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									            NATIONAL COUNCIL OF LEGISLATORS FROM GAMING STATES
                    STATE-FEDERAL RELATIONS COMMITTEE
                          BOSTON, MASSACHUSETTS
                             FRIDAY, JUNE 2, 2006
                               DRAFT MINUTES

The State-Federal Relations Committee of the National Council of Legislators from Gaming
States (NCLGS) met at the Boston Park Plaza Hotel & Towers in Boston, Massachusetts, on
Friday, June 2, 2006, at 3:00 p.m.

Representative Michael Caron from Connecticut, Chair of the Committee, presided.

Other members of the Committee present were:
       Rep. James Buskey, AL
       Rep. Kevin Ryan, CT
       Sen. Steven Geller, FL
       Sen. Richard Lerblance, OK
       Rep. Tim Solobay, PA

Others present were:
       Susan Nolan, Nolan Associates, NCLGS Executive Director


MINUTES
The Committee voted unanimously to accept, as submitted, the minutes of its January 6, 2006,
meeting in San Diego, California.


FEDERAL GAMING ACTIVITY
WASHINGTON POLITICAL CLIMATE
Mr. Slade reported that the Bush administration has been dealing with an unpopular war,
escalating gas prices, and an immigration crisis. He said administration difficulties continue, and
said that it would be a tough election for incumbents. He said that most political experts believe
that there is at least a 45 to 50 percent chance that the Democrats will gain control of the House
and that there is a 70 to 75 percent chance the Senate will stay Republican.

Mr. Slade said that federal bills passed in the past six months include
    ethics reform Legislation in Conference
    extending tax cuts
    an energy bill signed into law
    difficult House and Senate immigration bills
   
Mr. Slade said that anything controversial tends to die in House or Senate, as it is difficult to pass
any legislation heading toward the election.


Mr. Slade said that possible initiatives before Congress ends this session include
      telecommunications legislation
      immigration reform which will unlikely emerge from Congress
      new energy legislation
      a pension reform bill
      a budget agreement

Mr. Slade said a lame duck session is very likely, especially hard issues relating to budget
reconciliation.

SENATE INDIAN AFFAIRS COMMITTEE IN 109TH CONGRESS
Mr. Slade said that Senator John McCain (R-AZ), chair of the Senate Indian Affairs Committee,
continues to hold hearings on the Abramoff scandal. He said that Senator McCain has solidified
his role as the Republican nomination frontrunner in 2008 and uses the Committee to promote
his good government agenda. He added that a Committee report on Abramoff and Indian tribal
activities is expected out in near future.

MCCAIN INDIAN GAMING REGULATORY ACT (S. 2078)
Mr. Slade said that S. 2708, if enacted, would
   • clarify authority of National Indian Gaming Commission (NIGC) to regulate and enforce
       minimal control over Class III games
   • limit lands for gaming purposes
   • grant NIGC Chairman authority to approve contracts for both management and
       development
   • tighten restrictions on off-reservation gaming
   • give NIGC authority to issue complaints
   • mandate that all tribes pay fees to NIGC
   • require that tribes must also disclose all gambling profits to tribal members

Mr. Slade said that S. 2507 had passed the Senate Indian Affairs Committee and currently was
not scheduled for a vote before the full Senate. He said the bill ironically passed same day that
Abramoff was sentenced to 5 years, 10 months, in federal prison. He said the media distraction
from other lobbying scandals may slow the progress for this bill.

OFF-RESERVATION GAMING LEGISLATION
Mr. Slade reported that in the House, Congress has taken a much more narrow approach. He
said that Representative Pombo (R-CA), chair of the U.S. House Resources Committee,
introduced HR 4893 in March of 2006. He said the legislation would amend Section 20 of
Indian Gaming Regulatory Act (IGRA) which addresses how tribes can open casinos on lands
acquired after 1988. He said the legislation would repeal the “two-part determination rule”
authorizing the U.S. Secretary of the Interior and the governor to make decisions and, instead,
localities and tribes would come to independent agreements.

Mr. Slade said the bill received a hearing from Resources committee but was not reported to the
full House. He noted that the bill's outlook tied closely to Pombo's outlook. He said that Indian
affairs has received considerable attention as a result of the Abramoff scandal, and noted that
Pombo has yet to return campaign contributions from Abramoff. He said that Democrats are
trying to link him to a “culture of corruption.” Mr. Slade said that Chairman Pombo is facing a


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tough re-election this year. He said the bill would likely not move. He also noted that the House
Committee on Resources would have a new chair in 2007 despite the party in control.

