B.

Congressional Direction to Consult with Indian Tribes

As for the NIGC's direction to consult on its increase for FY 2004, I make the following recommendations:

Formally Adopt Tribal Consultation Policy and Schedule. I urge the Commission to first formally adopt a policy of government-to-government consultation in accord with recent Presidential Executive Orders. In addition, I hope that the Commission will propose a schedule of consultation meetings with Indian country soon to discuss the implementation of the FY 2004 fee increase.

Provide Tribes with an Annual Detailed Budget. Prior to the first of these meetings, I hope that Chairman Hogen will provide NIGA, our Member Tribes, and the Senate Committee on Indian Affairs with a detailed proposed budget. A transparent budget showing where the money has gone in the past and where it's proposed to go in the future is the only way to begin productive consultation. The implementation of requiring annual detailed, written proposals that support new budget requests would be beneficial as would comprehensive reports to explain the implementation of prior year budgets.

Refine Operations Under Existing Authority. NIGC should use a portion of its increased funding to deploy new electronic fingerprinting technology at each of its regional offices, and make these machines available to prospective tribal employees. This will greatly expedite the turn around time for background checks. The NIGC should also support tribal licensing determinations with timely reviews, and exercise its existing authority to review the independent audits of Indian gaming facilities.

Expand on Self-Regulation. I hope that the NIGC will consider using a portion of those funds to provide increased Self-regulation for Class III Tribes -- The current regulations only permit self-regulation of Class II gaming. The Commission should expand these regulations to extend to class III gaming.

Resume Quarterly Consultations with Tribal Regulators. I hope the NIGC will resume quarterly consultations with Tribal regulators, which include providing tribes with training and technical assistance. In the past year or two, the NIGC's Regional offices brought these consultations in-house, but it's NIGA's hope that the Commission will resume the quarterly consultations. While this may be time-consuming for the Commission, it is extremely important to Tribes. This is an important core-mission.

Other Concerns. We understand that NIGC may want to establish new regional offices in both southern California and the Great Plains, and we urge NIGC to thoroughly consult with affected Tribes prior to the opening of those offices to ensure that resources are used to their best effect. Some other items of concern include the discontinuance of the NIGC biennial report, NIGC pay scales, and the need for a policy to promote hiring experienced tribal gaming regulators.

Finally, I would like to comment on recent statements by the Commission regarding their vision for the next three years. The proposal includes a number of recommended amendments to the Indian Gaming Regulatory Act.

Floating Fee Cap. The NIGC has expressed its intent to seek an amendment to IGRA that would amend the fee structure for the Commission. As stated above, for the past five years, the NIGC was funded at a level of $8 million each year - based on fees paid from Tribal governments. The recent amendment on the FY 2003 Appropriations bill increases the Commission's fee collection capabilities to $12 million - a 50% increase. I would like to restate my comment from that the NIGC be required to justify its budget annually to Congress and we believe that sound regulatory partnerships are fostered by accountability at the NIGC. Accordingly, we ask that the Commission submit a detailed budget for FY 2004 to Congress before proceeding with a legislative proposal to eliminate the statutory fee cap on its regulatory assessments of Indian Tribes. Again, the budget should recognize that Indian Tribes invest over $212 million for Federal, state and tribal regulatory systems annually and the tribal gaming regulatory agencies are the primary regulators. Clearly, with the NIGC receiving a 50% increase in FY 2004, there is no need for a further follow up amendment at this time.

Vendor Licensing Proposal. The NIGC has recently recommended that IGRA be amended to grant it authority to license vendors, consultants, and “any person associated or seeking to become associated with a tribal gaming operation". The NIGC should acknowledge that Indian Tribes are already undertaking such licensing and must respect tribal regulatory systems. Accordingly, I recommend that any vendor licensing initiative be conducted on a voluntary basis to assist Tribes where requested. It should not be used to put in place a new barrier to economic activity in Indian country. The NIGC has proved too slow in reviewing management contracts, and adding the responsibility of vendors, consultants, and others that work or wish to work with tribal gaming operations may prove too burdensome for both the Commission and tribal gaming operations.

NIGC Authority Over Class III Gaming. The Commission has also stated that it would like to amend IGRA to "clarify" its authority over class III gaming operations. The IGRA established the Tribal-State Compact Process to establish the regulatory framework for Class III gaming. The NIGC was tasked with the responsibility to review and approve tribal gaming ordinances, which the Chairman "shall" approve so long as they meet minimum statutory requirements. The reason for the narrow review of class III ordinances was to require the Commission to defer to the tribal-state compacting process. Accordingly, the NIGC should not seek additional authority, but should instead clarify – through regulation - that it will defer to tribal-state compacts to govern class III gaming and work with Indian Tribes on the basis of mutual consent, to promote positive standards in tribal gaming ordinances consistent with IGRA.

Affirm the Interior Department Alternative Compacting Regulations. Finally, we applaud the NIGC for its intention to seek an amendment that will correct the Supreme Court's decision in Seminole Tribe v. Florida, 116 S. Ct. 1114 (1996). I want to state for the record that any legislation to amend IGRA should include an amendment to provide a correction to the Seminole case. That case was decided in 1996, and continues to haunt many Tribes.

Congress, through IGRA, required State governments to negotiate class III gaming compacts with Tribes in good faith, and Tribes were permitted to sue States in federal court for failure to meet that obligation. The Supreme Court's decision in Seminole Tribe v. Florida frustrated Congress's intention by permitting States to raise a sovereign immunity defense to such suits. This in effect gives States a veto power over the compacting process - an outcome clearly not intended by Congress. The Interior Department has promulgated regulations for alternative procedures for Class III gaming in lieu of a compact where States fail to negotiate in good faith and where they raise sovereign immunity as a defense.

NIGA and its Member Tribes firmly believe that these regulations on this issue fully reflect the intent of Congress in enacting the IGRA and should be affirmed in federal legislation. Senator McCain stated at the time of the passage of the Act:

I would like to serve notice that I, Senator Inouye, Senator Evans,
and other members of the Senate Select Committee on Indian
Affairs will be watching very carefully what happens in Indian
Country. If the states take advantage of this relationship, the so-
called compacts, then I would be one of the first to appear before
my colleagues and work to repeal this legislation because we must
ensure that the Indians are given a level playing field that are the
same as the states in which they reside and will not be prevented
from doing so because of the self-interest of the states in which
they reside.

Senator John McCain, Cong. Rec. (Sept. 15, 1988). Now is the appropriate time for Congress to legislatively affirm those regulations, and I hope that the Committee will consider including such a provision in any IGRA amendment introduced this Session. Congress never intended the States to have a veto power over the compacting process.

CONCLUSION

In conclusion, I appreciate the recognition that this Committee has given to the commitment of Indian Tribes to regulation. However, I hope that Congress as a whole will take formal note of the hard work, tireless hours, and hundreds of millions of dollars that tribal governments and their employees spend on regulating Indian gaming operations. The ethnocentric view that Indian gaming is only being regulated by the 70 employees and $8 million that fund the NIGC is not valid, it ignores the hard work that's being done by thousands of Indian regulatory employees, and it should be put to rest.

Finally, I urge the NGIC to adhere to a sound policy of government-to-government consultation and increased communication between Tribes and the NIGC. Such a practice will only serve to further strengthen the regulation of Indian gaming.

Mr. Chairman and Members of the Committee this concludes my remarks this morning. Once again thank you for providing me this opportunity to testify. I am available for any questions.