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 Agua Caliente Band of Cahuilla Indians, executed on August 4, 2016. 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 Agua Caliente Band of Cahuilla Indians, executed on August 4, 2016. 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 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.

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 2915

Author:(Eduardo Garcia)

As Amended Ver:August 16, 2016

2/3 vote. Urgency

Original Committee Reference: G.O.

SUMMARY: Ratifies the tribal-state gaming compact (Compact) entered into between the State of California and the Agua Caliente Band of Cahuilla Indians (Tribe) executed on August 4, 2016. In addition, 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 the Compact entered into between the State of California and the Agua Caliente Band of Cahuilla Indians executed on August 4, 2016.
2. Supersede the 2006 amended compact (SB 957 (Torlakson), Chapter 41, Statutes of 2007) between the State and Agua Caliente.
3. Authorize the Tribe to operate 5,000 gaming devices within the boundaries of the Tribe's Reservation, as described (Appendix A).
4. With respect to this Compact, the Tribe has agreed to pay the State its pro rata share of costs the State incurs for the performance of its duties under the Compact. The Tribe has also agreed to make payments into the Revenue Sharing Trust Fund (RSTF) and the Tribal Nation Grant Fund (TNGF) that are based on a percentage of Net Win generated from gaming devices – the percentage increases as the number of slots increases. Specifically, the Tribe will pay 6% of Net Win on devices up to 2,500; 7% on devices between 2,501 and 3,000; 8% on devices between 3,001 and 3,500; 9% on devices between 3,501 and 4,000; 10% on devices between 4,001 and 4,500; and, up to 11% on devices between 4,501 and 5,000.
5. Provide that from its payments to the RSTF and the TNGF, the Tribe may take credits of up to 60% for infrastructure improvements that in part benefit county or local jurisdiction residents, as well as those of the Tribe, fire, law enforcement, public transit, education, tourism and other services including investments in renewable energy projects and payments to support capital improvements and operating expenses for facilities within California that provide health care services to tribal members, Indians, and non-Indians.
6. This Compact: a) provides a regulatory framework that respects the role of the tribal gaming agency as the primary regulator while also ensuring that state gaming regulators fulfill their responsibilities; b) requires the Tribe to conduct its gaming activities pursuant to an internal control system that implements minimum internal controls that are no less stringent than those in federal regulations; c) requires the Tribe to adopt a Tribal Labor Relations Ordinance, as specified; and, d) contains provisions to protect the health and safety of patrons, guests, and employees.
7. Provide that, in deference to tribal sovereignty, certain actions are not deemed projects for purposes of the CEQA; and, stipulate, 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.
8. Provide once effective, this Compact shall be in full force and effect for 25 years following the effective date.
9. Contain an urgency clause, allowing this bill to take effect immediately upon enactment.

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 (U.S.) 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.

FISCAL EFFECT: Unknown

COMMENTS: On August 15, 2016, the Assembly Governmental Organization Committee held an informational hearing on the tribal gaming compact entered into between the State of California and the Agua Caliente Band of Cahuilla Indians.

Brief History and Background:

According to information provided by the Tribe, the Agua Caliente Band of Cahuilla Indians is a federally recognized Indian tribe located in the Coachella Valley within Riverside County. The tribal headquarters are located in Palm Springs, which derives its name from the ancient hot mineral springs located in downtown Palm Springs on the Tribe's reservation. The Tribe's reservation covers approximately 32,000 acres of the Coachella Valley in a "checker-board" pattern, and was created by Presidential Executive Orders in the late 1870’s and spans large portions of the cities of Palm Springs, Rancho Mirage, and Cathedral City.

The Tribe is governed by a 5-member Tribal Council pursuant to the Tribe's Constitution and Bylaws, which was adopted and approved by the Tribe and the federal government in June of 1955. The Tribe has approximately 500 members. The tribal government provides a wide array of services and benefits to tribal members related to healthcare, education, cultural preservation, and general welfare. The capacity of the Tribe to provide for its members and strengthen the tribal government has greatly increased since the establishment of tribal gaming.

In 1999, the Tribe and the State entered into a compact that 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. In 2006, based on then-existing economic indicators the Tribe and the State entered into an amendment to the 1999 Compact, which, among other things, significantly increased the gaming operation's earning potential and revenue payments to the State. Since the time that the State and the Tribe entered into the 2006 compact, circumstances in the overall economy, the casino gaming market, and the law, such as the Ninth Circuit's decision in Rincon Band of Luiseno Mission Indians v. Schwarzenegger, have changed dramatically.

The Compact's preamble states, the Tribe and the State desire to enter into this Compact to ensure that the Tribe is the primary beneficiary of its gaming operation and can continue to fund essential tribal government services through gaming revenue.

With approximately 2,500 team members working within gaming and non-gaming tribal economic development ventures, the Tribe is one of the largest employers in the Coachella Valley. The Tribe currently operates two casinos, two golf courses, multiple restaurants, an entertainment venue, and also manages its real estate holdings, which include numerous leases of reservation lands for commercial and residential development and other purposes. The Tribe also operates the Indian Canyons and Tahquitz Canyon located on the Tribe’s reservation. These recreational areas located on Cahuilla ancestral lands are open to the public and offer over 60 miles of hiking trails and other activities so that all may enjoy the beauty of natural springs, native palm groves, wildlife, and multiple waterfalls. Tribal government departments, including but not limited to Economic Development, Planning and Natural Resources, Tribal Historic Preservation, and Emergency Services, closely partner with other local governments and communities on infrastructure issues, as well as other projects and initiatives to address shared concerns.

