Existing federal law, the Indian Gaming Regulatory Act of 1988, provides for the negotiation and execution of tribal-state gaming compacts for the purpose of authorizing certain types of gaming on Indian lands within a state. The California Constitution authorizes the Governor to negotiate and conclude compacts, subject to ratification by the Legislature.

Existing law expressly ratifies a number of tribal-state gaming compacts, and amendments to tribal-state gaming compacts, between the State of California and specified Indian tribes. The California Environmental Quality Act (CEQA) requires a lead agency to prepare, or cause to be prepared, and certify the completion of, an environmental impact report on a project, as defined, that it proposes to carry out or approve that may have a significant effect on the environment, as defined, or to adopt a negative declaration if it finds that the project will not have that effect.

This bill would ratify the tribal-state gaming compact entered into between the State of California and the Santa Ynez Band of Mission Indians, executed on August 26, 2015. The bill would provide that, in deference to tribal sovereignty, certain actions are not projects for the purposes of CEQA.

This bill would declare that it is to take effect immediately as an urgency statute.

Existing federal law, the Indian Gaming Regulatory Act of 1988, provides for the negotiation and execution of tribal-state gaming compacts for the purpose of authorizing certain types of gaming on Indian lands within a state. The California Constitution authorizes the Governor to negotiate and conclude compacts, subject to ratification by the Legislature.

Existing law expressly ratifies a number of tribal-state gaming compacts, and amendments to tribal-state gaming compacts, between the State of California and specified Indian tribes. The California Environmental Quality Act (CEQA) requires a lead agency to prepare, or cause to be prepared, and certify the completion of, an environmental impact report on a project, as defined, that it proposes to carry out or approve that may have a significant effect on the environment, as defined, or to adopt a negative declaration if it finds that the project will not have that effect.

This bill would ratify the tribal-state gaming compact entered into between the State of California and the Santa Ynez Band of Mission Indians, executed on August 26, 2015. The bill would provide that, in deference to tribal sovereignty, certain actions are not projects for the purposes of CEQA.

This bill would declare that it is to take effect immediately as an urgency statute.

Existing federal law, the Indian Gaming Regulatory Act of 1988, provides for the negotiation and execution of tribal-state gaming compacts for the purpose of authorizing certain types of gaming on Indian lands within a state. The California Constitution authorizes the Governor to negotiate and conclude compacts, subject to ratification by the Legislature.

Existing law expressly ratifies a number of tribal-state gaming compacts compacts, and amendments to tribal-state gaming compacts, between the State of California and specified Indian tribes. Existing law creates in the State Treasury the Indian Gaming Revenue Sharing Trust Fund and the Indian Gaming Special Distribution Fund for the receipt and deposit of moneys received by the state from Indian tribes pursuant to the terms of gaming compacts entered into with the state, and authorizes moneys in those funds to be used for certain purposes. Existing law, until January 1, 2021, establishes the method of calculating the distribution of appropriations from the Indian Gaming Special Distribution Fund for grants to local government agencies impacted by tribal gaming. The California Environmental Quality Act (CEQA) requires a lead agency to prepare, or cause to be prepared, and certify the completion of, an environmental impact report on a project, as defined, that it proposes to carry out or approve that may have a significant effect on the environment, as defined, or to adopt a negative declaration if it finds that the project will not have that effect.

Existing federal law, the Indian Gaming Regulatory Act of 1988, provides for the negotiation and execution of tribal-state gaming compacts for the purpose of authorizing certain types of gaming on Indian lands within a state. The California Constitution authorizes the Governor to negotiate and conclude compacts, subject to ratification by the Legislature.

Existing law ratifies a number of tribal-state gaming compacts between the State of California and specified Indian tribes. Existing law creates in the State Treasury the Indian Gaming Revenue Sharing Trust Fund and the Indian Gaming Special Distribution Fund for the receipt and deposit of moneys received by the state from Indian tribes pursuant to the terms of gaming compacts entered into with the state, and authorizes moneys in those funds to be used for certain purposes. Existing law, until January 1, 2021, establishes the method of calculating the distribution of appropriations from the Indian Gaming Special Distribution Fund for grants to local government agencies impacted by tribal gaming.

This bill would reorganize and make technical, nonsubstantive changes to these provisions. The bill would conform these provisions to the changes made by the Governors Reorganization Plan No. 2. of 2012.

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 1540

Author:(Gray)

As Amended Ver:August 31, 2015

2/3 vote. Urgency

Original Committee Reference: G.O.

SUMMARY: Ratifies the tribal-state gaming compact (Compact) entered into between the State of California (State) and the Santa Ynez Band of Mission Indians (Tribe) executed on August 26, 2015. Additionally, this bill provides that, in deference to tribal sovereignty, certain actions are not deemed projects for purposes of the California Environmental Quality Act (CEQA); and, stipulates, except as expressly provided, that none of the provisions shall be construed to exempt a city, county, or city and county, or the Department of Transportation from CEQA requirements.

The Senate amendments delete the Assembly version of this bill, and instead:

1. Ratify a tribal-state gaming compact entered into in accordance with the federal Indian Gaming Regulatory Act (IGRA) of 1988 (18 United States Code (U.S.C.) Sections 1166 to 1168, inclusive, and 25 U.S.C. Section 2701 et seq.) between the State and the Tribe, executed on August 26, 2015.

2. Authorize the Tribe to operate a maximum of 2,500 gaming devices at no more than two gaming facilities, and only on those Indian lands held in trust for the Tribe as of the execution date of this Compact, as described.

3. Supersede a 1999 compact between the Tribe and the State.

4. State once effective, this Compact shall be in full force and effect for State law purposes for 25 years following the effective date.

5. Provide that, in deference to tribal sovereignty, certain actions may not be deemed projects for purposes of the CEQA.

6. Contain an urgency clause, allowing this bill to take effect immediately upon enactment.

AS PASSED BY THE ASSEMBLY, this bill would have repealed and renumbers sections of the Government Code related to Indian gaming into one stand-alone Title in the Government Code. Makes other technical non-substantive changes.

FISCAL EFFECT: Pursuant to the 1999 compact, the Tribe currently pays $5.8 million annually into the Special Distribution Fund (SDF) to cover the State's regulatory costs relating to tribal gaming, including problem gambling programs, and $1.3 million annually into the Revenue Sharing Trust Fund (RSTF) which is directed to non-gaming and limited gaming tribes in California.

Under this Compact, it is estimated that the Tribe will pay approximately $1 million annually into the SDF and approximately $12 million annually into the RSTF or the Tribal Nation Grant Fund (TNGF). The Tribe's $12 million payment into the RSTF may be offset by up to $7.2 million (the 60% credit referenced below), as specified.

COMMENTS: On September 1, 2015, the Assembly Governmental Organization Committee held an informational hearing on this tribal-state gaming compact between the State and the Tribe.

Purpose of this bill: This bill ratifies the Compact entered into between the State and the Tribe executed on August 26, 2015 and supersedes the 1999 compact between the Tribe and the State.

The Compact authorizes the Tribe to operate a maximum of 2,500 gaming devices (slot machines) at not more than two gaming facilities, and only on those Indian lands held in trust for the Tribe as of the execution date of this Compact, as described. Under the 1999 compact, the Tribe could not operate more than 2,000 gaming devices. If the Tribe chooses to operate more than one gaming facility, then one of the two gaming facilities shall have no more than 500 gaming devices and shall have a primary purpose other than gaming authorized under IGRA.

The Tribe has agreed to pay the State its pro rata share of the costs the State incurs for the performance of its duties under the Compact as well as approximately 6% of the casino's Net Win from the operation of gaming devices in excess of 350 devices, to be shared with non-gaming and limited gaming tribes so that the economic benefits of gaming reach tribal governments that have not chosen to operate a tribal casino.

The Compact provides a framework for the sharing of gaming revenue with the County of Santa Barbara (County) and other stated purposes. Specifically, the Tribe may take annual credits of up to 60% (of the 6% Net Win) for infrastructure improvements and fire, law enforcement, public transit, education, tourism and other services including investments in renewable energy or water conservation projects and non-gaming related economic development and health care facilities that provide a mutual benefit to the Tribe and the local community.

Pursuant to the 1999 compact, the Tribe currently pays $5.8 million annually into the SDF and $1.3 million annually into the RSTF. Under this Compact, it is estimated that the Tribe will pay approximately $1 million annually (its pro rata share) into the SDF and approximately $12 million annually into the RSTF or the TNGF. Thus, the 60% credit referenced above will equate to approximately $7.2 million per year.

It should be noted that recent federal court decisions, such as the Rincon decision (see below), have severely limited the ability of the State to collect revenues for general purposes from gaming tribes. As a result, many of the gaming tribes that had executed compacts with Governor Schwarzenegger which provided direct contributions of gaming revenue to the State's General Fund, have sought to renegotiate or amend those deals in a way that is consistent with this federal court decision.

According to the Governor's office, the terms of the new Compact are consistent with provisions of more recent compacts related to licensing, compliance enforcement and mitigation of off-reservation gaming impacts but have been updated to reflect, among other things, the evolving nature of financial markets, as well as the professionalism of the Tribe's regulators and their constructive relationship with state gaming regulators.

The Governor's office contends, the terms of the Compact reflect a continued commitment by the Tribe to revenue sharing with non-gaming and limited gaming tribes through the RSTF and TNGF; so that the economic benefits of gaming reach tribal governments that have not chosen to operate a tribal casino.

Once effective (legislative ratification and federal approval required), this Compact shall be in full force and effect for State law purposes for 25 years (2040).

Brief History of the Chumash Tribe and Background:

The Tribe is a federally recognized tribe in Santa Ynez, California, in the County. The Tribe's reservation was established on December 27, 1901 under authority of the Mission Indian Relief Act. The residents of the Santa Ynez Reservation are members of the Santa Ynez Band of Chumash Indians. The Santa Ynez Band of Chumash Indians is the only federally recognized Chumash tribe in the nation.

For many years, few tribal members lived on the reservation. It was difficult to live a modern existence on the reservation without running water or electricity. The Tribe began a housing program in 1979 and more tribal members moved on to the reservation – both lower and upper reservation. Today there are 249 residents on the Santa Ynez Reservation and 97 homes. The Tribe is governed by a democratically elected, five-member tribal council.

