25 U.S.C. § 2711 — Management contracts

Page 505 TITLE 25—INDIANS § 2711 whether a State has negotiated in good faith, the court— (I) may take into account the public inter- est, public safety, criminality, financial integ- rity, and adverse economic impacts on exist- ing gaming activities, and (II) shall consider any demand by the State for direct taxation of the Indian tribe or of any Indian lands as evidence that the State has not negotiated in good faith. (iv) If a State and an Indian tribe fail to con- clude a Tribal-State compact governing the con- duct of gaming activities on the Indian lands subject to the jurisdiction of such Indian tribe within the 60-day period provided in the order of a court issued under clause (iii), the Indian tribe and the State shall each submit to a mediator appointed by the court a proposed compact that represents their last best offer for a compact. The mediator shall select from the two proposed compacts the one which best comports with the terms of this chapter and any other applicable Federal law and with the findings and order of the court. (v) The mediator appointed by the court under clause (iv) shall submit to the State and the In- dian tribe the compact selected by the mediator under clause (iv). (vi) If a State consents to a proposed compact during the 60-day period beginning on the date on which the proposed compact is submitted by the mediator to the State under clause (v), the proposed compact shall be treated as a Tribal- State compact entered into under paragraph (3). (vii) If the State does not consent during the 60-day period described in clause (vi) to a pro- posed compact submitted by a mediator under clause (v), the mediator shall notify the Sec- retary and the Secretary shall prescribe, in con- sultation with the Indian tribe, procedures— (I) which are consistent with the proposed compact selected by the mediator under clause (iv), the provisions of this chapter, and the rel- evant provisions of the laws of the State, and (II) under which class III gaming may be conducted on the Indian lands over which the Indian tribe has jurisdiction. (8)(A) The Secretary is authorized to approve any Tribal-State compact entered into between an Indian tribe and a State governing gaming on Indian lands of such Indian tribe. (B) The Secretary may disapprove a compact described in subparagraph (A) only if such com- pact violates— (i) any provision of this chapter, (ii) any other provision of Federal law that does not relate to jurisdiction over gaming on Indian lands, or (iii) the trust obligations of the United States to Indians. (C) If the Secretary does not approve or dis- approve a compact described in subparagraph (A) before the date that is 45 days after the date on which the compact is submitted to the Sec- retary for approval, the compact shall be consid- ered to have been approved by the Secretary, but only to the extent the compact is consistent with the provisions of this chapter. (D) The Secretary shall publish in the Federal Register notice of any Tribal-State compact that is approved, or considered to have been ap- proved, under this paragraph. (9) An Indian tribe may enter into a manage- ment contract for the operation of a class III gaming activity if such contract has been sub- mitted to, and approved by, the Chairman. The Chairman’s review and approval of such con- tract shall be governed by the provisions of sub- sections (b), (c), (d), (f), (g), and (h) of section 2711 of this title. (e) Approval of ordinances For purposes of this section, by not later than the date that is 90 days after the date on which any tribal gaming ordinance or resolution is submitted to the Chairman, the Chairman shall approve such ordinance or resolution if it meets the requirements of this section. Any such ordi- nance or resolution not acted upon at the end of that 90-day period shall be considered to have been approved by the Chairman, but only to the extent such ordinance or resolution is con- sistent with the provisions of this chapter. (Pub. L. 100–497, § 11, Oct. 17, 1988, 102 Stat. 2472.) Editorial Notes REFERENCES IN TEXT This chapter, referred to in subsecs. (a), (d)(7)(B)(iv), (vii)(I), (8)(B)(i), (C), and (e), was in the original ‘‘this Act’’, meaning Pub. L. 100–497, Oct. 17, 1988, 102 Stat. 2467, known as the Indian Gaming Regulatory Act, which is classified principally to this chapter. For com- plete classification of this Act to the Code, see Short Title note set out under section 2701 of this title and Tables. CONSTITUTIONALITY For information regarding the constitutionality of certain provisions of this section, see the Table of Laws Held Unconstitutional in Whole or in Part by the Su- preme Court on the Constitution Annotated website, constitution.congress.gov. § 2711. Management contracts (a) Class II gaming activity; information on oper- ators (1) Subject to the approval of the Chairman, an Indian tribe may enter into a management contract for the operation and management of a class II gaming activity that the Indian tribe may engage in under section 2710(b)(1) of this title, but, before approving such contract, the Chairman shall require and obtain the following information: (A) the name, address, and other additional pertinent background information on each person or entity (including individuals com- prising such entity) having a direct financial interest in, or management responsibility for, such contract, and, in the case of a corpora- tion, those individuals who serve on the board of directors of such corporation and each of its stockholders who hold (directly or indirectly) 10 percent or more of its issued and out- standing stock; (B) a description of any previous experience that each person listed pursuant to subpara- graph (A) has had with other gaming contracts with Indian tribes or with the gaming