The Tribe is a major contributor to local public and nonprofit organizations and government agencies located within and outside of the reservation in the cities of Palm Springs, Rancho Mirage, Cathedral City, and in areas throughout the Coachella Valley and beyond. The Tribe recently established the Richard M. Milanovich Fellowship to provide funding for Native American students who are members of any federally recognized Indian tribe so that they may study, live and work in Washington D.C. through the George Washington University's Native American Political Leadership Program.

The Compact's preamble states, this Compact will afford the Tribe primary responsibility over the regulation of its gaming facility and will enhance the Tribe's economic development and self-sufficiency. The State and the Tribe agree that all terms of this Compact are intended to be binding and enforceable.

Key Components of the Compact:

Authorized Gaming Facility: The Tribe may establish and operate not more than six gaming facilities (only two of which may have more than 500 gaming devices) 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 and trust lands as those boundaries exist as of the execution date of this Compact, as legally described in the Compact (Appendix A).

Scope of Class III Gaming Authorized: The Tribe is authorized to operate up to a total of 5,000 gaming devices (slot machines); banking or percentage card games; 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; and, off-track wagering on horse races at a satellite wagering facility pursuant to certain requirements identified in Appendix D. The Tribe shall not engage in Class III gaming that is not expressly authorized in the Compact.

Payments to the RSTF or the TNGF: The Tribe shall make payments, which shall be used exclusively for the RSTF and the TNGF, based on the following schedule:

"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 annual credits for up to 60% of the payments otherwise due to be paid into the RSTF or TNGF for the following:

1. Investments by the Tribe 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;
2. The costs of services provided by the Tribe, or payments made to the county, local jurisdictions, or non-profit and civic organizations for purposes of improved fire, law enforcement, public transit, education, tourism, and other services and infrastructure improvements that serve off-reservation needs of county or local jurisdiction residents as well as those of the Tribe;
3. Costs incurred by the Tribe to fund the construction and operation of a museum or to preserve cultural resources within the county;
4. Payments to support operating expenses and capital improvements for non-tribal governmental agencies or facilities operating within the county or local jurisdictions;
5. Payments to support capital improvements and operating expenses for facilities within California that provide health care services to tribal members, Indians, and non-Indians;
6. Non-gaming related capital investments and economic development or other projects by the Tribe that provide mutual benefits to the Tribe and the State, the county or local jurisdictions because, for instance, they have particular cultural, social, or environmental value, or diversify the sources of revenue for the Tribe’s general fund;
7. Payments made by the Tribe pursuant to agreements with the county or local jurisdictions for reimbursement for any loss of property tax revenues, sales tax revenues that would otherwise be due for retail sales at the Tribe's gaming facility, or transient occupancy tax at the Tribe’s hotel if it were not located on Indian lands; and
8. Payments to Indians who are not members of the Tribe for educational, healthcare, general welfare, or vocational purposes, or to other federally recognized tribes for governmental or general welfare purposes.

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.

Payments to the Special Distribution Fund (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.

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.

Additional Compact Components:

Cost Reimbursement and Mitigation to Local Governments: The Tribe shall enter into agreements with local jurisdictions or state agencies, as appropriate, for such undertakings and services that mitigate the impacts of the gaming facility, as defined, and thereby benefit the gaming facility, the Tribe, or other affected jurisdictions. Copies of all such agreements shall be provided to the State. The agreements with local jurisdictions or state agencies, as appropriate, required by this provision are distinct from those agreements associated with a specific project and required by section 11.0 (Off-Reservation Environmental and Economic Impacts).

Off-Reservation Environmental and Economic Impacts: The Tribe must prepare a Tribal Environmental Impact Report (TEIR) and negotiate mitigation of any off-reservation impacts, including an evaluation of energy consumption, prior to initiating the development of a Project for a facility. The Compact provides procedures regarding the 1) Notice of Preparation of Draft TEIR, 2) Notice of Completion of Draft TEIR, and 3) Issuance of Final TEIR. The Tribe’s failure to prepare an adequate TEIR when required may warrant an injunction where appropriate. Before commencement of a Project, and no later than the issuance of the final TEIR, the Tribe shall negotiate an intergovernmental agreement with the California Department of Transportation (Caltrans) if state roads are impacted. A completed TEIR must be filed with the County, the Department of Justice, the CGCC, and the State Clearinghouse.

Gaming Ordinance and Regulations: 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: 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. In addition, 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 conduct its gaming activities pursuant to an internal control system that implements MICS that are no less stringent than specified MICS of the NIGC. It requires gaming to operate pursuant to a written internal control system that reasonably assures that assets are safeguarded and accountability over assets is maintained, liabilities are properly recorded and contingent liabilities are properly disclosed, financial records are accurate and reliable, transactions are performed in accordance with the Tribe's authorization.

The Tribe is required to provide to the CGCC, upon written request, a copy of the independent certified public accountant agreed-upon procedures report conducted annually for submission to the NIGC pursuant to federal law. This report verifies that the gaming operation is in compliance with the NIGC's minimum internal control standards.

Patron Disputes: The Tribal Gaming Agency shall promulgate regulations governing patron disputes over the play or operation of any game, including any refusal to pay a patron any alleged winnings from any gaming activities, while adhering to regulations that meet minimum standards, as defined.