In 1999, the Tribe and the State entered into a Tribal-State Compact, which enabled the Tribe, through revenues generated by its gaming operation, to improve the governance, environment, education, health, safety, and general welfare of its citizens; and to promote a strong tribal government, self-sufficiency, and to provide essential government services to its citizens.

The Tribe's Chumash Casino Resort is one of the most successful casinos in California. Under the current 1999 compact terms, the Tribe operates 2,000 Class III gaming devices and 38 table games. The resort is a 190,000 square foot gaming complex with a casino and a hotel with 106 guest rooms and other venues. In October 2014, the Tribe began construction on a $100 million casino and hotel expansion project—the largest renovation since the resort opened in 2004. This project will help boost the local economy by creating new construction jobs and supporting Santa Ynez Valley businesses. In the long term, the larger hotel will create an estimated 250 new jobs and bring additional tourism to the Santa Ynez Valley.

The Tribe's casino resort has become the premiere entertainment destination in the County. More than 1,700 employees work at the resort casino. In addition, the Tribe has a diversified business portfolio – it owns or has ownership interests in a variety of businesses both on and off the Santa Ynez Reservation including three hotels nearby in Solvang; an office building in Buellton that houses various tribal business functions; and, a federally qualified health clinic.

According to the Tribe, revenue generated from the Chumash Casino Resort has been used toward economic development initiatives that have brought vital services to its members, from health care and education to cultural and environmental programs; and the Tribe is realizing their dream of building a museum and cultural center. The Tribe is committed to improving the environment, education status, and the health, safety and general welfare of its members and local residents.

Scope of Gaming Authorized and Financial Terms:

Scope of Class III Gaming Authorized: The Tribe is authorized to operate up to 2,500 gaming devices (slot machines), banking or percentage card games, and any devices or games that are authorized under state law to the California State Lottery. The Tribe may not operate roulette games (table or mechanical) or any game that incorporates the physical use of a die or dice. The Tribe shall not engage in Class III Gaming that is not expressly authorized in the Compact.

Authorized Gaming Facility: The Tribe may establish and operate not more than two gaming facilities, and only on those Indian lands located within the boundaries of the Tribe's reservation as those boundaries exist as of the execution date of this Compact, as legally described, and on which Class III Gaming may lawfully be conducted under IGRA. If the Tribe chooses to operate more than one gaming facility, then one of the two gaming facilities shall have no more than 500 gaming devices and shall have a primary purpose other than gaming authorized under IGRA.

Exclusivity: Provides that in the event the exclusive right of Indian tribes to operate Class III gaming in California pursuant to the California Constitution is lost and other non-Indian entities are able to engage in Class III gaming the Tribe shall have the right to terminate this Compact, in which case the Tribe will lose the right to operate Class III gaming authorized by this Compact; or continue under this Compact, as defined.

SDF: The Tribe shall pay to the State on a pro rata basis for costs the State incurs for the performance of all its duties under this Compact as determined by the monies appropriated in the annual Budget Act for the performance of their duties under Class III Gaming compacts each fiscal year for the California Gambling Control Commission (CGCC), the California Department of Justice (DOJ), the Office of the Governor and the California Department of Alcohol and Drug Programs, Office of Problem Gambling, or any agency or agencies the State designates as a successor to them. The Tribe estimates it will pay approximately $1 million annually into the SDF under the defined formula.

Payments to the RSTF or TNGF: If the Tribe operates more than 350 gaming devices at any time in a given calendar year, it shall pay to CGCC, for deposit into the RSTF or the TNGF, 6% of its Net Win from the operation of gaming devices in excess of 350. “Net Win” is defined as the drop from gaming devices, plus the redemption value of expired tickets, less fills, less payouts, less that portion of the gaming operation’s payments to a third-party wide-area progressive jackpot system provider that is contributed only to the progressive jackpot amount.

Credits Applied to RSTF or the TNGF Payments: The State agrees to provide the Tribe with annual credits for up to 60% of the payments otherwise due to the RSTF or TNGF for the following: 1) Payments by the Tribe to the County and local jurisdictions operating facilities or providing services within the County for purposes of improved fire, law enforcement, public transit, education, tourism, and other services and infrastructure improvements intended to include serving off-reservation needs of County residents, and not otherwise required by off-reservation environmental and economic impacts. Such payments shall be subject to approval by the State or State designated agency. At least 20% of the annual credits shall be utilized for this purpose; 2) Non-gaming economic development investments that benefit the State and the Tribe because of their cultural, social or environmental value and that provide economic diversification for the Tribe; 3) Investments by the Tribe and any funds paid to the State for renewable energy projects, as defined; 4) Payments to support capital improvements and operating expenses for facilities within California that provide health care services to tribal members, Indians, and non-Indians; 5) Investments by the Tribe for water treatment and conservation projects; and, 6) General welfare benefits provided by the Tribe for health-care, cultural or vocational purposes to non-tribal members and Native Americans in the community.

It is estimated that the 60% credit will equate up to approximately $9.5 million per year. The current contribution by the Tribe to the RSTF under the 1999 compact is $1.3 million. It is estimated that, even considering the 60% credit the Tribe receives back for off-reservation infrastructure projects, the net amount it will pay under the new compact to the RSTF is approximately $6.5 million per year, or five-times greater than it is currently paying under the 1999 Compact.

All excess authorized credits that cannot be applied in any one year because they would exceed the 60% may be applied as an annual credit in all following years that this Compact is in effect, in the same percentages, until completely exhausted.

Cost Reimbursement and Mitigation to Local Governments: Before the commencement of a project, and no later than the issuance of the Final Tribal Environmental Impact Report (TEIR) to the County, the Tribe shall offer to commence government-to-government negotiations with the County, and upon the County's acceptance of the Tribe's offer, shall negotiate with the County on a government-to-government basis and shall enter into enforceable written agreements with the County with respect to: 1) Provisions providing for the timely mitigation of any significant effect on the off-reservation environment, as defined; 2) Provisions relating to compensation for law enforcement, fire protection, emergency medical services and any other public services to be provided by the County to the Tribe for the purposes of the Tribe’s gaming operation as a consequence of the project; 3) Provisions providing for reasonable compensation for programs designed to address gambling addiction; and 4) Provisions providing for mitigation of any effect on public safety attributable to the project, including any compensation to the County as a consequence thereof.

Quarterly Contribution Report: At the time each quarterly payment is due, the Tribe shall submit to the State a report, prepared and certified by an authorized representative of the gaming operation. The report must include: 1) calculation of the maximum number of gaming devices operated each day, 2) the Net Win calculation, 3) the amount due the SDF, 4) calculation of the amount due to the RSTF/TNGF, and 5) the total amount of the quarterly payment.

Amendment by Agreement: The terms and conditions of this Compact may be amended at any time by the mutual and written agreement of both parties during the term of this Compact as defined, provided that each party voluntarily consents to such negotiations in writing. Any amendments to this Compact shall be deemed to supersede, supplant and extinguish all previous understandings and agreements on the subject.

Additional Compact Components:

1. Gaming Ordinance and Regulations – all gaming activities conducted under this Compact shall, at a minimum, comply a) with a gaming ordinance duly adopted by the Tribe and approved in accordance with IGRA, b) with all rules, regulations, procedures, specifications, and standards duly adopted by the National Indian Gaming Commission (NIGC), the Tribal Gaming Agency, and the CGCC, and c) with the provisions of this Compact.

2. Tribal Ownership, Management, and Control of Gaming Operation – the gaming operation authorized under this Compact shall be owned solely by the Tribe.

3. Licensing Requirements and Procedures – all persons in any way connected with the gaming operation or gaming facility who are required to be licensed or to submit to a background investigation under IGRA, and any others required to be licensed under this Compact, including, without limitation, all gaming employees, gaming resource suppliers, financial sources, and any other person having a significant influence over the gaming operation, must be licensed by the Tribal Gaming Agency and cannot have had any determination of suitability denied or revoked by CGCC. Every gaming employee shall obtain, and thereafter maintain current, a valid tribal gaming license, as provided. The parties intend that the licensing process provided for in this Compact shall involve joint cooperation between the Tribal Gaming Agency and CGCC, as described.

4. Environmental Protections – the Tribe must prepare a TEIR and negotiate mitigation of any off-reservation impacts. The Tribe's failure to prepare an adequate TEIR when required shall be deemed a breach of this Compact and furthermore shall be grounds for issuance of an injunction or other appropriate equitable relief. A completed TEIR must be filed with the County, the Department of Justice, the State Clearinghouse and the State Gaming Agency. Also, projects that have commenced prior to the effective date of this Compact, including the "hotel expansion project" will be subject to the relevant terms and conditions of the Tribe's 1999 compact then in effect.

5. Employee Protections – the Tribe agrees to participate in the state's workers' compensation program with respect to employees at the casino. All disputes arising from the workers' compensation laws shall be heard by the State Workers' Compensation Appeals Board pursuant to the California Labor Code. The Tribe acknowledges the jurisdiction of the Board in such manners. Furthermore, the Tribe agrees that it will participate in the state's unemployment compensation program for providing benefits and unemployment compensation disability benefits to employees at the casino.

6. Cooperation with Tribal Gaming Agency – the CGCC shall meet periodically with the Tribal Gaming Agency and cooperate in all matters relating to the enforcement of the provisions of this Compact and its Appendices.

7. Audit and Compact Compliance Review – in addition to providing for an annual independent audit, the Compact allows the state to conduct its own annual audit and compact compliance review.

8. Regulations for Operation, Management and Minimum Standards – the Tribe shall conduct its gaming activities pursuant to an internal control system that implements minimum internal control standards for Class III Gaming that are no less stringent than those contained in the Minimal Internal Control Standards of the NIGC (25 Code of Federal Regulations Section 542), as specified. This requirement is met through compliance with the provisions, as defined, or in the alternative by compliance with the statewide uniform regulation CGCC-8, as it exists currently and as it may hereafter be amended.

9. Inspection and Testing of Slot Machines – slot machines shall be tested, approved and certified by an independent gaming test laboratory or state governmental gaming test laboratory to ensure that they are being operated according to specified technical standards. Also, requires the Tribal Gaming Agency to maintain adequate records that demonstrate compliance with software and hardware specifications. CGCC shall be authorized to annually conduct up to four random inspections of slot machines in operation to confirm that the slot machines are operating in conformance with these standards. The Tribal Gaming Agency shall prepare and maintain records of its compliance while any gaming device is on the gaming floor and for a period of one year after the gaming device is removed from the gaming floor, and shall make those records available for inspection by CGCC upon request.