INTERNET GAMING
Mr. Slade said that he would provide an overview of the state of Internet gaming at the
Committee hearing following the general Committee meeting.

OTHER ISSUES
Mr. Slade said federal aid to gulf coast casinos post Katrina was another gaming-related issue of
interest in Washington. He said that the aid was substantial and that there are now more casinos
after the hurricanes than there were before. He said that large portions of investments in the Gulf
Coast are now tax deductible and that the price of land is going up quickly. He said that
residents are angry that casinos are getting more attention than them. He noted that Mississippi
legislators were more successful than Louisiana legislators in securing federal aid.


INDIAN GAMING
Mr. Phil Hogen, chairman of the National Indian Gaming Commission (NIGC), reported that the
NIGC has been working with the Department of Justice for a year to attempt to resolve how to
differentiate Class II and Class III gaming—respectively, the games that tribes can do without a
compact and the games tribes need a compact to facilitate. He said that the Justice Department
announced last fall that it wanted to amend the Johnson Act in order to clarify a carve-out of
Class II gaming in this technological age.

Chairman Hogen said the discussion started a year ago last spring when the NIGC wanted to
propose regulations that would specify just what the devices, i.e., interlinked bingo machines,
could and couldn’t do in order to be classified as Class II. Chairman Hogen said that the NIGC
told the Justice Department this spring that it couldn’t wait any longer, that it wished the Justice
Department well in its efforts relating to the amendment of the Johnson Act, but that it needed to
move forward with its own proposed regulations. He said that the NIGC released the regulations
on May 25, 2006, starting the clock running on the time period for comments. He said that
ideally, following consultations with tribal governments, the NIGC soon will be able to finalize
the regulations.

Chairman Hogen said that the Justice Department has told the NIGC that it will soon send to
Capitol Hill their proposal to amend the Johnson Act, though he feels that in the present political
climate it is very doubtful that anything will happen this session of Congress. He said he is
hopeful that this fall the NIGC will have in place regulations that will draw a brighter line.

Chairman Hogen said that S. 2078 is of great interest to the NIGC. He said the NIGC is
concerned regarding their oversight role with respect to Class III gaming. He said that Class III
represents 80 percent of the over $20 billion dollars in Indian gaming revenue. He said that the
U.S. District Court in D.C. last year ruled that the NIGC had overstepped its authority when it
promulgated minimum internal control standards applying to Class III gaming. Chairman Hogen
said that the bill before the full Senate at present would clarify that the NIGC does have that
authority, as well as broaden its role with respect to reviewing gaming-related contracts and
addressing off-reservation gaming-related issues.


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Chairman Hogen said that the NIGC continues to hear from tribes who wish they could negotiate
and renegotiate contracts with states. He said that there has been some tribal gaming activity in
terms of Secretarial procedures where state-tribal compacts haven’t been negotiated. He said the
Northern Arapaho tribe in Wyoming has proceeded with Secretarial procedures and soon would
be conducting Class II gaming with very little role for the State of Wyoming. He said that the
State of Florida hasn’t come to the table to the satisfaction of Florida tribes, therefore the tribes
have gone to the Secretary of Interior and the Secretary is exploring the scope of gaming in
Florida now that slot machines are legal in Florida. He said that another shoe may drop
regarding Secretarial procedures.

Regarding off-reservation gaming, Chairman Hogen said that there continues to be a lot more
discussion than there is action in terms of tribes acquiring lands off-reservation for gaming
purposes after IGRA was enacted in 1988. He said that consequently there are at least two
pieces of legislation pending that would deal with this.

Chairman Hogen said that in the meantime the Department of Interior is in the front seat, and the
NIGC is in the back seat, in terms of decisions made on the federal level with respect to those
lands that tribes can use for Indian gaming. He said that tribes can conduct gaming under IGRA
on lands within the boundaries of their reservation at the time IGRA was enacted in 1988, on
lands that were adjacent or contiguous, or on lands that were in trust at that time. He said
gaming on new lands then becomes problematic. He said that a two-part determination process,
which entails the Secretary finding that it is in the best interest of the tribe and of no detriment to
the surrounding community to conduct gaming on the land and the state governor concurs, the
gaming can move forward. He said that this has only happened three times—in Michigan,
Washington State, and Wisconsin.

Chairman Hogen said that applications are pending. He said that Senator McCain’s bill would
grandfather in pending applications for that two-part determination process by April 15 of this
year. He said that a number of additional applications have come in after the bill and that the
two-part determination would still be in effect until they were resolved, even if one of the bills
was passed.

