APRIL 1, 1998

GOOD MORNING, MR. CHAIRMAN AND MEMBERS OF THE COMMITTEE. MY NAME IS KEVIN GOVER, ASSISTANT SECRETARY FOR INDIAN AFFAIRS AT THE DEPARTMENT OF THE INTERIOR. I AM PLEASED TO OFFER THE VIEWS OF THE DEPARTMENT ON S. 1870, A BILL TO AMEND THE INDIAN GAMING REGULATORY ACT OF 1988.

NEARLY TEN YEARS AGO CONGRESS ENACTED THE INDIAN GAMING REGULATORY ACT TO PROVIDE A REGULATORY FRAMEWORK THROUGH WHICH TRIBES COULD EXERCISE THEIR RIGHT TO CONDUCT GAMING ON INDIAN LANDS. CONGRESS ALSO GRANTED STATES A ROLE IN THE REGULATION OF INDIAN GAMING THROUGH THE TRIBAL-STATE COMPACT PROCESS. GAMING HAS ENABLED NEARLY 200 TRIBES TO GENERATE THEIR OWN REVENUE AND REDUCE THEIR RELIANCE ON FEDERAL DOLLARS TO IMPLEMENT A VARIETY OF TRIBAL INITIATIVES. TRIBES ARE USING GAMING REVENUES TO PROVIDE HEALTH, HOUSING, EDUCATION, AND OTHER GOVERNMENTAL SERVICES TO THEIR PEOPLE. TRIBAL GAMING REVENUES HAVE STRENGTHENED PREVIOUSLY FALTERING TRIBAL ECONOMIES, DRAMATICALLY INCREASED TRIBAL EMPLOYMENT RATES, AND REDUCED STATE WELFARE RATES IN SURROUNDING COMMUNITIES. AFTER CENTURIES OF ECONOMIC STAGNATION, INDIAN TRIBES HAVE SEEN GAMING DRAW CUSTOMERS AND BUSINESSES TO THEIR OFTEN REMOTE LANDS. INDIAN GAMING HAS PROVEN TO BE A SUCCESSFUL MEANS OF

STABILIZING AND IMPROVING TRIBAL SELF-GOVERNMENT AND ADDRESSING VARIOUS SOCIAL AND ECONOMIC PROBLEMS. BY WAY OF EXAMPLE, I NOTE THAT IN MICHIGAN, ACCORDING TO A 1994 STUDY ON THE ECONOMIC IMPACT OF MICHIGAN INDIAN GAMING, THE TRIBAL UNEMPLOYMENT RATE IN 1985 WAS 65%. BY 1994, THE UNEMPLOYMENT RATE HAD DROPPED TO 5%.

TODAY I REITERATE THE DEPARTMENT'S STRONG SUPPORT FOR THE RIGHT OF INDIAN TRIBES TO ENGAGE IN GAMING ACTIVITIES FOR THE PURPOSE OF DEVELOPING AND STABILIZING TRIBAL ECONOMIES. WE VIEW THE PROPOSED AMENDMENTS IN S. 1870 AS EVIDENCE OF CONGRESS' CONTINUED SUPPORT OF TRIBAL ECONOMIC DEVELOPMENT, TRIBAL SELF-SUFFICIENCY, AND HEALTHY INDIAN TRIBAL GOVERNMENTS. FOR THAT REASON, WE SUPPORT THE GENERAL INTENT OF THE PROPOSED BILL.

AS YOU KNOW, THE SECRETARY'S STATUTORY RESPONSIBILITIES UNDER THE INDIAN GAMING REGULATORY ACT ARE QUITE SPECIFIC AND INCLUDE THE APPROVAL OF TRIBAL/STATE COMPACTS; PLACING LAND INTO TRUST STATUS FOR GAMING; APPROVAL OF REVENUE ALLOCATION PLANS FOR PER CAPITA PAYMENTS OF GAMING NET REVENUES TO TRIBAL MEMBERS; APPROVAL OF AGREEMENTS FOR SERVICES RELATIVE TO INDIAN LANDS UNDER 25 U.S.C. SECTION 81; APPROVAL OF GAMING RELATED LAND LEASES; TWO-PART DETERMINATIONS UNDER SECTION 20 OF IGRA; AND PROMULGATING PROCEDURES FOR CLASS III GAMING IN CERTAIN CIRCUMSTANCES WHERE A TRIBE AND STATE CANNOT AGREE ON THE TERMS OF A COMPACT. THE PROPOSED AMENDMENTS DO NOT ALTER THESE SECRETARIAL FUNCTIONS EXCEPT FOR THE PROPOSED ROLE OF THE SECRETARY IN NEGOTIATED RULEMAKING UNDER SECTION 8 TO DEVELOP MINIMUM FEDERAL STANDARDS, AND THE ELIMINATION OF THE TWO-PART TEST UNDER SECTION 20 OF IGRA.

WE HAVE THE FOLLOWING COMMENTS ON KEY FEATURES OF THE BILL:

FIRST, THE BILL PROPOSES TO EXPAND THE REGULATORY AND ENFORCEMENT AUTHORITIES OF THE NATIONAL INDIAN GAMING COMMISSION OVER ALL ASPECTS OF INDIAN GAMING. AS A GENERAL PROPOSITION, WE AGREE THAT AN EXPANDED ROLE FOR THE COMMISSION IS WARRANTED IN LIGHT OF THE GROWTH OF THE INDIAN GAMING INDUSTRY SINCE THE ENACTMENT OF IGRA IN 1988. WE DEFER TO THE DEPARTMENT OF JUSTICE AND THE NATIONAL INDIAN GAMING COMMISSION ON THE EXPANDED SCOPE OF ENFORCEMENT AUTHORITY DELEGATED TO THE COMMISSION IN THE BILL, BECAUSE OF THEIR EXPERTISE IN THIS AREA. WE DO RECOMMEND THAT THE BILL BE AMENDED TO PROVIDE THAT THE NATIONAL INDIAN GAMING COMMISSION BE A SEPARATE AGENCY, RATHER THAN ONE EXISTING UNDER THE DEPARTMENT OF THE INTERIOR.