10. Patron Disputes – the Tribal Gaming Agency must attempt to resolve patron disputes filed within three days of the play or operation of a Class III game, including refusal to pay any alleged winnings. If a patron is dissatisfied with the resolution, the Tribe shall inform the patron in writing with 15 days of the right to resolution of the dispute by the Tribal Gaming Agency. If dissatisfied with the resolution, the patron has the right to seek resolution either in the Tribe's tribal court system or through the tribal claims commission. The Tribal Gaming Agency shall conduct an appropriate investigation, provide to the patron a copy of its procedures concerning patron complaints, and render a decision in accordance with industry practice. The decision shall be issued within 60 days of the patron's request. Any party dissatisfied with the award of the tribal court or tribal claims commission may, at the party's election, appeal to the tribal appellate court or seek binding arbitration that shall be settled by a retired judge, in accordance with the streamlined arbitration rules and procedures of Judicial Arbitration and Mediation Services (JAMS). The Tribe agrees to wave its sovereign immunity in order to be compelled in federal or state court to abide by the resolution of arbitration. Currently, the Tribe has not established a tribal court system or tribal claims commission. However, the tribe is investigating the feasibility of creating such in the near future.

11. Labor Provisions – provides that the gaming activities authorized by this Compact may only commence after the Tribe has adopted an ordinance identical to the Tribal Labor Relations Ordinance (TRLO), referenced as Appendix C of the Compact, and the gaming activities may only continue as long as the Tribe maintains the ordinance. If the Tribe employs 250 or more persons in a tribal casino facility, then the provisions of the TLRO become effective. The TLRO provides for a secret ballot election. The new TLRO proscribed by this Compact is modeled after the Tribe’s 1999 TLRO with several modifications. The new TLRO provides for union neutrality. The Tribe will not oppose a union organization but can advocate the benefits of working for the Tribe. A labor union must issue a Notice of Intent or Organize (NOIO). For a period of 365 days following delivery of a NOIO, the union shall not engage in strikes, picketing, boycotts, attack websites, or other economic activity at or in relation to the tribal casino or related facility. During the 365 days after the Tribe received the NOIO, the union must collect dated and signed authorization cards and complete the secret ballot election. Failure to complete the secret ballot election within 365 days shall preclude the union from delivering another NOIO for a period of two years (730 days). After the certification that 30% of the employees have expressed an interest in the union, a notice of election shall be issued and the election shall be concluded within 30 calendar days thereafter. Secret ballot elections shall be held at the workplace and at least one neutral location. Employees may mail in ballots provided they are received by election day. Mediation for any collective bargaining agreement impasse shall be made in conjunction with the Federal Mediation and Conciliation Service (FMCS). The mediation process is modeled on the Agricultural Labor Relations Act and authorizes the mediator to resolve the impasse. According to the Administration, the appeals procedures have been streamlined significantly in comparison to the Tribe's 1999 TLRO. Disputes are presented to an arbitrator with expertise in labor law and appropriate challenges to the arbitrator's decision may be presented to a state superior court.

12. Prohibitions Regarding Minors – the Tribe shall prohibit persons under the age of 18 years from being present in any room or area in which gaming activities are being conducted unless the person is en route to a non-gaming area of the gaming facility, or is employed at the gaming facility in a capacity other than as a gaming employee.

13. Program to Mitigate Problem Gambling - the gaming operation shall establish a program, approved by the Tribal Gaming Agency, to mitigate pathological and problem gambling.

14. Alcohol Provisions – makes it explicit that the purchase, sale, and service of alcoholic beverages shall be subject to state law – the Alcoholic Beverage Control Act.

15. Tobacco – the Tribe agrees to provide a non-smoking area in the gaming facility and to utilize a ventilation system throughout the gaming facility that exhausts tobacco smoke to the extent reasonably feasible under state-of-the-art technology existing as of the date of the construction or significant renovation of the gaming facility, and further agrees not to offer or sell tobacco to anyone under 18 years of age.

16. Possession of Firearms – the possession of firearms by any person in the gaming facility is prohibited at all times, except for federal, state, or local law enforcement personnel, or tribal law enforcement or security personnel authorized by tribal law and federal or state law to possess firearms at the gaming facility.

17. Health and Safety Standards – the Tribe has agreed to adopt and comply with State public health standards for food and beverage handling and federal water quality and safe drinking standards applicable to California.

18. Building Codes and Fire Safety – in order to assure the protection of the health and safety of all gaming facility patrons, guests, and employees, the Tribe shall adopt, or has already adopted, and shall maintain throughout the term of this Compact, an ordinance that requires any covered gaming facility construction to meet or exceed the applicable codes (California Building Code and the California Public Safety Code). The Tribe shall also take all necessary steps to reasonably ensure the ongoing availability of sufficient and qualified fire suppression services to the gaming facility, and to reasonably ensure that the gaming facility satisfies all requirements of titles 19 and 24 of the California Code of Regulations applicable to similar facilities in the County, as defined.

19. Emergency Services Accessibility – the Tribe shall make reasonable provisions for adequate emergency fire, medical, and related relief and disaster services for patrons and employees of the gaming facility.

20. Effective Date – the Compact shall not be effective unless and until all of the following have occurred: a) The Compact is ratified by statute in accordance with state law; and b) Notice of approval or constructive approval is published in the Federal Register. Once effective, this Compact shall be in full force and effect for State law purposes for 20 years following the effective date

21. Term – once effective shall be in full force and effect for State law purposes for 25 years (December 31, 2040) following the effective date.

Additional Background Information:

Rincon Decision: In 2004, the Rincon Band of Mission Indians sued the State in federal court after negotiations for a new gambling agreement with then-Governor Schwarzenegger fell apart. The Tribe believed the Governor was violating federal law by insisting that tribes pay money into the state's General Fund in exchange for more slot machines.

In July 2011, the United States Supreme Court declined to review a Ninth Circuit Court's decision that ruled the state could not require the Rincon Band tribe to pay a percentage of slot machine revenue into California's General Fund for more gaming devices. The Ninth Circuit had affirmed a lower court decision that the new financial concessions were nothing more than a state tax on tribal casino revenues, which is prohibited by IGRA. The court concluded that a "non-negotiable, mandatory payment of 10% of net win into the State treasury for unrestricted use yields public revenue and is [therefore] a tax and that the court was therefore required to consider the State's demand as evidence of bad faith under IGRA's statutes."

The Rincon decision has changed the dynamics of tribal-state compact negotiations in California.

Pauma Band of Luiseno Mission Indians Lawsuit: In 2010, the Pauma Band of Luiseno Mission Indians ceased payments to the State and brought suit against the State in federal court claiming that the State acted in bad faith by misrepresenting significant information relative to the number of gaming machines available for licensure. Prior to its 2004 amended compact, the Tribe was paying approximately $315,000 a year to the state (into the SDF and RSTF) under terms of its 1999 compact. The payment rose to $7.75 million a year (initially for securitizing the proposed transportation bond and subsequently deposited directly into the general fund) under the tribe's 2004 amended compact. In 2013, the court sided with Pauma and, thus, the state no longer receives payments from the Pauma Tribe. The State has appealed that decision.

As noted above, the 2004 Pauma compact amendments were negotiated at the same time as the current Tribe compact, both of which were ratified by the same bill (AB 687 (Núñez), Chapter 91, Statutes of 2004). Both compacts provided for fixed payments to the state for securitizing transportation bonds. The Rincon decision as well as the Pauma case, have limited some of the state's options when negotiating and renegotiating compact agreements.

SDF: Existing law creates the SDF in the State Treasury for the receipt of revenue contributions made by tribal governments pursuant to the terms of the 1999 model Tribal-State Gaming Compacts and authorizes the Legislature to appropriate money from the SDF for the following purposes: 1) grants for programs designed to address gambling addiction; 2) grants for the support of state and local government agencies impacted by tribal government gaming; 3) compensation for regulatory costs incurred by CGCC and the DOJ in connection with the implementation and administration of compacts; 4) payment of shortfalls that may occur in the Indian Gaming RSTF; 5) disbursements for the purpose of implementing the terms of tribal labor relations ordinances promulgated in accordance with the terms of the 1999 compacts; and, 6) any other purpose specified by law. The distribution formula "sunsets" on January 1, 2021.

RSTF: Existing law also creates in the State Treasury the RSTF for the receipt and deposit of moneys derived from gaming device license fees that are paid into the RSTF pursuant to the terms of specified tribal-state gaming compacts for the purpose of making distributions to non-compacted tribes (e.g., federally-recognized non-gaming and tribes that operate casinos with fewer than 350 slot machines). Revenue in the RSTF is available to CGCC, upon appropriation by the Legislature, for making distributions of $1.1 million annually to non-compact tribes. The RSTF was created as part of the 1999 compacts, which, in conjunction with the passage of Proposition 1A (2000), created gaming compacts with approximately 60 California tribes. Non-compact tribes are considered third-party beneficiaries of the 1999 compacts.

TNGF: The TNGF was created in the Graton Rancheria compact [AB 517 (Hall), Chapter 12, Statutes of 2012], as a new destination for gaming revenue for distribution of funds to non-gaming and limited-gaming tribes, upon application of such tribes for purposes related to effective self-governance, self-determined community, and economic development. The fund is designed to be fluid and payments are intended to be made to non-gaming tribes on a "need" basis, upon application by non-gaming tribes. The TNGF currently does not receive funding.

Related legislation: AB 315 (Bigelow) of the current legislative session. Ratifies the amended and restated tribal-state gaming compact entered into between the State and the United Auburn Indian Community, executed on August 14, 2015.

Prior legislation: AB 475 (Bigelow), Chapter 8, Statutes of 2015. Ratified the tribal-state gaming compact entered into between the State and the Jackson Rancheria Band of Miwuk Indians, executed on February 1, 2015.

SB 1356 (De León), Chapter 314, Statutes of 2014. Ratified the amendment to the tribal-state gaming compact entered into between the State and the Viejas Band of Kumeyaay Indians, executed on August 12, 2014.