Chairman Hogen said that NIGC is called upon from time to time to determine if lands where
tribes want to do gaming are Indian lands under IGRA. He said that tribes send the NIGC a site
specific tribal gaming ordinance that the NIGC had to approve, right down to lot numbers and
block numbers. He said that it is hard at times to coordinate that determination with the
Department of Interior, as both bodies are extremely busy.

Chairman Hogen said that though not a great number of proposed lots or tracts are coming
forward with relation to new gaming, it is a life and death matter to tribes that do not have
another viable place to conduct that economic activity. He said that hopefully their concerns can
be accommodated as well as those of surrounding communities.

Mr. Mark Van Norman, Executive Director of the National Indian Gaming Association (NIGA),
said that Senator McCain’s amendment to IGRA in the form of S. 1295, the NIGC
Accountability Bill, was of import to NIGA. He said that the bill provides that the NIGC will
work under the Government Performance and Results Act and come up with a five-year plan.
Mr. Van Norman said that NIGA thinks of the bill as the “fee bill,” because it increases NIGC

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authority to charge fees to .08 percent of gross revenue, raising their possible fees by 40 to 50
percent, potentially up to approximately $18 million dollars. He said that it also provides for
some technical assistance.

Mr. Van Norman said NIGA’s primary concern is with McCain’s bill, S. 2078. He said that
NIGA was concerned that the existing structure of the Act (1) gives tribes authority over Class I,
traditional forms of gaming; (2) gives tribes and the NIGC authority over Class II, bingo and
similar games; and (3) relies on tribal-state compacts to regulate Class III gaming, with some
oversight from the NIGC in terms of monitoring to determine that tribes have enforced their own
ordinances and have the systems in place required by the statutes.

Mr. Van Norman said that NIGA feels that the bill goes beyond addressing the Colorado River
Indian Tribes case, because it does not contain provisions to ensure that federal regulations
would defer to tribal-state compacts. He said that NIGA believes that it is better to not to have
federal regulations, but to work under the existing process of tribal ordinances that are approved
by the NIGC. He said that “gaming-related contract” review language included in the bill is
very broad and could be defined to include construction, consultation and development contracts;
finance, as well as goods and services and other kinds of contracts. He said that NIGA is
opposed to this because it could prove very burdensome for a federal agency to have to review
all those contracts, and could impede economic activity. He said that if a tribe has a vendor
licensing system in place, it could forward those licenses to the NIGC.

Mr. Van Norman said that only three tribes in 17 years have successfully negotiated off-
reservation gaming under the Section 20 two-part determination of IGRA. He said that off-
reservation gaming has become more of a media issue because it causes consternation locally
when it is initially proposed. He said that such proposals only move forward if the Secretary of
the Interior sees that there is cooperation between the tribe and state and local governments,
consultation with nearby tribes, and governor approval. Mr. Van Norman said that NIGA does
not see “landless tribe” issues as off-reservation issues, as the tribes have yet to affirm an initial
reservation.

Mr. Van Norman said instead of amending the Act, NIGA would prefer to have the Department
of Interior move forward with proposed regulations to clarify that state and local officials and
nearby tribes have the right to consult; to affirm that land claim cases would require further
Congressional actions to approve the claim prior to off-reservation gaming, and to address
aboriginal lands.

Mr. Van Norman said that the Department of Justice has not yet publicly come forward with its
bill, but that NIGC has put forward Class II-related regulations in the Federal Register. He said
the comment period ends on August 23 and that NIGA will be working actively with tribes
throughout that time. He said that any federal regulations or bill should respect the five Court of
Appeals cases that the tribes have won on this issue.

Mr. Van Norman said that Indian gaming has been very successful and has revitalized tribal
communities. He said that it is an economic lifeline, especially in a time of serious federal
budget cuts.



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In response to a question from Rep. Caron regarding the outcome of the federal proposals given
the political climate in Washington, Mr. Van Norman said that he feels that the House has a full
calendar and if here is action, it will probably be in the Senate. Mr. Van Norman said that
McCain wants to move his legislation, but that some states have expressed concern that they
worked have hard on compacts and feel whatever legislation goes forward should respect
existing compacts.

Mr. Van Norman noted that he believed that Chairman Pombo still had two more years to serve,
and that Sen. McCain would move to the Armed Services Committee. He added that Chairman
Pombo had taken a $7,000 contribution and donated it for a youth club to the Red Lake Tribe
that had experienced a tragic shooting.

The Committee then moved to adjourn in order to conduct a scheduled hearing on Internet
gaming.

ADJOURNMENT
There being no further business, the meeting adjourned at 3:45 p.m.




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