Public and Workplace Liability: The Tribe is required to obtain and maintain a commercial general liability insurance policy that provides coverage of no less than $10 million. Also, requires the Tribe to adopt a Tort Liability Ordinance containing provisions that are the same as California tort law to govern all claims of bodily injury, personal injury, or property damage arising out of, connected with, or relating to the casino. The Tribe must consent to jurisdiction in the Tribe's tribal court system, once a tribal court system is established, or by binding arbitration before a JAMS operator, in accordance with JAMS Comprehensive Arbitration. Any party dissatisfied with the award of the arbitrator may invoke the JAMS Optional Arbitration Appeal Procedure. The cost and expenses of arbitration shall be initially borne equally by the parties but the JAMS arbitrator shall award to the prevailing party its costs and expenses (but no attorney fees). The Tribe consents to the jurisdiction of the tribal court and the arbitrator’s jurisdiction, the JAMS Optional Appeal Procedure and any action to enforce their judgments or the obligations in this section.

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 Gaming Devices: Requires that the software used for the play on a gaming device to be tested, approved and certified by an independent or state governmental gaming test laboratory. Gaming devices are required to be tested by a gaming test laboratory and the Tribe must ensure that it is operating in accordance with the manufacturer's specifications. The State Gaming Agency would be authorized to annually conduct up to four random inspections of gaming devices in operation to confirm that the slot machines are operating in conformance with these standards.

Labor Provisions: Rather than requiring side agreements between the Tribe and labor organizations, the Compact incorporates provisions of Tribal Labor Relations Ordinance (TLRO) that has the support of labor entities. The Compact provides that the gaming activities authorized by this Compact may only commence after the Tribe has adopted an ordinance identical to the TLRO provided for in 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 TLRO first incorporated into the 2015 compact with the Santa Ynez Band of Chumash Indians and reflects significant changes from the 1999 TLRO.

The TLRO provides for a neutrality agreement between the Tribe and union if the union requests this. If the union first offers in writing not to engage in strikes, picketing, boycotts, attack websites, or other economic activity at or in relation to the tribal casino or related facility and issue and deliver a Notice of Intent to Organize (NOIO) to the Tribe, then the Tribe must not disparage or advocate opposition to the union. The Tribe may make factual representations to employees concerning employment with the Tribe, but may not take actions or make statements that could reasonably be interpreted as criticizing the union or advocating against unionization. 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. Secret ballot elections shall be held at a location or locations determined by the employer, but there must be at least neutral location. Employee may mail ballots so long as received by Election Day. Failure to complete the secret ballot election within 365 day under the neutrality agreement shall preclude the union from delivering another NOIO for a period of 730 days

Where there is a neutrality agreement, the TLRO provides for resolution of collective bargaining impasse through interest arbitration by the Federal Mediation and Conciliation Service (FMCS). The interest arbitration procedure is modeled on the Mandatory Mediation and Conciliation provisions in the Agricultural Labor Relations Act. Other disputes are presented to an arbitrator with expertise in labor law. Appropriate challenges to the arbitrator’s decision may be presented in court.

Workers' Compensation: The Tribe agrees that it will participate in the State's workers' compensation program with respect to employees employed at the gaming operation and the gaming facility. In lieu of permitting the gaming operation and gaming facility to participate in the State’s workers’ compensation system, the Tribe may create and maintain a system that provides redress for employee work-related injuries through requiring insurance or self-insurance, as defined. The Tribe agrees that it will participate in the State's program for providing unemployment compensation benefits and unemployment compensation disability benefits with respect to employees employed at the gaming operation or gaming facility. 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.

Prohibitions Regarding Minors: Prohibits 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.

Use and Sale of Tobacco: The Tribe agrees to provide a non-smoking area in the gaming facility and to maintain ventilation, filtration, purification or other technologies throughout the gaming facility, where reasonably feasible after consideration of engineering, economic and scientific factors, and further agrees not to offer or sell tobacco products, including but not limited to smokeless tobacco products or e-cigarettes, to anyone younger than the minimum age specified in state law to legally purchase tobacco products.

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.

Problem Gambling: The Tribe shall continue to maintain safeguards against problem gambling, as defined (Training, signage, self-exclusion program, underage play, and responsible advertising and marketing).

Health and Safety Standards: The Tribe must adopt and comply with federal and state laws forbidding harassment, including sexual harassment, discrimination and retaliation. Additionally, the Tribe must maintain a $3 million insurance policy for these purposes and adopt an ordinance that includes a dispute resolution process. The Tribe has agreed to comply with federal water quality and safe drinking water standards applicable in California. The Tribe has also agreed to adopt and comply with health standards for food and beverage handling that is no less stringent than State public health standards.

Emergency Services Accessibility: The Tribe must make reasonable provisions for adequate emergency fire, medical, and related relief and disaster services for patrons and employees.

Building Codes and Fire Safety: Gaming facility construction, expansion, improvement, modification or renovation must comply with the federal Americans with Disabilities Act. Requires facilities to meet or exceed the California Building Code and the Public Safety Code applicable to Riverside County. The Tribe must submit to fire safety inspections by the state, and to rectify deficiencies, lest be subject to court order prohibiting occupancy of the portion of the gaming facility with the deficiencies.