SB 1224 (Correa), Chapter 300, Statutes of 2014. Ratified the tribal-state gaming compact entered into between the State and the Karuk Tribe, executed on December 4, 2013.

AB 1245 (V. Manuel Pérez), Chapter 462, Statutes of 2013. Ratified the tribal-state gaming compact entered into between the State and the Ramona Band of Cahuilla Indians located in Riverside County, executed on June 10, 2013.

AB 277 (Hall), Chapter 51, Statutes of 2013. Ratified two new compacts entered into between the State and the following tribes: North Fork Rancheria, executed on August 31, 2012, and the Wiyot Tribe, executed on March 20, 2013.

AB 1267 (Hall), Chapter 6, Statutes of 2013. Ratified the amended tribal-state gaming compact entered into between the State and the Shingle Springs Band of Miwok Indians, executed on November 15, 2012.

SB 668 (Fuller), Chapter 67, Statutes of 2013. Ratified the tribal-state gaming compact entered into between the State and the Fort Independence Indian Community of Paiute Indians, executed on February 28, 2013.

AB 517 (Hall), Chapter 12, Statutes of 2012. Ratified the tribal-state gaming compact entered into between the State and the Federated Indians of Graton Rancheria of Sonoma County, executed on March 27, 2012.

AB 787 (Chesbro), Chapter 340, Statutes of 2012. Ratified the amendment to the tribal-state gaming compact entered into between the State and the Coyote Valley Band of Pomo Indians, executed on July 25, 2012.

AB 1418 (Hall), Chapter 412, Statutes of 2011. Repealed those provisions ratifying the tribal-state gaming compact entered into between the State and Pinoleville Pomo Nation, executed on March 9, 2009, and instead ratified the tribal-state gaming compact entered into between the State and the Pinoleville Pomo Nation, executed on August 8, 2011. Ratification of this revised compact authorized the Tribe to operate up to 900 slot machines with up to 15% of the casino's net win from the slots will go to local communities and gambling mitigation and regulation provisions, instead of requiring revenue contributions be made to the General Fund as provided by the 2009 compact.

AB 1020 (Chesbro), Chapter 27, Statutes of 2011. Repealed the ratification of the tribal-state gaming compact entered into between the State and the Habematolel Pomo of Upper Lake, executed on September 2, 2009, and instead ratified a new tribal-state gaming compact entered into between the State and the Habematolel Pomo of Upper Lake, executed on March 17, 2011. Ratification of this revised compact authorized the Habematolel Pomo of Upper Lake to operate up to 750 slot machines with up to 15% of the net-win from those gaming devices being paid to the SDF and the RSTF, instead of requiring revenue contributions be made to the General Fund as provided by the 2009 compact.

SB 89 (Budget and Fiscal Review Committee), Chapter 1, Statutes of 2010. Ratified the tribal-state gaming compact entered into between the State and the Habematolel Pomo of Upper Lake, executed on September 2, 2009.

AB 122 (Coto), Chapter 3, Statutes of 2009. Ratified the tribal-state gaming compact entered into between the State and the Pinoleville Pomo Nation, executed on March 10, 2009.

AB 3072 (Price), Chapter 334, Statutes of 2008. Ratified the first amendment to a tribal-state gaming compact entered into between the State and the Shingle Springs Band of Miwok Indians, executed on June 30, 2008.

SB 106 (Wiggins), Chapter 37, Statutes of 2007. Ratified a new compact between the State and the Yurok Tribe of the Yurok Reservation.

SB 174 (Ducheny), Chapter 38, Statutes of 2007. Ratified the first compact amendment to the compact between the State and Sycuan.

SB 175 (Ducheny), Chapter 39, Statutes of 2007. Ratified the first compact amendment to the compact between the State and Morongo.

SB 903 (Padilla), Chapter 40, Statutes of 2007. Ratified the first compact amendment to the compact between the State and Pechanga.

SB 941 (Padilla), Chapter 226, Statutes of 2007. Ratified the first compact amendment to the compact between the State and San Manuel.

SB 957 (Torlakson), Chapter 41, Statutes of 2007. Ratified the first compact amendment to the compact between the State and Agua Caliente.

SB 470 (Ducheny), Chapter 527, Statutes of 2006. Ratified the first amendment to the compact between the State and the Quechan Tribe of the Fort Yuma Reservation.

SB 1117 (Burton), Chapter 856, Statutes of 2004. Ratified two new and two amended compacts entered into between the State and the following tribes: Coyote Valley Band of Pomo Indians (new compact); Fort Mojave Indian Tribe (new compact); Buena Vista Rancheria of Me-Wuk Indians (amended compact); and, Ewiiaapaayp Band of Kumeyaay Indians (amended compact).

AB 687 (Núñez), Chapter 91, Statutes of 2004. Ratified amendments to five compacts entered into between the State and the following tribes: Pala Band of Mission Indians; Pauma Band of Luiseno Mission Indians of the Pauma and Yuima Reservation; Rumsey Band of Wintun Indians; United Auburn Indian Communities; and, Viejas Group of Kumeyaay Indians. Also, provided for the issuance of bonds in an amount not to exceed $1.5 billion by the California Infrastructure and Economic Development Bank and required the net proceeds of the sale of the compact assets to be deposited in the Traffic Congestion Relief Fund and the Transportation Deferred Investment Fund.

SB 930 (Burton), Chapter 802, Statutes of 2003. Ratified a compact between the State and the Torres-Martinez Desert Cahuilla Indians.

SB 411 (Ducheny), Chapter 790, Statutes of 2003. Ratified compacts between the State and the La Posta Band of Diegueno Mission Indians and the Santa Ysabel Band of Diegueno Mission Indians in San Diego County.

Proposition 1A, adopted by the people of California on March 7, 2000. Modified the prohibition against casinos and lotteries in the California Constitution to authorize the Governor to negotiate compacts, subject to legislative ratification, for the operation of slot machines, lottery games, and banking and percentage card games by federally recognized Indian tribes on Indian lands in California, in accordance with federal law. Authorized slot machines, lottery games, and banking and percentage card games to be conducted and operated on Indian lands subject to the compacts.

AB 1385 (Battin), Chapter 874, Statutes of 1999. Designated the Governor as the state officer responsible for negotiating and executing compacts between the State and federally recognized Indian tribes located in the State. Also, ratified 57 compacts and created two special funds in the State Treasury (SDF and RSTF), as specified.

SB 287 (Burton), Chapter 409, Statutes of 1998. Ratified 11 compacts negotiated between the State and Indian tribes that permitted class III video gaming devices on tribal lands and established a process for ratifying other compacts.

Analysis Prepared by: Eric Johnson / G.O. / (916) 319-2531 FN: 0002028

 THIRD READING  

Bill No: AB 1540

Author: Gray (D)

Amended: 8/31/15 in Senate

Vote: 27 - Urgency

PRIOR VOTES NOT RELEVANT

NOTE: On September 1, 2015, the Senate Governmental Organization Committee held an informational hearing on the tribal-state gaming compact entered into between the State of California and the Santa Ynez Band of Chumash Indians.

SUBJECT: Tribal gaming: compact ratification

SOURCE: Author

DIGEST: This bill ratifies the tribal-state gaming compact (Compact) entered into between the State of California and the Santa Ynez Band of Mission Indians (hereafter “Tribe”) executed on August 26, 2015. Additionally, this bill provides that, in deference to tribal sovereignty, certain actions are not deemed projects for purposes of the California Environmental Quality Act (CEQA); and, stipulates, except as expressly provided, that none of the provisions shall be construed to exempt a city, county, or city and county, or the Department of Transportation from CEQA requirements.

Senate Floor Amendments of 8/31/15 gut the contents of the original bill relating to tribal gaming, add an urgency clause, and insert provisions pertaining to ratification of the tribal gaming compact recently executed by the Governor and the Santa Ynez Band of Chumash Indians.

ANALYSIS:

Existing law:

1. Provides, under the Indian Gaming Regulatory Act (IGRA), for the negotiation and conclusion of compacts between federally recognized Indian tribes and the State for the purpose of conducting Class III gaming activities on Indian lands within a State as a means of promoting tribal economic development, self-sufficiency, and strong tribal governments.

2. Authorizes expressly a number of tribal-state gaming compacts between the State of California and specified Indian tribes.

3. Authorizes the conduct of Class III gaming activities to the extent such activities are permitted by state law, a gaming compact has been concluded by a federally recognized tribe and the State, and the compact has been approved by the Secretary of the Interior.

4. Limits the operation of Class III gaming activities to Indian lands acquired on or before October 17, 1988. Provides for certain exceptions to conduct gaming activities on Indian lands acquired after October 17, 1988.

5. Defines Indian lands to mean all lands within the limits of any Indian reservation, and any lands title to which is either held in trust by the United States for the benefit of any Indian tribe, or individual, or held by any Indian tribe or individual subject to restriction by the U.S. against alienation and over which an Indian tribe exercises governmental power.

6. Requires the State to negotiate to conclude a compact in good faith with an Indian tribe having jurisdiction over the Indian lands upon which the Class III gaming activity is to be conducted. Provides the U.S. district courts with jurisdiction over any cause of action initiated by a tribal government alleging that the State failed to negotiate in good faith to conclude a compact. Prescribes the remedy, mediation supervised by the courts, if it is found that the State failed to negotiate in good faith to conclude a compact.

7. Authorizes the Governor, under the California Constitution, to negotiate and conclude compacts, subject to ratification by the Legislature.

This bill ratifies the Compact entered into between the State of California and the Tribe executed on August 26, 2015 and supersedes the 1999 compact between the Tribe and the State of California. Under the 1999 compact, the Tribe is authorized to operate no more than 2,000 gaming devices (slot machines). Under this Compact the Tribe may operate a maximum of 2,500 slot machines at its current facility in Santa Barbara County.

The Tribe has agreed to pay the State its pro rata share of the costs the State incurs for the performance of its duties under this Compact as well as 6% of the casino’s net win, to be shared with tribes that are not gaming or that otherwise are not substantially benefiting from gaming. Additionally, this Compact provides a framework for the sharing of gaming revenue with the County of Santa Barbara and other local jurisdictions. Specifically, the Tribe may take annual credits of up to 60% (of the 6% net win) for infrastructure improvements and fire, law enforcement, public transit, education, tourism and other services including investments in renewable energy or water conservation projects and non-gaming related economic development and health care facilities that provide a mutual benefit to the Tribe and the local community.

