S1295DEC16

TheWeekInCongress.com

Week Ending December 16, 2005

S.1295 A bill to amend the Indian Gaming Regulatory Act to provide for accountability and funding of the National Indian Gaming Commission.

BRIEF

The bill aims to scrutinize the National Indian Gaming Commission oversight over Indian gambling activities and raises the amount the Indian gaming industry pays to the Federal government for oversight.

The original fee was $2 million and was raised to its’ recent lever of $8 million. The next increase was authorized to be $12 million but this bill would provide that the amount the industry pays the Federal government would be based on .08 percent of the industry’s gross earnings. An example made in the accompanying report noted that the change would produce $15 million in revenue from the industry when gross revenues equaled $19.4 billion in 2004 multiplied by the .08 percent.

Despite the increase in revenue from the Industry the bill is scored as cost and revenue neutral.

Sponsor: Representative John McCain (R-AZ)

Vote: Passed Senate by Unanimous Consent December 15, 2005

Cost to the taxpayers: “CBO estimates that implementing S. 1295 would increase direct spending by $7 million in 2006 and about $230 million over the 2006-2015 period. CBO also estimates that enacting the legislation would increase revenues by $7 million in 2006 and about $230 million over the 2006-2015 period.”

MORE INFORMATION

BACKGROUND

When IGRA was enacted in 1988, Congress created the NIGC to provide Federal oversight of the regulation of Indian gaming. Originally, the IGRA provided for the NIGC to be funded by a blend of Federally appropriated monies and fees assessed on Indian gaming operations. The total fees assessed were capped at $2 million.

In 1997, Congress raised the fee assessment cap to $8 million. Since Fiscal Year 1998, no Federal funds have been appropriated for the operation of the NIGC. To address the rising budgetary needs of the agency tasked with oversight of the fast-growing Indian gaming industry, the 108th Congress, through appropriations legislation, authorized an increase in the fee cap to $12 million for fiscal 2005 and 2006. These year to year `stop-gap' appropriations measures have helped the agency meet its regulatory responsibilities but have impeded long-term budgeting.

The National Indian Gaming Commission Accountability Act of 2005 is designed to allow the agency to increase fee collection in proportion to the size of the industry it oversees. With fees capped at .08 percent of the industry's gross revenue, the agency's funding would float in proportion to the revenues of the Indian gaming industry, expanding or contracting as the Indian gaming industry grew or diminished. For example, had fees been capped at 0.08 percent for calendar year 2004, when reported industry gross revenues exceeded $19.4 billion, the agency would have been authorized to collect fees of up to $15.5 million.

S. 1295 does not, of course, compel the NIGC to annually collect the full amount allowable. Continuing careful stewardship of tribes' fee payments, such has been exercised recently by the Commission, is encouraged. The agency must be free, however, to respond to continued growth in Indian gaming with adequate funds to provide oversight.

As the agency's needs have grown, so has scrutiny of the agency by tribes and other interested parties. This legislation therefore increases not only the agency's funding but also its accountability by directing that the NIGC be subject to GPRA. Heretofore the Commission has not been subject to GPRA pursuant to an exemption that allows OMB to exempt agencies with outlays under $20 million from GPRA's requirements. 3

[Footnote] Because the NIGC's budget has never been more than $12 million, the NIGC OMB exemption from GPRA's requirements has been applied. S. 1295 requires, however, that NIGC be subject to GPRA.

[Footnote 3: Pub. L. 103-62, Sec. 4(b).]

Congress enacted GPRA in an effort to strengthen public confidence in government and to assist Federal managers in

improving program efficiency and effectiveness. 4

[Footnote] That act requires that Federal agencies submit to Congress strategic five-year plans, annual performance plans, and performance reports. It specifically requires that, when developing a strategic plan, an agency must not only consult with Congress, but also `solicit and consider the views and suggestions of those entities potentially affected by or interested in such a plan.' 5

[Footnote] In the case of the Commission, those affected entities include tribes.

[Footnote 4: Pub. L. 103-62, Sec. 2.]

[Footnote 5: 5 U.S.C. 306(d).]

There are some well defined limits as to the degree of solicitation required by GPRA itself, including the caveat that the solicitation and consideration of views does not mean that the agency's plan must be agreeable to all parties. GPRA provides that `the function and activities of this section shall be considered to be inherently governmental functions. The drafting of strategic plans under this section shall be performed only by Federal employees.' 6

[Footnote] In the case of a regulating agency such as NIGC, creation of any given plan can be improved by consulting with, but should not be compelled by, the regulated entities, notwithstanding a policy of government-to-government relationship between the Federal and tribal governments.

[Footnote 6: 5 U.S.C. 306(e).]

Additionally, it is to be noted that the NIGC is an independent regulatory agency. This status has ramifications, including, that the agency is not governed by Executive Order 13175, which compels agencies other than independent regulatory agencies to consult tribal officials in the development of regulatory policies that have tribal implications. The Executive Order encourages independent agencies to observe its precepts, however, and the Committee notes with approval that the Commission, through its current consultation policy, has endeavored to do so.

In keeping with the long-standing Federal policy of tribal self-determination, and the corollary policy of maintaining government-to-government relations, the Committee strongly encourages the NIGC, consistent with its regulatory responsibilities, to work with tribal governments on a government-to-government basis in the development of regulatory policies, standards and definitions, which may include, where appropriate, the use of tribal advisory committees and negotiated rulemaking.

S. 1295 also requires that the agency's GPRA plans address the need for technical assistance to tribal gaming operations. In the past, the NIGC has provided training and technical assistance to tribes and tribal gaming operations. Such assistance plays a critical role in supporting IGRA's purposes by strengthening the Indian gaming industry, which in turn will lead to strengthened tribal governments. Including technical assistance in its regulatory plans will help both the agency and tribes focus on the importance of assistance in effectuating IGRA's goals.

SUMMARY OF MAJOR PROVISIONS

The purpose in amending Pub. L. 100-447 through S. 1295 is two-fold: one, to hold NIGC accountable for its funding and two, to correlate NIGC funding with the size of the industry it regulates. The amendment thus requires compliance with the Government Performance and Results Act (Pub. L. 103-62; 107 Stat. 286). Compliance with this requirement will result in the agency writing strategic and performance plans for its programs. The amendment also specifies that performance plans address tribes' needs for technical assistance in regulating their gaming operations.

The amendment also deletes IGRA's current cap on NIGC funding at $8 million. In order to make the budget more responsive to the growth of the Indian gaming industry, the amendment replaces the cap with a formula whereby the agency may collect fees not to exceed .08 percent of the gross gaming revenues of all gaming operations.

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