Authorization to Accept Wagers on Horse Racing: Authorizes (Appendix D) the Tribe to establish and operate no more than two horse racing satellite wagering facilities upon the Tribe's Reservation. Specifically, the Tribe must submit to the California Horse Racing Board (CHRB) an application to operate such a facility and each facility must be operated in conformity with IGRA, the Appendix, and this Compact. If provisions of the Compact are in conflict with California Horse Racing Law or the CHRB’s Rules and Regulations specific to the conduct of satellite wagering, California Horse Racing Law and the CHRB's Rules and Regulations shall control, as defined.

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, 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.

Effective Date: Once executed, ratified, and approved by U.S. Department of Interior (and listed in the Federal Register), this Compact shall be in full force and effect until December 31, 2041.

Additional Background Information:

Terms of the Tribe's 2006 Amended Compact: The Tribe's 2006 amended increased the number of gaming devices the tribe could operate from 2,000 to 5,000. Each of the two existing casinos could operate no more than 2,000 gaming devices (up from 1,000 at each existing casino), and a third gaming facility would be restricted from operating more than 1,000 gaming devices. The 2006 amended compact required an annual flat payment of $23.4 million to the State's general fund for the duration of the compact, plus an annual payment of 15% of the Net Win generated from the operation of all additional gaming devices over the existing 2,000 devices. The Tribe's 2006 amended compact also required annual $2 million payments into the RSTF. In addition, the 2006 amended compact required the Tribe to maintain its existing licenses, which included a fee-per-machine totaling approximately $550,000 per year. The compact is valid through 2030.

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 came to a standstill. 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 gaming devices.

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 changed the dynamics of tribal-state compact negotiations in California. While the compacts requiring these payments stood, any new compacts or amendments of existing compacts may no longer require General Fund contributions.

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.

According to CGCC, which administers the RSTF, a revenue shortfall of approximately $15.5 million is anticipated this fiscal year. According to the Department of Finance (DOF), the SDF has sufficient funds in it for fiscal year 2016-2017 to cover the RSTF shortfall. However, DOF indicates that it projects a $1.6 million SDF balance deficiency in fiscal year 2017-2018 assuming a $25 million transfer to the RSTF. To cover the anticipated shortfall in 2017-2018, approximately $1.6 million will need to be transferred from the General Fund in order to ensure full RSTF payments are made to non-gaming and limited-gaming tribes. A similar amount was redirected in 2015-2016. Recent compacts, including this one, have attempted to alleviate the shortfall situation by requiring payments by Tribes directly to the RSTF. This model appears to be a template for future compacts, as well.

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 629 (Gonzalez 2016) of the current legislative session. Would ratify the tribal-state gaming compact entered into between the State and the Pala Band of Mission Indians, executed on May 6, 2016.

AB 466 (Brown) of the current legislative session. Would ratify the tribal-state gaming compact between the State of California and the San Manuel Band of Mission Indians, executed on August 16, 2016.

SB 187 (Hall) of the current legislative session. Would ratify the tribal-state gaming compact entered into between the State and the Jamul Indian Village, executed August 4, 2016.

AB 2358 (Waldron) of the current legislative session. Would ratify the tribal-state gaming compact entered into between the State and the Pechanga Band of Luiseno Indians, executed August 4, 2016.

AB 1977 (Wood) of the current legislative session. Would ratify the first amendment to the 2006 tribal-state gaming compact entered into between the State and the Yurok Tribe, executed August 4, 2016.

SB 1313 (Hall) of the current legislative session. Would ratify the tribal-state gaming compact entered into between the State and the Yocha Dehe Wintun Nation, executed on August 4, 2016.

AB 1282 (Gray) of the current legislative session. Would ratify the tribal-state gaming compact entered into between the State and the Buena Vista Rancheria of Me-Wuk Indians, executed on June 28, 2016.

AB 1767 (Bigelow) of the current legislative session. Would ratify the first amendment to the 2015 tribal-state gaming compact entered into between the State and the Jackson Rancheria Band of Miwuk Indians, executed on June 22, 2016.

SB 404 (De León) of the current legislative session. Would ratify the tribal-state gaming compact entered into between the State and the Viejas Band of Kumeyaay Indians, executed on June 22, 2016.

AB 291 (Atkins) of the current legislative session. Would ratify the tribal-state gaming compact entered into between the State and the Barona Band of Mission Indians, executed on June 22, 2016.

Prior legislation: AB 795 (Atkins), Chapter 520, Statutes of 2015. Ratified the tribal state gaming compact entered into between the State and the Sycuan Band of Kumeyaay Nation, executed on September 2, 2015.

AB 1540 (Gray), Chapter 531, Statutes of 2015. Ratified the tribal-state gaming compact entered into between the State and the Santa Ynez Band of Chumash Indians, executed on August 26, 2015.

AB 315 (Bigelow), Chapter 512, Statutes of 2015. Ratified the amended and restated tribal-state gaming compact entered into between the State and the United Auburn Indian Community, executed on August 14, 2015.

AB 475 (Bigelow), Chapter 8, Statutes of 2015. Ratified the tribal-state gaming compact entered into between the State and 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 Perez), 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.

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.

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 2010. 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.

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: 0004859

 THIRD READING  

Bill No: AB 2915

Author: Eduardo Garcia (D), et al.

: 8/16/16 in Senate

Vote: 7 - Urgency

PRIOR VOTES NOT RELEVANT

NOTE: On August 9, 2016, the Senate Committee on Governmental Organization held an informational hearing on the tribal gaming compact entered into between the State of California and the Agua Caliente Band of Cahuilla Indians.