industry generally, including specifically the name and address of any licensing or regulatory agency Page 506 TITLE 25—INDIANS § 2711 with which such person has had a contract re- lating to gaming; and (C) a complete financial statement of each person listed pursuant to subparagraph (A). (2) Any person listed pursuant to paragraph (1)(A) shall be required to respond to such writ- ten or oral questions that the Chairman may propound in accordance with his responsibilities under this section. (3) For purposes of this chapter, any reference to the management contract described in para- graph (1) shall be considered to include all col- lateral agreements to such contract that relate to the gaming activity. (b) Approval The Chairman may approve any management contract entered into pursuant to this section only if he determines that it provides at least— (1) for adequate accounting procedures that are maintained, and for verifiable financial re- ports that are prepared, by or for the tribal governing body on a monthly basis; (2) for access to the daily operations of the gaming to appropriate tribal officials who shall also have a right to verify the daily gross revenues and income made from any such trib- al gaming activity; (3) for a minimum guaranteed payment to the Indian tribe that has preference over the retirement of development and construction costs; (4) for an agreed ceiling for the repayment of development and construction costs; (5) for a contract term not to exceed five years, except that, upon the request of an In- dian tribe, the Chairman may authorize a con- tract term that exceeds five years but does not exceed seven years if the Chairman is satisfied that the capital investment required, and the income projections, for the particular gaming activity require the additional time; and (6) for grounds and mechanisms for termi- nating such contract, but actual contract ter- mination shall not require the approval of the Commission. (c) Fee based on percentage of net revenues (1) The Chairman may approve a management contract providing for a fee based upon a per- centage of the net revenues of a tribal gaming activity if the Chairman determines that such percentage fee is reasonable in light of sur- rounding circumstances. Except as otherwise provided in this subsection, such fee shall not exceed 30 percent of the net revenues. (2) Upon the request of an Indian tribe, the Chairman may approve a management contract providing for a fee based upon a percentage of the net revenues of a tribal gaming activity that exceeds 30 percent but not 40 percent of the net revenues if the Chairman is satisfied that the capital investment required, and income projec- tions, for such tribal gaming activity require the additional fee requested by the Indian tribe. (d) Period for approval; extension By no later than the date that is 180 days after the date on which a management contract is submitted to the Chairman for approval, the Chairman shall approve or disapprove such con- tract on its merits. The Chairman may extend the 180-day period by not more than 90 days if the Chairman notifies the Indian tribe in writ- ing of the reason for the extension. The Indian tribe may bring an action in a United States dis- trict court to compel action by the Chairman if a contract has not been approved or disapproved within the period required by this subsection. (e) Disapproval The Chairman shall not approve any contract if the Chairman determines that— (1) any person listed pursuant to subsection (a)(1)(A) of this section— (A) is an elected member of the governing body of the Indian tribe which is the party to the management contract; (B) has been or subsequently is convicted of any felony or gaming offense; (C) has knowingly and willfully provided materially important false statements or in- formation to the Commission or the Indian tribe pursuant to this chapter or has refused to respond to questions propounded pursuant to subsection (a)(2); or (D) has been determined to be a person whose prior activities, criminal record if any, or reputation, habits, and associations pose a threat to the public interest or to the effective regulation and control of gaming, or create or enhance the dangers of unsuit- able, unfair, or illegal practices, methods, and activities in the conduct of gaming or the carrying on of the business and financial arrangements incidental thereto; (2) the management contractor has, or has attempted to, unduly interfere or influence for its gain or advantage any decision or process of tribal government relating to the gaming activity; (3) the management contractor has delib- erately or substantially failed to comply with the terms of the management contract or the tribal gaming ordinance or resolution adopted and approved pursuant to this chapter; or (4) a trustee, exercising the skill and dili- gence that a trustee is commonly held to, would not approve the contract. (f) Modification or voiding The Chairman, after notice and hearing, shall have the authority to require appropriate con- tract modifications or may void any contract if he subsequently determines that any of the pro- visions of this section have been violated. (g) Interest in land No management contract for the operation and management of a gaming activity regulated by this chapter shall transfer or, in any other manner, convey any interest in land or other real property, unless specific statutory author- ity exists and unless clearly specified in writing in said contract. (h) Authority The authority of the Secretary under section 81 of this title, relating to management con- tracts regulated pursuant to this chapter, is hereby transferred to the Commission. (i) Investigation fee The Commission shall require a potential con- tractor to pay a fee to cover the cost of the in- Page 507 TITLE 25—INDIANS § 2713 vestigation necessary to reach a determination required in subsection (e) of this section. (Pub. L. 100–497, § 12, Oct. 17, 1988, 102 Stat. 2479.) Editorial Notes REFERENCES IN TEXT This chapter, referred to in subsecs. (a)(3), (e)(1)(C), (3), (g), and (h), was in the original ‘‘this Act’’, meaning Pub. L. 100–497, Oct. 17, 1988, 102 Stat. 2467, known as the Indian Gaming Regulatory Act, which is classified principally to this chapter. For complete classification of this Act to the Code, see Short Title note set out under section 2701 of this title and Tables. § 2712. Review of existing ordinances and con- tracts (a) Notification to submit As soon as practicable after the organization of the Commission, the Chairman shall notify each Indian tribe or management contractor who, prior to October 17, 1988, adopted an ordi- nance or resolution authorizing class II gaming or class III gaming or entered into a manage- ment contract, that such ordinance, resolution, or contract, including all collateral agreements relating to the gaming activity, must be sub- mitted for his review within 60 days of such no- tification. Any activity conducted under such ordinance, resolution, contract, or agreement shall be valid under this chapter, or any amend- ment made by this chapter, unless disapproved under this section. (b) Approval or modification of ordinance or res- olution (1) By no later than the date that is 90 days after the date on which an ordinance or resolu- tion authorizing class II gaming or class III gaming is submitted to the Chairman pursuant to subsection (a), the Chairman shall review such ordinance or resolution to determine if it conforms to the requirements of section 2710(b) of this title. (2) If the Chairman determines that an ordi- nance or resolution submitted under subsection (a) conforms to the requirements of section 2710(b) of this title, the Chairman shall approve it. (3) If the Chairman determines that an ordi- nance or resolution submitted under subsection (a) does not conform to the requirements of sec- tion 2710(b) of this title, the Chairman shall pro- vide written notification of necessary modifica- tions to the Indian tribe which shall have not more than 120 days to bring such ordinance or resolution into compliance. (c) Approval or modification of management con- tract (1) Within 180 days after the submission of a management contract, including all collateral agreements, pursuant to subsection (a), the Chairman shall subject such contract to the re- quirements and process of section 2711 of this title. (2) If the Chairman determines that a manage- ment contract submitted under subsection (a), and the management contractor under such con- tract, meet the requirements of section 2711 of this title, the Chairman shall approve the man- agement contract. (3) If the Chairman determines that a contract submitted under subsection (a), or the manage- ment contractor under a contract submitted under subsection (a), does not meet the require- ments of section 2711 of this title, the Chairman shall provide written notification to the parties to such contract of necessary modifications and the parties shall have not more than 120 days to come into compliance. If a management con- tract has been approved by the Secretary prior to October 17, 1988, the parties shall have not more than 180 days after notification of nec- essary modifications to come into compliance. (Pub. L. 100–497, § 13, Oct. 17, 1988, 102 Stat. 2481.) Editorial Notes REFERENCES IN TEXT This chapter, referred to in subsec. (a), was in the original ‘‘this Act’’, meaning Pub. L. 100–497, Oct. 17, 1988, 102 Stat. 2467, known as the Indian Gaming Regu- latory Act, which is classified principally to this chap- ter. For complete classification of this Act to the Code, see Short Title note set out under section 2701 of this title and Tables. § 2713. Civil penalties (a) Authority; amount; appeal; written complaint (1) Subject to such regulations as may be pre- scribed by the Commission, the Chairman shall have authority to levy and collect appropriate civil fines, not to exceed $25,000 per violation, against the tribal operator of an Indian game or a management contractor engaged in gaming for any violation of any provision of this chapter, any regulation prescribed by the Commission pursuant to this chapter, or tribal regulations, ordinances, or resolutions approved under sec- tion 2710 or 2712 of this title. (2) The Commission shall, by regulation, pro- vide an opportunity for an appeal and hearing before the Commission on fines levied and col- lected by the Chairman. (3) Whenever the Commission has reason to be- lieve that the tribal operator of an Indian game or a management contractor is engaged in ac- tivities regulated by this chapter, by regula- tions prescribed under this chapter, or by tribal regulations, ordinances, or resolutions, approved under section 2710 or 2712 of this title, that may result in the imposition of a fine under sub- section (a)(1), the permanent closure of such game, or the modification or termination of any management contract, the Commission shall provide such tribal operator or management contractor with a written complaint stating the acts or omissions which form the basis for such belief and the action or choice of action being considered by the Commission. The allegation shall be set forth in common and concise lan- guage and must specify the statutory or regu- latory provisions alleged to have been violated, but may not consist merely of allegations stated in statutory or regulatory language. (b) Temporary closure; hearing (1) The Chairman shall have power to order temporary closure of an Indian game for sub- stantial violation of the provisions of this chap- ter, of regulations prescribed by the Commission pursuant to this chapter, or of tribal regula-