authority: 25 U.S.C. 2706(b)(10).


0
2. Section 542.1 is revised to read as follows:


Sec.  542.1  What does this part cover?

    (a) This part previously established the minimum internal control 
standards for gaming operations on Indian land.
    (b) This part is suspended pursuant to the decision in Colorado 
River Indian Tribes v. Nat'l Indian Gaming Comm'n, 466 F.3d 134 (D.C. 
Cir. 2006). Updated

[[Page 39879]]

non-binding guidance on Class III Minimum Internal Control Standards 
may be found at www.nigc.gov.

0
3. Effective September 27, 2018, part 542 is stayed.

    Dated: July 18, 2018.
Jonodev O. Chaudhuri,
Chairman.
    Dated: July 18, 2018.
Kathryn Isom-Clause,
Vice Chair.
[FR Doc. 2018-16254 Filed 8-10-18; 8:45 am]
 BILLING CODE 7565-01-P