SUBJECT: : compact ratification

SOURCE: Author

DIGEST: This bill ratifies the tribal-state gaming compact (Compact) entered into between the State of California and the Agua Caliente Band of Cahuilla Indians (hereafter “Tribe”) executed on August 4, 2016. 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.

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 Agua Caliente Band of Cahuilla Indians executed on August 4, 2016 and supersedes the Tribe’s 2006 amended compact. Under this Compact, the Tribe may operate a maximum of 5,000 gaming devices (slot machines) on eligible Indian lands held in trust for the Tribe, and located within the boundaries of the Tribe’s Reservation in Riverside County, as legally described in the Compact (Appendix A).

The Tribe’s 2006 amended compact authorized Agua Caliente to operate up to 2,000 gaming devices at its Palm Springs casino, 2,000 gaming devices at its Rancho Mirage casino, and 1,000 gaming devices at any new third gaming facility in Riverside County for a total of 5,000 devices. The Tribe’s 2006 amended compact required an annual flat payment of $23.4 million to the State’s general fund for the duration of the compact, plus an annual payment of 15% of the net win generated from the operation of all additional gaming devices over the existing 2,000 devices. The Tribe’s 2006 amended compact also required annual $2 million payments into the Revenue Sharing Trust Fund (RSTF). In addition, the 2006 amended compact required the Tribe to maintain its existing licenses, which included a fee-per-machine totaling approximately $550,000 per year.

With respect to this Compact, the Tribe has agreed to pay the State its pro rata share of costs the State incurs for the performance of its duties under the Compact. The Tribe has also agreed to make payments into the RSTF and the Tribal Nation Grant Fund (TNGF) that are based on a percentage of net win generated from gaming devices – the percentage increases as the number of slots increases. Specifically, the tribe will pay 6% of net win on devices up to 2,500; 7% on devices between 2,501 and 3,000; 8% on devices between 3,001 and 3,500; 9% on devices between 3,501 and 4,000; 10% on devices between 4,001 and 4,500; and, up to 11% on devices between 4,501 and 5,000.

This Compact also provides that from its payments to the RSTF and the TNGF, the Tribe may take credits of up to 60% for infrastructure improvements that in part benefit county or local jurisdiction residents, as well as those of the Tribe, fire, law enforcement, public transit, education, tourism and other services including investments in renewable energy projects and payments to support capital improvements and operating expenses for facilities within California that provide health care services to tribal members, Indians, and non-Indians.

Furthermore, this Compact: (1) provides a regulatory framework that respects the role of the tribal gaming agency as the primary regulator while also ensuring that state gaming regulators fulfill their responsibilities; (2) requires the Tribe to conduct its gaming activities pursuant to an internal control system that implements minimum internal controls that are no less stringent than those in federal regulations; (3) requires the Tribe to adopt a Tribal Labor Relations Ordinance, as specified; and, (4) includes patron dispute, tort claims and employment discrimination provisions.

BRIEF HISTORY OF THE AGUA CALIENTE BAND OF CAHUILLA INDIANS

According to information provided by the Tribe, the Agua Caliente Band of Cahuilla Indians is a federally recognized Indian tribe located in the Coachella Valley within Riverside County. The tribal headquarters are located in Palm Springs, which derives its name from the ancient hot mineral springs located in downtown Palm Springs on the Tribe’s reservation. The Tribe’s reservation covers approximately 32,000 acres of the Coachella Valley in a “checker-board” pattern, and was created by Presidential Executive Orders in the late 1870’s and spans large portions of the cities of Palm Springs, Rancho Mirage, and Cathedral City. The Tribe is governed by a five-member Tribal Council pursuant to the Tribe’s Constitution and Bylaws, which was adopted and approved by the Tribe and the federal government in June of 1955. The Tribe has approximately 500 members. The tribal government provides a wide array of services and benefits to tribal members related to healthcare, education, cultural preservation, and general welfare. The capacity of the Tribe to provide for its members and strengthen the tribal government has greatly increased since the establishment of tribal gaming. The Tribe previously entered into a tribal-state gaming compact with the State in 1999 – that compact was amended in 2006.

With approximately 2,500 team members working within gaming and non-gaming tribal economic development ventures, the Tribe is one of the largest employers in the Coachella Valley. The Tribe currently operates two casinos, two golf courses, multiple restaurants, an entertainment venue, and also manages its real estate holdings, which include numerous leases of reservation lands for commercial and residential development and other purposes. The Tribe also operates the Indian Canyons and Tahquitz Canyon located on the Tribe’s reservation. These recreational areas located on Cahuilla ancestral lands are open to the public and offer over 60 miles of hiking trails and other activities so that all may enjoy the beauty of natural springs, native palm groves, wildlife, and multiple waterfalls. Tribal government departments, including but not limited to Economic Development, Planning and Natural Resources, Tribal Historic Preservation, and Emergency Services, closely partner with other local governments and communities on infrastructure issues, as well as other projects and initiatives to address shared concerns.

The Tribe is a major contributor to local public and nonprofit organizations and government agencies located within and outside of the reservation in the cities of Palm Springs, Rancho Mirage, Cathedral City, and in areas throughout the Coachella Valley and beyond. The Tribe recently established the Richard M. Milanovich Fellowship to provide funding for Native American students who are members of any federally recognized Indian tribe so that they may study, live and work in Washington D.C. through the George Washington University's Native American Political Leadership Program.