Pursuant to the 1999 compact, the Tribe currently pays $5.8 million annually into the Special Distribution Fund (SDF) to cover the State’s regulatory costs relating to tribal gaming, including problem gambling programs, and $1.3 million annually into the Revenue Sharing Trust Fund (RSTF) which is directed to non-gaming and limited gaming tribes in California.

Under this Compact, it is estimated that the Tribe will pay approximately $1 million annually into the SDF and approximately $12 million annually into the RSTF or the Tribal Nation Grant Fund (TNGF). The Tribe’s $12 million payment into the RSTF may be offset by up to $7.2 million (the 60% credit referenced above), as specified.

Brief History of the Chumash Tribe and Background

According to information provided by the Tribe, the Chumash Tribe is a federally recognized Indian tribe listed in the Federal Register as the Santa Ynez Band of Chumash Mission Indians of the Santa Ynez Reservation. In fact, the Santa Ynez Band of Chumash Indians is the only federally-recognized Chumash tribe in the nation.

The Santa Ynez Reservation is located in Santa Barbara County and was established on December 27, 1901. In 1999, the Tribe and the State entered into a tribal-state compact which enabled the Tribe, through revenues generated by its gaming operation, to improve the governance, environment, education, health, safety, and general welfare of its citizens, and to promote a strong tribal government, self-sufficiency, and to provide essential government services to its citizens. Pursuant to the 1999 compact, the Tribe operates 2,000 Class III gaming devices and currently pays $5.8 million into the SDF and $1.3 million into the RSTF annually.

Today, the Tribe is on a path to economic self-sufficiency as a result of the revenue that has been generated over the past 15 years from its casino. Some tribal members continue to live on the reservation and others live in homes in surrounding communities. Currently, there are 249 residents on the Santa Ynez Reservation and 97 homes.

The Tribe’s current casino operation, known as the Chumash Casino Resort, has approximately 2,000 slot machines, offers 36 table games, restaurants, a hotel with 106 rooms and other venues. The casino resort complex also employs approximately 1,680 people. The Tribe reports that it is undergoing an expansion which will add 212 hotel rooms and an extra 60,000 square feet of gaming floor.

In addition, the Tribe has a diversified business portfolio – it owns or has ownership interests in a variety of businesses both on and off of the Santa Ynez Reservation including three hotels nearby in Solvang; an office building in Buellton which houses various tribal business functions; and, a federally qualified health clinic.

Furthermore, the Tribe currently pays Santa Barbara County over $2 million a year for a full-time on reservation deputy sheriff and two full-time fire fighter paramedic positions in the Santa Ynez and Solvang Fire Stations. The Tribe is also funding a $1.6 million ladder truck to be housed in the Solvang Fire Station.

Key Components of this Compact

Scope of Class III Gaming Authorized and Financial Terms. Under this Compact, the Tribe may operate a maximum of 2,500 gaming devices, banking or percentage card games, and any devices or games that are authorized under state law to the California State Lottery, provided that the Tribe will not offer such games through use of the Internet unless others in the state not affiliated with or licensed by the California State Lottery are permitted to do so under state and federal law. The Tribe shall not engage in Class III Gaming that is not expressly authorized in the Compact.

Authorized Gaming Facility. The Tribe may establish and operate not more than two gaming facilities and engage in Class III Gaming only on eligible Indian lands held in trust for the Tribe, located within the boundaries of the Tribe’s reservation as those boundaries exist as of the execution date of this Compact, as legally described in the Compact. If the Tribe chooses to operate more than one gaming facility, then one of the two gaming facilities shall have no more than five hundred (500) gaming devices and shall have a primary purpose other than gaming authorized under IGRA.

Exclusivity. Provides that in the event the exclusive right of Indian tribes to operate Class III gaming in California pursuant to the California Constitution is nullified by the enactment, amendment, or repeal of a state statute or constitutional provision or the conclusive and dispositive judicial construction of a statute or the state Constitution by a California appellate court after the effective date of this Compact, that gaming devices may lawfully be operated by non-Indian entities, the Tribe shall have the right to: (1) terminate this Compact, in which case the Tribe will lose the right to operate Class III gaming authorized by this Compact or (2) continue under this Compact with entitlement to a reduction of the rates specified below following conclusion of negotiations, to provide for (a) compensation to the State for the reasonable costs of regulation, as defined; (b) reasonable payments to local governments impacted by tribal government gaming; (c) grants for programs designed to address gambling addiction; and, (d) such assessments as may be permissible at such time under federal law. 

Payments to the SDF.  The Tribe shall pay to the State on a pro rata basis the costs the State incurs for the performance of all its duties under this Compact, as established by the monies appropriated in the annual Budget Act for the performance of their duties under the Class III Gaming Compacts each fiscal year for the California Gambling Control Commission (CGCC), the California Department of Justice, the Office of the Governor, the California Department of Public Health Programs, Office of Problem Gambling, the State Controller, the Department of Human Resources, and the Financial Information System for California, or any agency or agencies the State designates as a successor to them.  The Tribe’s pro rata share of the State’s costs in any given year this Compact is in effect shall be calculated using the following equation:

“The maximum number of gaming devices operated in the gaming facility for the previous fiscal year as determined by the State Gaming Agency, divided by the maximum number of gaming devices operated by all federally recognized tribes in California pursuant to tribal-state Class-III gaming compacts during the previous fiscal year, multiplied by costs, equals the Tribe’s pro rata share.”

Payments to the RSTF or the TNGF. If the Tribe operates more than three hundred fifty (350) gaming devices at any time in a given calendar year, it shall thereafter, including in that calendar year, pay to CGCC, for deposit into the RSTF or the TNGF, six percent (6%) of its net win from its operation of gaming devices in excess of three hundred fifty (350).

“Net Win” is defined as the drop from gaming devices, plus the redemption value of expired tickets, less fills, less payouts, less that portion of the gaming operation’s payments to a third-party wide-area progressive jackpot system provider that is contributed only to the progressive jackpot amount.

Credits Applied to the RSTF or the TNGF. The State agrees to provide the Tribe with an annual credit for up to sixty percent (60%) of the payments otherwise due to be paid into the RSTF or TNGF for the following:

1. Payments by the Tribe to the County of Santa Barbara and local jurisdictions operating facilities or providing services within the County for purposes of improved fire, law enforcement, public transit, education, tourism, and other services and infrastructure improvements intended to serve off-reservation needs of County residents – such payments shall be subject to approval by the County or local jurisdiction in the County and at least twenty percent (20%) of the annual credits must be utilized for the above stated purposes;
   
   

2. Non-gaming related capital investments and economic development projects by the Tribe on or off tribal trust lands that the State or State designated agency agrees provides mutual benefits to the Tribe and the State because, for instance, they have particular cultural, social or environmental value, or diversify the sources of revenue for the Tribe’s general fund;
   
   

3. Investments in, and any funds paid to the State in connection with, renewable energy projects that, in part, serve the gaming facility, to include facilities that incorporate charging stations for electric or other zero-emission vehicles that are available to patrons and employees of the gaming facility;
   
   

4. Payments to support capital improvements and operating expenses for facilities within California that provide health care services to tribal members, Indians, and non-Indians;
   

5. Investments by the Tribe for water treatment and conservation projects; and,
   

6. General welfare benefits provided by the Tribe for health care, education, and cultural or vocational purposes to non-enrolled members of the Tribe and other Native Americans in the community.

All excess authorized credits that cannot be applied in any one year because they would exceed the sixty percent (60%) may be applied as an annual credit in all following years that this Compact is in effect, in the same percentages, until completely exhausted.

Quarterly Contribution Report. At the time each quarterly payment is due, the Tribe shall submit to the State a report, prepared and certified by an authorized representative of the gaming operation. The report must include: (a) calculation of the maximum number of gaming devices operated each day, (b) the Net Win calculation, (c) the amount due the SDF, (d) calculation of the amount due to the RSTF/TNGF, and (e) the total amount of the quarterly payment.

Additional Compact Elements

• Gaming Ordinance and Regulations. Provides that all gaming activities conducted under this Compact shall, at a minimum, comply with (1) a gaming ordinance duly adopted by the Tribe and approved in accordance with IGRA, (2) all rules, regulations, procedures, specifications, and standards duly adopted by the National Indian Gaming Commission (NIGC), the Tribal Gaming Agency, and the State Gaming Agency, and (3) the provisions of this Compact, as specified.

• Licensing Requirements and Procedures. Provides that all persons in any way connected with the gaming operation or gaming facility who are required to be licensed or to submit to a background investigation under IGRA, and any others required to be licensed under this Compact, including, without limitation, all gaming employees, gaming resource suppliers, financial sources, and any other person having a significant influence over the gaming operation, must be licensed by the Tribal Gaming Agency and cannot have had any determination of suitability denied or revoked by the CGCC. Also, every gaming employee must obtain, and thereafter maintain current, a valid tribal gaming license, as specified.

• Minimum Internal Control Standards (MICS). Requires the Tribe to adopt and comply with standards that meet or exceed the federal NIGC standards. The MICS are incorporated in this Compact as an appendix (Appendix D), which shall be updated periodically by the State Gaming Agency and Tribal Gaming Agency, to ensure the MICS keep up with changing technology and industry standards.

• Patron Disputes. Provides that the Tribe (through its tribal gaming agency) must attempt to resolve patron disputes within three days of the play or operation of any game, including refusal to pay to a patron any alleged winnings from any gaming activities. If a patron is dissatisfied with the resolution, the Tribe shall inform the patron in writing with 15 days of the right to resolution of the dispute by the Tribal Gaming Agency. If dissatisfied with the resolution, the patron has the right to seek resolution in either the Tribe’s tribal court system or through the tribal claims commission. The Tribal Gaming Agency shall conduct an appropriate investigation, provide to the patron a copy of its procedures concerning patron complaints, and render a decision in accordance with industry practice. The decision shall be issued within 60 days of the patron's request. Any party dissatisfied with the award of the tribal court or tribal claims commission may, at the party’s election, appeal to the tribal appellate court or seek binding arbitration which shall be settled by a retired judge, in accordance with the streamlined arbitration rules and procedures of Judicial Arbitration and Mediation Services (JAMS). The Tribe agrees to wave its sovereign immunity in order to be compelled in federal or state court to abide by the resolution of arbitration.