SECOND, THE BILL REQUIRES THE SECRETARY TO ESTABLISH A NEGOTIATED RULEMAKING COMMITTEE, IN CONSULTATION WITH THE ATTORNEY GENERAL AND THE COMMISSION, TO PROMULGATE MINIMUM FEDERAL STANDARDS RELATING TO BACKGROUND INVESTIGATIONS, INTERNAL CONTROL SYSTEMS, AND LICENSING STANDARDS. THE DEPARTMENT BELIEVES SUCH STANDARDS WILL HELP ADDRESS CONCERNS RELATING TO PREVENTING INFILTRATION OF ORGANIZED CRIME AND OTHER CORRUPTING INFLUENCES ON INDIAN GAMING. WE ALSO BELIEVE, HOWEVER, THAT THE NATIONAL INDIAN GAMING COMMISSION IS THE PROPER AGENCY TO HAVE THE LEAD ROLE IN THE DEVELOPMENT OF SUCH STANDARDS BECAUSE THESE STANDARDS FALL UNDER THE COMMISSION'S SOLE JURISDICTION.

THIRD, THE BILL PROVIDES FOR SECRETARIAL AUTHORITY TO END AN IMPASSE IN NEGOTIATIONS BETWEEN A STATE AND A TRIBE ON A CLASS III TRIBAL-STATE COMPACT. THE DEPARTMENT CURRENTLY IS PROPOSING

REGULATIONS THAT ASSERT THE SECRETARY'S AUTHORITY TO MEDIATE WHEN SUCH AN IMPASSE OCCURS. SINCE AN ACTION IN COURT IS NO LONGER AVAILABLE AS A RESULT OF SEMINOLE V. STATE OF FLORIDA, EITHER THE DEPARTMENT'S PROPOSED RULES OR LEGISLATIVE ACTION IS NECESSARY TO CREATE A MEANS FOR SUCH DISPUTE RESOLUTION. ALTHOUGH THE PROBLEM CREATED BY SEMINOLE MAY BE ADDRESSED THROUGH EITHER LEGISLATIVE OR ADMINISTRATIVE MEANS, ANY ATTEMPT TO DO SO ADMINISTRATIVELY WILL DRAW LEGAL CHALLENGES -- CHALLENGES THAT MAY TAKE YEARS TO RESOLVE IN THE COURTS. CONGRESS, HOWEVER, COULD DEFINITIVELY RESOLVE THIS PROBLEM, THEREBY OBVIATING YEARS OF LITIGATION. FOR THIS REASON, THE ADMINISTRATION BELIEVES THAT A LEGISLATIVE SOLUTION TO THIS PROBLEM WOULD BE PREFERABLE. THE ADMINISTRATION, THEREFORE, STRONGLY SUPPORTS THE INTENT OF THIS PROVISION. IF, HOWEVER, CONGRESS IS UNABLE TO CRAFT A LEGISLATIVE SOLUTION, THEN WE WILL CONTINUE OUR EFFORTS TO REACH A SOLUTION ADMINISTRATIVELY.

FINALLY, THE BILL PROPOSES TO REMOVE THE EXCEPTIONS FOR TRIBAL GAMING ON LAND ACQUIRED AFTER PASSAGE OF THE INITIAL INDIAN GAMING REGULATOR ACT. THE DEPARTMENT OPPOSES THIS SECTION. IT IS CRITICALLY IMPORTANT THAT RESTORED AND NEWLY RECOGNIZED TRIBES BE ALLOWED THE OPPORTUNITY FOR ECONOMIC DEVELOPMENT ON AN EQUAL BASIS WITH EXISTING TRIBES. IN ADDITION, SINCE LOCATION IS THE SINGLE MOST IMPORTANT FACTOR IN THE SUCCESS OF ANY BUSINESS, WHEN A TRIBE, A LOCAL COMMUNITY, AND A STATE GOVERNOR FIND THAT AN OFF RESERVATION LOCATION FOR AN INDIAN GAMING FACILITY WOULD BE A MUTUAL BENEFIT, THERE SHOULD BE A MECHANISM TO PERMIT SUCH AN ESTABLISHMENT. WE BELIEVE THAT THE CURRENT IGRA LANGUAGE ON USING NEWLY ACQUIRED, OFF-RESERVATION LAND FOR GAMING SHOULD NOT BE

CHANGED. WE HAVE APPLIED THIS AUTHORITY VERY SPARINGLY, ONLY IN CONSULTATION WITH STATE AND LOCAL OFFICIALS AND WITH THE CONCURRENCE OF THE GOVERNOR, AND WE WILL CONTINUE TO DO SO.

AS YOU KNOW, THE DEPARTMENT ONLY RECENTLY RECEIVED A COPY OF THE BILL AND WILL SUPPLEMENT THIS TESTIMONY WITH TECHNICAL COMMENTS. AS YOUR WORK ON THE BILL PROGRESSES, THE DEPARTMENT LOOKS FORWARD TO WORKING WITH THE COMMITTEE AND YOUR STAFF TO RESOLVE THE IMPORTANT ISSUES RAISED IN THIS BILL. I AM HAPPY TO ANSWER ANY QUESTIONS THE COMMITTEE MAY HAVE. THANK YOU.