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 Pala Band of Mission Indians, executed on May 6, 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 Pala Band of Mission Indians, executed on May 6, 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 law authorizes the Secretary of Food and Agriculture to formulate stabilization and marketing plans that establish the prices to be paid by milk handlers for specified classes of market milk. Existing law provides that a stabilization and marketing plan may provide for, among other things, maximum charges for plant processing and transportation services, and minimum charges for the various services performed by a nonprofit cooperative association regarding class 1 market milk. Existing law authorizes the secretary to establish separate prices for various components of market milk other than class 1 market milk.

This bill would require the secretary to ensure that producers and handlers receive notice of the monthly prices for the various components of market milk, as specified. The bill would also make nonsubstantive changes to the provisions regarding maximum and minimum charges for services, as specified above.

Existing law authorizes the Secretary of Food and Agriculture to formulate stabilization and marketing plans that establish the prices to be paid by milk handlers for specified classes of market milk. Existing law provides that a stabilization and marketing plan may provide for, among other things, maximum charges for plant processing and transportation services, and minimum charges for the various services performed by a nonprofit cooperative association regarding class 1 market milk. Existing law authorizes the secretary to amend or terminate any stabilization and marketing plan after notice and public hearing in accordance with specified requirements. establish separate prices for various components of market milk other than class 1 market milk.

This bill would require the secretary to terminate all stabilization and marketing plans without further action by the producers of market milk if the producers approve and adopt a federal milk marketing order by January 1, 2017. ensure that producers and handlers receive notice of the monthly prices for the various components of market milk, as specified. The bill would also make nonsubstantive changes to the provisions regarding maximum and minimum charges, including updating a cross-reference. charges for services, as specified above.

Existing law authorizes the Secretary of Food and Agriculture to formulate stabilization and marketing plans that establish the prices to be paid by milk handlers for specified classes of market milk. Existing law provides that a stabilization and marketing plan may provide for, among other things, maximum charges for plant processing and transportation services, and minimum charges for the various services performed by a nonprofit cooperative association regarding class 1 market milk. Existing law authorizes the secretary to amend or terminate any stabilization and marketing plan after notice and public hearing in accordance with specified requirements.

This bill would require the secretary to terminate all stabilization and marketing plans without further action by the producers of market milk if the producers approve and adopt a federal milk marketing order by January 1, 2017. The bill would also make nonsubstantive changes to the provisions regarding maximum and minimum charges, including updating a cross-reference.

Existing law authorizes the Secretary of Food and Agriculture to formulate stabilization and marketing plans that establish the prices to be paid by milk handlers for specified classes of market milk. Existing law provides that a stabilization and marketing plan may provide for, among other things, maximum charges for plant processing and transportation services, and minimum charges for the various services performed by a nonprofit cooperative association regarding class 1 market milk.

This bill would make nonsubstantive changes to the provisions regarding maximum and minimum charges, including updating a cross-reference.

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 629

Author:(Gonzalez)

As Amended Ver:June 16, 2016

2/3 vote. Urgency

(vote not relevant)

Original Committee Reference: AGRI.

SUMMARY: Ratifies the tribal-state gaming compact (Compact) entered into between the State of California and the Pala Band of Mission Indians (hereafter "Tribe") executed on May 9, 2016.

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 Pala Band of Mission Indians executed on May 9, 2016.
2. Supersede the existing 2004 compact between the Tribe and the State of California.
3. Under this Compact, the Tribe may operate a maximum of 2,500 gaming devices (slot machines) at its current facility in San Diego County. Currently, the Tribe operates 2,000 gaming devices.
4. The Tribe has agreed to pay the State its pro rata share of the costs the State incurs for the performance of its duties under the Compact as well as 6% of its "net win," to be shared with tribes that are not gaming or that otherwise are not substantially benefiting from gaming.
5. Provide a framework for the sharing of gaming revenue with the County of San Diego and other local jurisdictions. Specifically, from its payments to the Revenue Sharing Trust Fund (RSTF) or the Tribal Nation Grant Fund (TNGF), the Tribe may take annual credits of up to 60% for infrastructure improvements and fire, law enforcement, public transit, education, tourism and other services including investments in renewable energy, water conservation or recycling projects and payments to support capital improvements or operating expenses for facilities that provide health care services to tribal members and other members of the local community.
6. Provide that, in deference to tribal sovereignty, certain actions are not deemed projects for purposes of the California Environmental Quality Act (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.
7. State once effective (legislative ratification and federal approval required), this Compact shall be in full force and effect for State law purposes for 25 years (2041).
8. Contain an urgency clause, allowing this bill to take effect immediately upon enactment.