• Public and Workplace Liability. Requires the Tribe to obtain and maintain a commercial general liability insurance policy which provides coverage of no less than $10 million and adopt a Tort Liability Ordinance stipulating that California tort law governs claims. Also, provides that California tort law shall apply to specified claims if the Tribe fails to adopt a Tort Liability Ordinance.

• Environmental Protections. Requires the Tribe to prepare a Tribal Environmental Impact Report (TEIR) and negotiate mitigation of any off-reservation impacts. The Tribe’s failure to prepare an adequate TEIR when required shall be deemed a breach of this Compact and furthermore shall be grounds for issuance of an injunction or other appropriate equitable relief. A completed TEIR must be filed with Santa Barbara County, the Department of Justice, the State Clearinghouse and the State Gaming Agency. Also, projects that have commenced prior to the effective date of this Compact, including the “hotel expansion project” will be subject to the relevant terms and conditions of the Tribe’s 1999 compact then in effect.

• Labor Provisions. Provides that the gaming activities authorized by this Compact may only commence after the Tribe has adopted an ordinance identical to the Tribal Labor Relations Ordinance (TRLO), referenced as Appendix C of the Compact, and the gaming activities may only continue as long as the Tribe maintains the ordinance. If the Tribe employs 250 or more persons in a tribal casino facility, then the provisions of the TLRO become effective. The TLRO provides for a secret ballot election. The new TLRO proscribed by this Compact is modeled after the Tribe’s 1999 TLRO with several modifications. The new TLRO provides for union neutrality. The Tribe will not oppose a union organization but can advocate the benefits of working for the Tribe. A labor union must issue a Notice of Intent or Organize (NOIO). For a period of 365 days following delivery of a NOIO, the union shall not engage in strikes, picketing, boycotts, attack websites, or other economic activity at or in relation to the tribal casino or related facility. During the 365 days after the Tribe received the NOIO, the union must collect dated and signed authorization cards and complete the secret ballot election. Failure to complete the secret ballot election within 365 days shall preclude the union from delivering another NOIO for a period of two years (730 days). After the certification that 30% of the employees have expressed an interest in the union, a notice of election shall be issued and the election shall be concluded within 30 calendar days thereafter. Secret ballot elections shall be held at the workplace and at least one neutral location. Employees may mail in ballots provided they are received by election day. Mediation for any collective bargaining agreement impasse shall be made in conjunction with the Federal Mediation and Conciliation Service (FMCS). The mediation process is modeled on the Agricultural Labor Relations Act and authorizes the mediator to resolve the impasse. According to the Administration, the appeals procedures have been streamlined significantly in comparison to the Tribe’s 1999 TLRO. Disputes are presented to an arbitrator with expertise in labor law and appropriate challenges to the arbitrator’s decision may be presented to a state superior court.

• Enhanced Audit and Compliance Review Procedures. In addition to providing for an annual independent audit, the Compact allows the state to conduct its own annual audit and compact compliance review.

• Inspection and Testing of Slot Machines. Requires slot machines to be tested, approved and certified by an independent gaming test laboratory or state governmental gaming test laboratory to ensure they are being operated according to specified technical standards. Also, requires the Tribal Gaming Agency to maintain adequate records that demonstrate compliance with software and hardware specifications. In addition, authorizes the State Gaming Agency to annually conduct up to four random inspections of slot machines in operation to confirm that the slot machines are operating in conformance with these standards.

• Prohibitions Regarding Minors. Provides that the Tribe shall prohibit persons under the age of eighteen (18) years from being present in any room or area in which gaming activities are being conducted unless the person is en route to a non-gaming area of the gaming facility, or is employed at the Gaming Facility in a capacity other than as a gaming employee.

• Health and Safety Standards. Provides that the Tribe has agreed to adopt and comply with State public health standards for food and beverage handling and federal water quality and safe drinking standards applicable in California.

• Problem Gambling. Requires the gaming operation to establish a program, approved by the Tribal Gaming Agency, to mitigate pathological and problem gaming by implementing specified measures.

• Alcohol Provisions. Makes it explicit that the purchase, sale, and service of alcoholic beverages shall be subject to state law (the Alcoholic Beverage Control Act). If the Tribe permits the consumption of alcoholic beverages in the gaming facility, the Tribe must prohibit persons under the age of twenty-one (21) years from purchasing, consuming, or possessing alcoholic beverages. The Tribe must also prohibit persons under the age of twenty-one (21) years from being present in any room or area in which alcoholic beverages may be consumed.

• Tobacco Provisions. Provides that the Tribe agrees to provide a non-smoking area in the gaming facility and to utilize a ventilation system throughout the gaming facility that exhausts tobacco smoke to the extent reasonably feasible under state-of-the-art technology existing as of the date of the construction or significant renovation of the gaming facility, and further agrees not to offer or sell tobacco to anyone under 18 years of age.

• Emergency Services Accessibility and Possession of Firearms. Provides that the Tribe must make reasonable provisions for adequate emergency fire, medical, and related relief and disaster services for patrons and employees. Also, prohibits the possession of firearms by any person in the gaming facility at all times except for federal, state, or local law enforcement personnel, or tribal law enforcement or security personnel, as authorized.

• Workers’ Compensation. Provides that the Tribe agrees to participate in the state’s workers’ compensation program with respect to employees at the casino. All disputes arising from the workers’ compensation laws shall be heard by the State Workers’ Compensation Appeals Board pursuant to the California Labor Code. The Tribe acknowledges the jurisdiction of the Board in such manners. Furthermore, the Tribe agrees that it will participate in the state’s unemployment compensation program for providing benefits and unemployment compensation disability benefits to employees at the casino. The Tribe shall withhold all taxes due to the state, except for Tribal members living on the Tribe’s reservation, and forward such amounts to the state.

• Effective Date. Provides that this Compact shall not be effective unless and until all of the following have occurred: (a) the Compact is ratified by statute in accordance with state law and (b) notice of approval or constructive approval is published in the Federal Register. Once effective, this Compact shall be in full force and effect for State law purposes for 25 years following the effective date.

• Amendment by Agreement. Provides that the terms and conditions of this Compact may be amended at any time by the mutual and written agreement of both parties during the term of this Compact, provided that each party voluntarily consents to such negotiations in writing. Any amendments to this Compact shall be deemed to supersede, supplant and extinguish all previous understandings and agreements on the subject.

Additional Relevant Background Information

Indian Gaming Regulatory Act (IGRA)

In 1988, Congress enacted the Indian Gaming Regulatory Act (IGRA) to provide a statutory basis for the operation and regulation of gaming on Indian lands. IGRA provides that an Indian tribe may conduct gaming activity on Indian lands if the activity “is not specifically prohibited by federal law and is conducted within a State which does not prohibit such gaming activity.”

IGRA distinguishes between three classes of gaming (Class I, Class II, and Class III) and provides for different forms of regulation for each class. Class I gaming includes “social games” for minor prizes or “traditional forms of Indian gaming.” Class II gaming is defined to include bingo and card games that are explicitly authorized by the laws of the state, or that are not explicitly prohibited by the laws of the state and are played at any location in the State, so long as the card games are played in conformity with those laws and regulations. Class III gaming includes such things as slot machines, casino games and banked card games such as black jack and baccarat. Class III gaming may only be conducted under terms of a compact negotiated between an Indian tribe and a State.

IGRA was enacted against a legal background in which Indian tribes and individuals generally are exempt from state taxation within their own territory. IGRA provides that with the exception of assessments permitted under the statute, to defray the State’s costs of regulating gaming activity, IGRA shall not be interpreted as conferring upon a State authority to impose any tax, fee, charge, or other assessment upon an Indian tribe to engage in Class III activity. Nor may a State refuse to enter into negotiations based on the lack of authority to impose such a tax, fee, charge, or other assessment.

When a tribe requests negotiations for a Class III compact, IGRA requires the State to negotiate with the Indian tribe in good faith. IGRA provides a comprehensive process to prevent an impasse in compact negotiations, which is triggered when a tribe files suit alleging that the State has refused to negotiate or has failed to negotiate in good faith.

Before 2000, The California Constitution prohibited Class III gaming. In 2000, California voters approved Proposition 1A which had been proposed by the Governor and passed by the Legislature. Proposition 1A amended the California Constitution to permit the State to negotiate compacts with federally recognized Indian tribes for certain Class III gaming activities. Because non-Indian parties were still forbidden from operating gaming facilities, Proposition 1A granted Indian tribes a “constitutionally protected monopoly on most types of Class III games in California.”

Rincon Decision

The U.S. Supreme Court in July 2011 refused to consider the decision of the Ninth Circuit Court rejecting a Class III Tribal-State Gaming Compact negotiated by Governor Schwarzenegger with the Rincon Band of Luiseno Mission Indians. The issue of this case's impact on Indian gaming throughout the country has been a topic of great debate.

As noted, IGRA authorizes states to receive compensation for costs related to tribal gaming such as regulation and gaming addiction, and to offset the effects of casinos on surrounding communities. However, states are prohibited from assessing taxes on tribal casino revenues, so unjustified payments to a state's General Fund are no longer permissible unless the tribes are getting something in return for the required payments, such as those authorized by IGRA.

Another vehicle for state receipt of casino payments above those payments must be in exchange for some benefit deemed "exclusive" to the tribe. To this end, it is fact that a number of other state (Governors) have attempted to create "exclusive grants" in favor of compact signatory tribes in return for payments to the state treasuries.

Rincon challenged the legality of California's "second generation" compacts pursuant to which the signatory tribes would be entitled to increase their slot machine count in return for paying percentages of the new slot machine revenue to the state's General Fund. The Ninth Circuit had affirmed a lower court decision that the new financial concessions were nothing more than a state tax on tribal casino revenues which is prohibited by IGRA.

Rincon had refused to sign the amended compact which already had been executed by several other tribes choosing instead to demand that it be given the expanded gaming opportunity without making the new financial concessions. The Ninth Circuit Court concluded that a “non-negotiable, mandatory payment of 10% of net win into the State treasury for unrestricted use yields public revenue, and is [therefore] a tax, and that the court was therefore required to consider the State’s demand as evidence of bad faith under IGRA’s statutes.”