KEY COMPONENTS OF THE COMPACT

Scope of Class III Gaming Authorized. The Tribe is authorized to operate up to a total of 5,000 gaming devices (slot machines); banking or percentage card games; 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; and, off-track wagering on horse races at a satellite wagering facility pursuant to certain requirements identified in Appendix D. 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 six gaming facilities [only two of which may have more than 500 gaming devices] 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 and trust lands as those boundaries exist as of the execution date of this Compact, as legally described in the Compact (Appendix A).

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 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 Special Distribution Fund (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 may not be increased more than 5% per year and 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 State fiscal year, multiplied by the Appropriation, equals the Tribe’s pro rata share.”

Payments to the RSTF and the TNGF. The Tribe shall make payments, which shall be used exclusively for the RSTF and the TNGF, based on the following schedule:

“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 annual credits for up to 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, local jurisdictions, or non-profit and civic organizations operating facilities or providing services within the County for fire, law enforcement, public transit, education, tourism, and other services and infrastructure improvements intended to serve off-reservation needs of County or local jurisdiction residents as well as those of the Tribe;
2. Non-gaming related capital investments and economic development or other projects by the Tribe that provide mutual benefits to the Tribe and the State, the County or local jurisdictions because, for instance, they have particular cultural, social or environmental value, or diversify the sources of revenue for the Tribe’s general fund;
3. Payments to support operating expenses and capital improvements for non-tribal governmental agencies or facilities operating within the County or local jurisdictions;
4. Investments in, and any funds paid to the State, including excise taxes, 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;
5. Payments to support capital improvements and operating expenses for facilities within California that provide health care services to tribal members, Indians, and non-Indians;
6. Costs incurred by the Tribe to fund the construction and operation of a museum or to preserve cultural resources within the County;
7. Payments to Indians who are not members of the Tribe for educational, healthcare, general welfare, or vocational purposes, or to other federally-recognized tribes for governmental or general welfare purposes; and,
8. Payments by the Tribe to reimburse the County for any loss of property tax revenues, sales tax revenue that would otherwise be due for retail sales at the Tribe’s gaming facility or transient occupancy tax at the Tribe’s hotel, if it was not located on Indian lands.

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.

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 average number of gaming devices operated each day and (2) the total amount due the SDF and the RSTF/TNGF.