AS PASSED BY THE ASSEMBLY, this bill would have required the Secretary of the Department of Food and Agriculture (DFA) to inform milk producers and handlers, on a monthly basis, the minimum prices for the various components of market milk, and permits the Secretary to do so via written notice or publication online.

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. This bill is keyed non-fiscal by the Legislative Counsel.

COMMENTS: On August 3, 2016, the Assembly Governmental Organization Committee will hold an informational hearing on the tribal gaming compact entered into between the State of California and the Pala Band of Mission Indians.

Brief Overview of the Tribe: The Pala Band of Mission Indians is located in northern San Diego County, on a 12,273-acre reservation, home to a majority of the 918 enrolled members. The federally-recognized Tribe is governed by a six-member Executive Committee pursuant to a constitution adopted in November 1994. Committee members are elected by the General Council, which includes all qualified voters 18 years and older. Elections are held every two years in November.

In 1999, the Tribe entered into a tribal-state gaming compact with the State of California which has provided it with extensive economic opportunities, including a profitable casino. That compact was amended in 2004. The existing casino operation, a major economic force in northern San Diego County, is known as the Pala Casino Resort and Spa, offers 2,000 state-of-the-art slot machines, 85 table games, eight restaurants, two lounges with live entertainment daily, and a 2,000 seat Events Center.

The resort hotel has 507 rooms and the resort complex also operates a recreational vehicle (RV) park with 100 sites and picnic grounds. All told, the resort employs approximately 2,000 individuals. The Tribe has had agreements with UNITE-HERE concerning its casino employees, including several collective bargaining agreements, for over 15 years.

Additionally, the Tribe owns and operates a 90-acre avocado grove, managed by tribal members, on the south end of the Pala reservation. The avocado operation has been producing nearly one million pounds of avocados since 1989, and employs a crew of over 40 seasonal workers who help harvest the avocados three times each year – the fruit is sent to nearby packing houses for processing and sale.

The Tribe established a fire department in 1978 (two firefighters and a 300-gallon water tank) which has evolved into a full-time, 30 personnel volunteer department, operating 24/7, in a $9 million facility. The Pala Fire Department maintains State Fire Marshal certification status and has established mutual aid agreements with the surrounding fire departments, including the Department of Forestry. The Tribe has also worked in collaboration with San Diego County on a number of public safety issues and infrastructure development programs during the term of its existing compact. Additionally, the Tribe has invested significantly in projects benefiting youth in the area including contributions to a plethora of local public and nonprofit organizations (e.g., cultural arts, educational programs, civic organizations, local schools, pediatric centers, disaster relief centers, etc.). Furthermore, the Tribe provides programs for tribal members, especially youth, to ensure healthy and productive lives. These include scholarships for all education levels, tutoring, a youth center, daycare, preschool, full service library, recreation center, organized sporting events, and environmental activities for all ages. The Tribe also provides medical, dental, vision insurance, death benefits, and senior meal delivery and senior transportation services.

Key Components of the Compact: The terms of the compact are consistent with provisions of more recent compacts related to licensing, compliance enforcement and mitigation of off-reservation gaming impacts and reflects, among other things, the evolving nature of financial markets, as well as the professionalism of the Tribe's regulators and their constructive relationship with state gaming regulators.

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

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

Exclusivity. If gaming devices are operated anywhere in this state other than in tribe maintained facilities under compact, and an entity thereafter legally offers gaming devices -- the tribe may terminate the compact (and thus any rights to conduct Class III gaming), or continue under this compact with an entitlement to a reduction of the rates following the conclusion of negotiations with the State.

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 shall be calculated using the following equation: "The maximum number of gaming devices operated in the gaming facility for the previous fiscal year as determined by the State Gaming Agency, divided by the maximum number of gaming devices operated by all federally recognized tribes in California pursuant to tribal-state Class-III gaming compacts during the previous fiscal year, multiplied by costs, equals the Tribe's pro rata share."