The court noted that “the State could rebut the presumption of bad faith by demonstrating that the revenue demanded was to be used for the public interest, public safety, criminality, financial integrity, and adverse economic impacts on existing activities, but the State’s need for general tax revenue was insufficient to demonstrate good faith.”

Prior/Related Legislation

AB 475 (Bigelow, Chapter 8, Statutes of 2015) ratified the tribal-state gaming compact entered into between the State of California and Jackson Rancheria Band of Miwuk Indians, executed on February 1, 2015.

AB 315 (Bigelow, 2015) ratifies the amended and restated tribal-state gaming compact entered into between the State of California and the United Auburn Indian Community, executed on August 14, 2015. (Pending on the Assembly floor)

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

SUPPORT: (Verified 8/31/15)

Agua Caliente Band of Cahuilla Indians

Barona Band of mission Indians

Blue Lake Rancheria Tribe

California Labor Federation

International Association of Bridge, Structural & Ornamental Iron Workers

Office of the Sheriff Santa Barbara County

Rincon Band of Luiseno Mission Indians

San Manuel Band of Mission Indians

Santa Ynez Band of Chumash Indians

State Building and Construction Trades Council

Sycuan Band of the Kumeyaay Nation

Tribal Alliance of Sovereign Indian Nations

UNITE HERE

United Auburn Indian Community

OPPOSITION: (Verified 8/31/15)

None received

Prepared by: Arthur Terzakis / G.O. / (916) 651-1530

9/1/15 20:33:08

**** END ****

 THIRD READING 

Bill No: AB 1540

Author: Committee on Governmental Organization

Introduced: 3/26/15

Vote: 21

SENATE GOVERNMENTAL ORG. COMMITTEE: 12-0, 6/29/15

AYES: Hall, Berryhill, Block, Gaines, Glazer, Hernandez, Hill, Hueso, Lara, McGuire, Runner, Vidak

NO VOTE RECORDED: Galgiani

ASSEMBLY FLOOR: 78-0, 5/14/15 (Consent) - See last page for vote

SUBJECT: Tribal gaming

SOURCE: Author

DIGEST: This bill reorganizes statutes pertaining to Indian gaming compacts primarily by moving them to a newly created Title 16.5 on Tribal Gaming in the Government Code; and makes other minor, technical, nonsubstantive changes to these provisions

ANALYSIS: Existing federal law, the Indian Gaming Regulatory Act of 1988 provides for the negotiation and execution of compacts for the purpose of authorizing class III gaming on Indian lands within a state. Additionally, the California Constitution authorizes the Governor to negotiate and conclude compacts, subject to ratification by the Legislature.

Existing law:

1. Establishes the Indian Gaming Special Distribution Fund (SDF) in the State Treasury for the receipt of revenue contributions made by tribal governments pursuant to the terms of the 1999 model Tribal-State Gaming Compacts.

2. Authorizes the Legislature to appropriate money from the SDF as follows: (a) Grants for programs designed to address gambling addiction; (b) Grants for the support of state and local government agencies impacted by tribal government gaming; (c) Compensation for regulatory costs incurred by the California Gambling Control Commission (CGCC) and the Department of Justice (DOJ) in connection with the implementation and administration of compacts; (d) Payment of shortfalls that may occur in the Indian Gaming Revenue Sharing Trust Fund (RSTF); (e) Disbursements for the purpose of implementing the terms of tribal labor relations ordinances promulgated in accordance with the terms of the 1999 compacts; and, (f) Any other purpose specified by law.

3. Provides that the priority for funding from the SDF is in the following descending order: (a) To make payments of any shortfalls that may occur in the RSTF; (b) Grants for programs designed to address gambling addiction; (c) Compensation to the CGCC and DOJ for regulatory functions that directly relates to Indian gaming; and, (d) Grants for the support of local government agencies impacted by tribal gaming.

4. Establishes the RSTF in the State Treasury for the receipt and deposit of moneys derived from gaming device license fees paid by Indian tribes with 1999 compacts. Money in that fund is available to the CGCC, upon appropriation by the Legislature, for distribution to non-compact tribes, according to the terms of the compacts.

5. Requires the CGCC to annually determine the aggregate amount necessary to make up the difference between $1.1 million and the actual amount paid to each eligible recipient Indian tribe during the Fiscal Year from the RSTF. The CGCC must report the amount of the deficiency to the Budget Committees in each house of the Legislature. Upon appropriation by the Legislature, the CGCC shall make payments to eligible recipient tribes, as specified.

This bill repeals, reorganizes and recasts various statutory provisions related to tribal compacts and Indian gaming into one stand-alone Title 16.5 in the Government Code; and makes other minor, technical, and nonsubstantive changes to these provisions.

Background

Purpose of AB 1540. Currently, Indian gaming statutes are found in two separate chapters in the Government Code:

• Title 2, Part 2, Chapter 1, Article 1 contains laws related to: (1) Tribal-State Gaming Compacts, (2) the Indian Gaming RSTF, (3) the Indian Gaming SDF; and (4) the methodology for the backfill of shortfalls in revenues in the RSTF from the SDF.

• Title 2, Part 2, Chapter 7.5 contains the laws related to Grants of Indian Gaming Revenue to Local Government Agencies.

This bill is a code maintenance proposal that was developed in consultation with the Legislative Counsel’s office to consolidate all of the laws related to Indian gaming into one stand-alone Title in the Government Code, namely, Title 16.5 – Tribal Gaming.

Prior Legislation

AB 1426 (Governmental Organization, 2013) would have reorganized statutes pertaining to Indian gaming compacts primarily by moving them to a newly created Title 16.5 on Tribal Gaming in the Government Code. (The bill died on the Senate Inactive File)

AB 2695 (Governmental Organization, 2012) would have reorganized statutes pertaining to Indian gaming compacts primarily by moving them to a newly created Title 16.5 on Tribal Gaming in the Government Code. (The bill died on the Senate Inactive File)

FISCAL EFFECT: Appropriation: No Fiscal Com.: No Local: No

SUPPORT: (Verified 8/26/15)

None received

OPPOSITION: (Verified 8/26/15)

None received

ASSEMBLY FLOOR: 78-0, 5/14/15

AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Perea, Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Atkins

NO VOTE RECORDED: Linder, Medina

Prepared by: Arthur Terzakis / G.O. / (916) 651-1530

8/26/15 17:33:41

**** END ****

 THIRD READING 

Bill No: AB 1540

Author: Committee on Governmental Organization

Introduced: 3/26/15

Vote: 21

SENATE GOVERNMENTAL ORG. COMMITTEE: 12-0, 6/29/15

AYES: Hall, Berryhill, Block, Gaines, Glazer, Hernandez, Hill, Hueso, Lara, McGuire, Runner, Vidak

NO VOTE RECORDED: Galgiani

ASSEMBLY FLOOR: 78-0, 5/14/15 (Consent) - See last page for vote

SUBJECT: Tribal gaming

SOURCE: Author

DIGEST: This bill reorganizes statutes pertaining to Indian gaming compacts primarily by moving them to a newly created Title 16.5 on Tribal Gaming in the Government Code; and makes other minor, technical, nonsubstantive changes to these provisions

ANALYSIS: Existing federal law, the Indian Gaming Regulatory Act of 1988 provides for the negotiation and execution of compacts for the purpose of authorizing class III gaming on Indian lands within a state. Additionally, the California Constitution authorizes the Governor to negotiate and conclude compacts, subject to ratification by the Legislature.

Existing law:

1. Establishes the Indian Gaming Special Distribution Fund (SDF) in the State Treasury for the receipt of revenue contributions made by tribal governments pursuant to the terms of the 1999 model Tribal-State Gaming Compacts.

2. Authorizes the Legislature to appropriate money from the SDF as follows: (a) Grants for programs designed to address gambling addiction; (b) Grants for the support of state and local government agencies impacted by tribal government gaming; (c) Compensation for regulatory costs incurred by the California Gambling Control Commission (CGCC) and the Department of Justice (DOJ) in connection with the implementation and administration of compacts; (d) Payment of shortfalls that may occur in the Indian Gaming Revenue Sharing Trust Fund (RSTF); (e) Disbursements for the purpose of implementing the terms of tribal labor relations ordinances promulgated in accordance with the terms of the 1999 compacts; and, (f) Any other purpose specified by law.

3. Provides that the priority for funding from the SDF is in the following descending order: (a) To make payments of any shortfalls that may occur in the RSTF; (b) Grants for programs designed to address gambling addiction; (c) Compensation to the CGCC and DOJ for regulatory functions that directly relates to Indian gaming; and, (d) Grants for the support of local government agencies impacted by tribal gaming.

4. Establishes the RSTF in the State Treasury for the receipt and deposit of moneys derived from gaming device license fees paid by Indian tribes with 1999 compacts. Money in that fund is available to the CGCC, upon appropriation by the Legislature, for distribution to non-compact tribes, according to the terms of the compacts.

5. Requires the CGCC to annually determine the aggregate amount necessary to make up the difference between $1.1 million and the actual amount paid to each eligible recipient Indian tribe during the Fiscal Year from the RSTF. The CGCC must report the amount of the deficiency to the Budget Committees in each house of the Legislature. Upon appropriation by the Legislature, the CGCC shall make payments to eligible recipient tribes, as specified.

This bill repeals, reorganizes and recasts various statutory provisions related to tribal compacts and Indian gaming into one stand-alone Title 16.5 in the Government Code; and makes other minor, technical, and nonsubstantive changes to these provisions.

Background

Purpose of AB 1540. Currently, Indian gaming statutes are found in two separate chapters in the Government Code:

• Title 2, Part 2, Chapter 1, Article 1 contains laws related to: (1) Tribal-State Gaming Compacts, (2) the Indian Gaming RSTF, (3) the Indian Gaming SDF; and (4) the methodology for the backfill of shortfalls in revenues in the RSTF from the SDF.

• Title 2, Part 2, Chapter 7.5 contains the laws related to Grants of Indian Gaming Revenue to Local Government Agencies.

This bill is a code maintenance proposal that was developed in consultation with the Legislative Counsel’s office to consolidate all of the laws related to Indian gaming into one stand-alone Title in the Government Code, namely, Title 16.5 – Tribal Gaming.