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 conduct its gaming activities pursuant to an internal control system that implements MICS that are no less stringent than those contained in the MICS of the federal NIGC standards, as specified. It requires gaming to operate pursuant to a written internal control system that reasonably assures that assets are safeguarded and accountability over assets is maintained; liabilities are properly recorded and contingent liabilities are properly disclosed; financial records are accurate and reliable; transactions are performed in accordance with the Tribal Gaming Agency’s authorization; access to assets is permitted only in accordance with the Tribal Gaming Agency’s approved procedures; recorded accountability for assets is compared with actual assets; and, functions, duties and responsibilities are appropriately segregated and performed by qualified personnel. The Tribe is required to provide the CGCC, upon written request, a copy of the independent certified public accountant agreed-upon procedures report conducted annually for submission to the NIGC pursuant to federal law. This report verifies that the gaming operation is in compliance with the NIGC’s MICS.
• Patron Disputes. Requires the Tribe (through its Tribal Gaming Agency) to 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 within 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, once a tribal court system is established, or through binding arbitration. 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 Tribe’s tribal court may, at the party’s election, 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 connection with the jurisdiction of the tribal court system and JAMS arbitrator’s jurisdiction and in any action to enforce their judgments or the obligations provided in this section.
• 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. Also, requires the Tribe to adopt a Tort Liability Ordinance containing provisions that are the same as California tort law to govern all claims of bodily injury, personal injury, or property damage arising out of, connected with, or relating to the casino. The Tribe must consent to jurisdiction in the Tribe’s tribal court system, once a tribal court system is established, or by binding arbitration before a JAMS operator, in accordance with JAMS Comprehensive Arbitration. Any party dissatisfied with the award of the arbitrator may invoke the JAMS Optional Arbitration Appeal Procedure. The cost and expenses of arbitration shall be initially borne equally by the parties but the JAMS arbitrator shall award to the prevailing party its costs and expenses (but no attorney fees). The Tribe consents to the jurisdiction of the tribal court and the arbitrator’s jurisdiction, the JAMS Optional Appeal Procedure and any action to enforce their judgments or the obligations in this section.
• Environmental Protections. Requires the Tribe to prepare a Tribal Environmental Impact Report (TEIR) and negotiate mitigation of any off-reservation impacts, including an evaluation of energy consumption, prior to initiating the development of a Project for a facility. The Compact provides procedures regarding the (1) Notice of Preparation of Draft TEIR, (2) Notice of Completion of Draft TEIR, and (3) Issuance of Final TEIR. The Tribe’s failure to prepare an adequate TEIR when required may warrant an injunction where appropriate. Before commencement of a Project, and no later than the issuance of the final TEIR, the Tribe shall negotiate an intergovernmental agreement with the California Department of Transportation (Caltrans) if state roads are impacted. A completed TEIR must be filed with the County, the Department of Justice, the CGCC, and the State Clearinghouse. Also, before commencement of a Project, and no later than the issuance of the final TEIR, the Tribe shall offer to commence negotiations with the County to, amongst other things, provide for the timely mitigation of any significant effect on the off-reservation environment including 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 as a consequence of the Project.
• 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. Provides that slot machines will have 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. The State Gaming Agency would 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.
• Compliance Enforcement. Provides that it is the responsibility of the Tribal Gaming Agency to conduct on-site gaming regulation and control in order to enforce the terms of this Compact, IGRA, any applicable NIGC and State Gaming Agency regulations, and the tribal gaming ordinance with respect to gaming operation and facility compliance, and to protect the integrity of the gaming activities, the reputation of the Tribe and the gaming operation for honesty and fairness, and the confidence of patrons that tribal government gaming in California meets the highest standards of regulation and internal controls. To meet those responsibilities, the tribal gaming agency shall adopt and enforce regulations, procedures, and practices.
• Labor Provisions. Rather than requiring side agreements between the Tribe and labor organizations, this Compact incorporates provisions of a Tribal Labor Relations Ordinance (TLRO) first incorporated into the compact with the Santa Ynez Band of Chumash Indians in 2015 and reflects significant changes from the Tribe’s 1999 TRLO. The Compact provides that the gaming activities authorized by this Compact may only commence after the Tribe has adopted an ordinance identical to the 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.
• 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. In lieu of participation in the State’s system, the Tribe may create and maintain a system through self-insurance, which includes specified provisions, including hearings before an independent tribunal. 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.
• Prohibitions Regarding Minors. Provides that 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.
• Alcohol Provision. Makes it explicit that the purchase, sale, and service of alcoholic beverages shall be subject to state law – the Alcoholic Beverage Control (ABC) Act.
• Tobacco Provisions. Provides that the Tribe agrees to provide a non-smoking area in the gaming facility and to maintain ventilation, filtration, purification or other technologies throughout the gaming facility, where reasonably feasible after consideration of engineering, economic and scientific factors, and further agrees not to offer or sell tobacco products, including but not limited to smokeless tobacco products or e-cigarettes, to anyone younger than the minimum age specified in state law to legally purchase tobacco products.
• Problem Gambling. Requires the Tribe to continue to maintain safeguards against problem gambling by implementing specified safeguards.
• Health and Safety Standards. Provides that the Tribe has agreed to adopt and comply with health standards for food and beverage handling that is no less stringent than State public health standards. Also, the Tribe has agreed to comply with federal water quality and safe drinking water standards applicable in California. The Tribe must also adopt and comply with federal and state laws forbidding harassment, including sexual harassment, discrimination and retaliation. Furthermore, the Tribe must maintain a $3 million insurance policy for these purposes and adopt an ordinance that includes a dispute resolution process.
• Building Codes and Fire Safety. Provides that 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. Gaming facility construction, expansion, improvement, modification or renovation must also comply with the federal Americans with Disabilities Act.
• Emergency Services Accessibility and Possession of Firearms. Requires the Tribe to 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.
• Horse Racing Satellite Wagering Facility. As noted above, under the heading “Scope of Class III Gaming Authorized,” the compact contains an appendix (Appendix D) which authorizes the Tribe to establish and operate no more than two horse racing satellite wagering facilities upon the Tribe’s Reservation. Specifically, the Tribe must submit to the California Horse Racing Board (CHRB) an application to operate such a facility and each facility must be operated in conformity with IGRA, the Appendix, and this Compact. If provisions of the Compact are in conflict with California Horse Racing Law or the CHRB’s Rules and Regulations specific to the conduct of satellite wagering, California Horse Racing Law and the CHRB’s Rules and Regulations shall control. The amounts deducted from pari-mutuel wagers at each facility, and the distribution of such amounts, shall be the same as those provided for under the California Horse Racing Law and the CHRB’s Rules and Regulations for satellite wagering facilities, other than fairs, in the southern zone.
• Effective Date. Provides that this Compact shall not be effective unless and until all of the following have occurred: (1) The Compact is ratified by statute in accordance with state law and (2) Notice of approval or constructive approval is published in the Federal Register. Once effective, this Compact shall be in full force and effect 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, 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 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 of Appeals rejecting a Class III Tribal-State Gaming Compact negotiated by then 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.

Any payments to the State, above those needed to mitigate impacts of gaming must be in exchange for a benefit deemed "exclusive" to the tribe.

The Rincon Band 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 refused to sign the amended compact which had already 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 of Appeals 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.”

Special Distribution Fund (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 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 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. (Pursuant to compact renegotiations that took place with several of the larger gaming tribes during the Schwarzenegger administration, revenue from those tribes is directed into the state General Fund, instead of the SDF.)

The law establishes a method of calculating the distribution of appropriations from the SDF for grants to local government agencies impacted by tribal gaming. This method includes a requirement that the State Controller, in consultation with the CGCC, deposit funds into County Tribal Casino Accounts and Individual Tribal Casino Accounts based upon a process that takes into consideration whether the county has tribes that pay, or do not pay, into the SDF. The distribution formula "sunsets" on January 1, 2021.

Existing law also establishes an Indian Gaming Local Community Benefit Committee in each county in which gaming is conducted, specifies the composition and responsibilities of that committee, and requires that committee to make the selection of grants from the casino accounts. Among other things, the committee is responsible for establishing all application policies and procedures for grants from the casino accounts. Additionally, existing law requires the State Auditor to conduct an audit every three years and report its findings to the Legislature regarding the allocation and use of SDF grant monies.

Revenue Sharing Trust Fund (RSTF)

Existing law 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 California tribes (e.g., federally-recognized non-gaming tribes 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, created gaming compacts with approximately 60 California tribes. Non-compact tribes are considered third-party beneficiaries of the 1999 compacts.

Tribal Nation Grant Fund (TNGF)

This particular fund (referenced in recent compacts) was created to complement the RSTF and provides for the distribution of funds to non-gaming tribes, upon application of such tribes for purposes related to effective self-governance, self-determined community, and economic development. Payments from this fund are intended to be made to non-gaming tribes on a “need” basis, upon application.

Prior Legislation

AB 795 (Atkins, Chapter 520, Statutes of 2015) ratified the tribal-state gaming compact entered into between the State of California and the Sycuan Band of Kumeyaay Nation, executed on September 2, 2015.

AB 1540 (Gray, Chapter 531, Statutes of 2015) ratified the tribal-state gaming compact entered into between the State of California and the Santa Ynez Band of Chumash Indians, executed on August 26, 2015.

AB 315 (Bigelow, Chapter 512, Statutes of 2015) ratified 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.

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.

SB 1356 (De León, Chapter 314, Statutes of 2014) ratified the amendment to the tribal-state gaming compact entered into between the State of California 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 of California and the Karuk Tribe, executed on December 4, 2013.

FISCAL EFFECT: Appropriation: Fiscal Com.: Yes Local:

SUPPORT: (Verified 8/16/16)

Agua Caliente Band of Cahuilla Indians

Barona Band of Mission Indians

California Labor Federation

California Tribal Business Alliance

City of Cathedral City

City of Palm Springs

City of Rancho Mirage

Pechanga Band of Luiseno Indians

Teamsters

UNITE HERE, AFL-CIO

Viejas Band of Kumeyaay Indians

OPPOSITION: (Verified 8/16/16)

None received

Prepared by:

8/18/16 15:42:35

**** END ****

 THIRD READING 

Bill No: AB 2915

Author: Committee on Governmental Organization

Introduced: 3/17/16

Vote: 21

SENATE GOVERNMENTAL ORG. COMMITTEE: 13-0, 6/28/16

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

ASSEMBLY FLOOR: 78-0, 5/12/16 (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.

ANALYSIS:

Existing law:

1. Provides, under the federal Indian Gaming Regulatory Act of 1988, 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 2915. 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 Legislation

AB 1540 (Gray, Chapter 531, Statutes of 2015), as introduced, 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. (Gutted on the Senate Floor to be the ratification vehicle for the Santa Ynez Band of Mission Indians Compact, executed on 8/26/15)

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, 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 the Senate Governmental Organization 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)

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 on the Senate Floor to be the ratification vehicle for the amended Shingle Springs Band of Miwok Indians Compact, executed on 6/30/2008)

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

SUPPORT: (Verified 6/28/16)

None received

OPPOSITION: (Verified 6/28/16)

None received

ASSEMBLY FLOOR: 78-0, 5/12/16

AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, 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, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Quirk, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Rendon

NO VOTE RECORDED: Burke, Jones-Sawyer

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

8/4/16 12:36:49

**** END ****

 CONSENT  

Bill No: AB 2915

Author:

:

Vote:

SENATE GOVERNMENTAL ORG. COMMITTEE: 13-0, 6/28/16

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

ASSEMBLY FLOOR: 78-0, 5/12/16 (Consent) - See last page for vote

SUBJECT:

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.

ANALYSIS:

Existing law:

1. Provides, under the federal Indian Gaming Regulatory Act of 1988, 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 2915. 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 Legislation

AB 1540 (Gray, Chapter 531, Statutes of 2015), as introduced, 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. (Gutted on the Senate Floor to be the ratification vehicle for the Santa Ynez Band of Mission Indians Compact, executed on 8/26/15)

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, 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 the Senate Governmental Organization 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)

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 on the Senate Floor to be the ratification vehicle for the amended Shingle Springs Band of Miwok Indians Compact, executed on 6/30/2008)

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

SUPPORT:

(Verified 6/28/16)

None received

OPPOSITION: (Verified 6/28/16)

None received

ASSEMBLY FLOOR: 78-0, 5/12/16

AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, 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, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Quirk, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Rendon

NO VOTE RECORDED: Burke, Jones-Sawyer

Prepared by:

6/29/16 15:56:28

**** END ****

SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION

Senator Isadore Hall, III

Chair

2015 - 2016 Regular

Bill No: 2915 Hearing Date: 6/28/2016

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 2915. 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 1540 (Gray, Chapter 531, Statutes of 2015) as introduced, 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. (Gutted on the Senate Floor to be the ratification vehicle for the Santa Ynez Band of Mission Indians Compact, executed on 8/26/15)

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 on the Senate Floor to be the ratification vehicle for the amended Shingle Springs Band of Miwok Indians Compact, executed on 6/30/2008)

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: Fiscal Com.: Local:

SUPPORT:

None received

OPPOSITION:

None received

Date of Hearing: May 5, 2016

ASSEMBLY COMMITTEE ON GOVERNMENTAL ORGANIZATION

Adam Gray, Chair

ABPCA Bill Id:AB 2915 (

Author:Committee on Governmental Organization) – As Introduced Ver:March 17, 2016

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: This bill represents the annual Assembly Governmental Organization Committee bill that makes technical, clarifying, conforming, and non-controversial changes to the Government Code, relating to gaming.

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 2915 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