Prior Legislation

AB 1426 (Governmental Organization, 2013) would have reorganized statutes pertaining to Indian gaming compacts primarily by moving them to a newly created Title 16.5 on Tribal Gaming in the Government Code. (The bill died on the Senate Inactive File)

AB 2695 (Governmental Organization, 2012) would have reorganized statutes pertaining to Indian gaming compacts primarily by moving them to a newly created Title 16.5 on Tribal Gaming in the Government Code. (The bill died on the Senate Inactive File)

FISCAL EFFECT: Appropriation: No Fiscal Com.: No Local: No

SUPPORT: (Verified 6/30/15)

None received

OPPOSITION: (Verified 6/30/15)

None received

ASSEMBLY FLOOR: 78-0, 5/14/15

AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Perea, Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Atkins

NO VOTE RECORDED: Linder, Medina

Prepared by: Arthur Terzakis / G.O. / (916) 651-1530

7/7/15 10:35:19

**** END ****

SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION

Senator Isadore Hall, III

Chair

2015 - 2016 Regular

Bill No: AB 1540 Hearing Date: 6/29/2015

SUBJECT: Tribal gaming

DIGEST: This bill reorganizes statutes pertaining to Indian gaming compacts primarily by moving them to a newly created Title 16.5 on Tribal Gaming in the Government Code.

ANALYSIS:

Existing law:

1. The federal Indian Gaming Regulatory Act of 1988 provides for the negotiation and execution of compacts for the purpose of authorizing class III gaming on Indian lands within a state. Additionally, the California Constitution authorizes the Governor to negotiate and conclude compacts, subject to ratification by the Legislature.

2. Establishes the Indian Gaming Special Distribution Fund (SDF) in the State Treasury for the receipt of revenue contributions made by tribal governments pursuant to the terms of the 1999 model Tribal-State Gaming Compacts.

3. Authorizes the Legislature to appropriate money from the SDF as follows: (a) Grants for programs designed to address gambling addiction; (b) Grants for the support of state and local government agencies impacted by tribal government gaming; (c) Compensation for regulatory costs incurred by the California Gambling Control Commission (CGCC) and the Department of Justice (DOJ) in connection with the implementation and administration of compacts; (d) Payment of shortfalls that may occur in the Indian Gaming Revenue Sharing Trust Fund (RSTF); (e) Disbursements for the purpose of implementing the terms of tribal labor relations ordinances promulgated in accordance with the terms of the 1999 compacts; and, (f) Any other purpose specified by law.

4. Provides that the priority for funding from the SDF is in the following descending order: (a) To make payments of any shortfalls that may occur in the RSTF; (b) Grants for programs designed to address gambling addiction; (c) Compensation to the CGCC and DOJ for regulatory functions that directly relates to Indian gaming; and, (d) Grants for the support of local government agencies impacted by tribal gaming.

5. Establishes the RSTF in the State Treasury for the receipt and deposit of moneys derived from gaming device license fees paid by Indian tribes with 1999 compacts. Money in that fund is available to the CGCC, upon appropriation by the Legislature, for distribution to non-compact tribes, according to the terms of the compacts.

6. Requires the CGCC to annually determine the aggregate amount necessary to make up the difference between $1.1 million and the actual amount paid to each eligible recipient Indian tribe during the Fiscal Year from the RSTF. The CGCC must report the amount of the deficiency to the Budget Committees in each house of the Legislature. Upon appropriation by the Legislature, the CGCC shall make payments to eligible recipient tribes, as specified.

This bill:

1. Repeals, reorganizes and recasts various statutory provisions related to tribal compacts and Indian gaming into one stand-alone Title 16.5 in the Government Code.
   
   

2. Makes other minor, technical, and nonsubstantive changes to these provisions.

Background

Purpose of AB 1540. Currently, Indian gaming statutes are found in two separate chapters in the Government Code. Government Code Title 2, Part 2, Chapter 1, Article 1 contains laws related to: (1) Tribal-State Gaming Compacts, (2) the Indian Gaming RSTF, (3) the Indian Gaming SDF; and (4) the methodology for the backfill of shortfalls in revenues in the RSTF from the SDF. Government Code Title 2, Part 2, Chapter 7.5 contains the laws related to Grants of Indian Gaming Revenue to Local Government Agencies.

According to the author’s office, this bill is a code maintenance proposal that was developed in consultation with the Legislative Counsel’s office to consolidate all of the laws related to Indian gaming into one stand-alone Title in the Government Code, namely, Title 16.5 – Tribal Gaming.

Prior/Related Legislation

AB 1426 (Governmental Organization, 2013) would have reorganized statutes pertaining to Indian gaming compacts primarily by moving them to a newly created Title 16.5 on Tribal Gaming in the Government Code. (Died on Senate Inactive File)

AB 2695 (Governmental Organization, 2012) would have reorganized statutes pertaining to Indian gaming compacts primarily by moving them to a newly created Title 16.5 on Tribal Gaming in the Government Code. Also would have made other minor, technical changes to these provisions. (Died on Senate Inactive File)

AB 1417 (Governmental Organization, Chapter 736, Statutes of 2011) as introduced, this bill would have reorganized statutes pertaining to Indian gaming compacts primarily by moving them to a newly created Title 16.5 on Tribal Gaming in the Government Code. (AB 1417 was subsequently gutted in this committee to become the vehicle for the distribution of $9.1 million from the SDF to the CGCC to provide grants to local agencies.)

AB 2794 (Governmental Organization, 2010) would have established a stand-alone article within the Government Code for tribal compacts. (Died at Senate Desk)

SB 827 (Wright, Chapter 206, Statutes of 2009) as introduced, would have established a stand-alone article within the Government Code for tribal compacts. (Gutted and amended in the Assembly to become a bill dealing with the South Coast Air Quality Management District)

AB 1576 (Chesbro, 2009) as introduced, would have established a stand-alone article within the Government Code for tribal compacts. (Gutted in the Senate to be the ratification vehicle for the Habematolel Pomo of Upper Lake Compact, executed on September 2, 2009)

AB 3072 (Price, Chapter 334, Statutes of 2008) as introduced, would have established a stand-alone article within the Government Code for tribal compacts. (Gutted and amended on the Senate Floor to ratify an amended tribal-state gaming compact entered into by the State of California and the Shingle Springs Band of Miwok Indians)

AB 1275 (J. Horton, 2003) would have established a stand-alone chapter within the Government Code for tribal compacts. (Died on Senate Third Reading file)

AB 2286 (J. Horton, 2002) would have established a stand-alone chapter within the Government Code for compacts enacted and approved under Proposition 1A. (Died on Senate Inactive File)

FISCAL EFFECT: Appropriation: No Fiscal Com.: No Local: No

SUPPORT:

None received

OPPOSITION:

None received

Date of Hearing: May 6, 2015

ASSEMBLY COMMITTEE ON GOVERNMENTAL ORGANIZATION

Adam Gray, Chair

ABPCA Bill Id:AB 1540

Author:(Committee on Governmental Organization) – As Introduced Ver:March 26, 2015

SUBJECT: Tribal gaming

SUMMARY: Repeals and renumbers sections of the Government Code related to Indian gaming into one stand-alone Title in the Government Code. Makes other technical non-substantive changes.

EXISTING LAW:

1) Existing federal law, the Indian Gaming Regulatory Act of 1988, provides for the negotiation and execution of compacts for the purpose of authorizing class III gaming on Indian lands within a state. Additionally, the California Constitution authorizes the Governor to negotiate and conclude compacts, subject to ratification by the Legislature.

2) Establishes the Indian Gaming Special Distribution Fund (SDF) in the State Treasury for the receipt of revenue contributions made by tribal governments pursuant to the terms of the 1999 model Tribal-State Gaming Compacts (compacts).

3) Authorizes the Legislature to appropriate money from the SDF as follows: (1) Grants for programs designed to address gambling addiction; (2) Grants for the support of state and local government agencies impacted by tribal government gaming; (3) Compensation for regulatory costs incurred by the California Gambling Control Commission (CGCC) and the Department of Justice (DOJ) in connection with the implementation and administration of compacts; (4) Payment of shortfalls that may occur in the Indian Gaming Revenue Sharing Trust Fund (RSTF); (5) Disbursements for the purpose of implementing the terms of tribal labor relations ordinances promulgated in accordance with the terms of the 1999 compacts; and, (6) Any other purpose specified by law.

4) Provides that the priority for funding from the SDF is in the following descending order: (1) To make payments of any shortfalls that may occur in the RSTF; (2) Grants for programs designed to address gambling addiction; (3) Compensation to the CGCC and DOJ for regulatory functions that directly relates to Indian gaming; and, (4) Grants for the support of local government agencies impacted by tribal gaming.

5) Establishes the RSTF in the State Treasury for the receipt and deposit of moneys derived from gaming device license fees paid by Indian tribes with 1999 compacts. Money in that fund is available to the CGCC, upon appropriation by the Legislature, for distribution to non-compact tribes, according to the terms of the compacts.

6) Requires the CGCC to annually determine the aggregate amount necessary to make up the difference between $1.1 million and the actual amount paid to each eligible recipient Indian tribe during the Fiscal Year from the RSTF. The CGCC must report the amount of the deficiency to the Budget Committees in each house of the Legislature. Upon appropriation by the Legislature, the CGCC shall make payments to eligible recipient tribes, as specified.

FISCAL EFFECT: This bill is keyed non-fiscal by Legislative Counsel.

COMMENTS:

Purpose of the bill: This measure is a code maintenance proposal that was developed in consultation with the Legislative Counsel’s office to consolidate all of the laws related to Indian gaming into one stand-alone Title in the Government Code.

Currently, Indian gaming laws are found in two separate chapters in the Government Code. Government Code Title 2, Part 2, Chapter 1, Article 1 contains laws related to: (1) Tribal-State Gaming Compacts, (2) the Indian Gaming Revenue Sharing Trust Fund (RSTF), (3) the Indian Gaming Special Distribution Fund (SDF); and (4) the methodology for the backfill of shortfalls in revenues in the RSTF from the SDF. Government Code Title 2, Part 2, Chapter 7.5 contains the laws related to Grants of Indian Gaming Revenue to Local Government Agencies. AB 1426 is a code maintenance proposal that will consolidate all Indian gaming related laws into one stand-alone Title in the Government Code, namely, Title 16.5 – Tribal Gaming.

REGISTERED SUPPORT / OPPOSITION:

Support

None on file

Opposition

None on file

Analysis Prepared by: Eric Johnson / G.O. / (916) 319-2531