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

Credits Applied to RSTF or the TNGF. 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 or the value of services provided to San Diego County, local jurisdictions, and nonprofit and civic organizations operating facilities or providing services within the County for fire, law enforcement, emergency medical services, public transit, education, tourism, recreation, and other services and infrastructure improvements intended to serve off-reservation needs of County residents – such payments shall be subject to approval by the County or local jurisdiction in the County and at least 20% of the annual credits must be utilized for the above stated purposes; 2) Non-gaming related capital investments and economic development projects by the Tribe that provide mutual benefits to the Tribe and the State because, for instance, they have particular cultural, social or environmental value, or diversify the sources of revenue for the Tribe's general fund; 3) Payments to support operating expenses and capital improvements for non-tribal governmental agencies or facilities operating within the County; 4) Investments in, and any funds paid to the State in connection with, renewable energy projects that, in part, serve the gaming facility, to include facilities that incorporate charging stations for electric or other zero emission vehicles that are available to patrons and employees of the gaming facility; 5) Payments to support capital improvements and operating expenses for facilities located on the reservation or within California that provide health care services to tribal members, Indians, and non-Indians; 6) Investments by the Tribe for water treatment or conservation projects and recycling projects; and, 7) Grants 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.

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

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.

Minimum Internal Control Standards (MICS). The Compact 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.

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.

Patron Disputes. Provides that the Tribe (through its Tribal Gaming Agency) must attempt to resolve patron disputes within seven 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, and if dissatisfied with the resolution, the patron has the right to seek resolution by binding arbitration before a single arbitrator, who shall be a retired judge, in accordance with the streamlined arbitration rules and procedures of Judicial Arbitration and Mediation Services (JAMS). The Tribal Gaming Agency must conduct an appropriate investigation, provide to the patron a copy of its procedures concerning patron complaints, and render a decision in accordance with industry practices. The decision shall be issued within 60 days of the patron's request. The Tribe agrees to waive its sovereign immunity in order to be compelled in federal or state court to abide by the resolution of arbitration. The cost and expenses of arbitration shall be initially borne by the Tribe but the arbitrator shall award to the prevailing party its costs and expenses (but no attorney fees). Any party dissatisfied with the award of the arbitrator may at the party's election invoke the JAMS Optional Arbitration Appeal Procedure; provided that the party making such election must bear all costs and expenses of JAMS and the arbitrators associated with the appeal regardless of the outcome.

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

Environmental Protections. Requires the Tribe to prepare a Tribal Environmental Impact Report (TEIR) and negotiate mitigation of any off reservation impacts, 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. A completed TEIR must be filed with San Diego County, the Department of Justice, and the State Clearinghouse. Before commencement of a Project, and no later than the issuance of the final TEIR, the Tribe shall offer to commence negotiations with San Diego 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.

Health and Safety Standards. Provides that the Tribe has agreed to adopt and comply with tribal health standards for food and beverage handling that are 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.

Labor Provisions. The Compact provides that the gaming activities authorized by this compact may only commence after the Tribe has adopted an ordinance identical to the Tribal Labor Relations Ordinance (TRLO) 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 1999 TLRO with several modifications. The TLRO provides for union neutrality. The Tribe will not oppose union but can advocate the benefits of working for the Tribe. A union must issue a Notice of Intent or Organize (NOIO). For a period of 365 days following delivery of a NOIO, the union shall not engage in strikes, picketing, boycotts, attack websites, or other economic activity at or in relation to the tribal casino or related facility. During the 365 days after the Tribe received the NOIO, the union must collect dated and signed authorization cards and complete the secret ballot election. Failure to complete the secret ballot election within 365 days shall preclude the union from delivering another NOIO for a period of 730 days.

After the certification that 30% of the employees have expressed an interest in the union, a notice of election shall be issues and the election shall be concluded within 30 calendar days thereafter. Secret ballot elections shall be held at workplace and at least one neutral location. Employee may mail ballots so long as received by election day.

Mediation for any collective bargaining agreement impasse shall be made in conjunction with the Federal Mediation and Conciliation Service (FMCS). The mediation process is modeled on the Agricultural Labor Relations Act and authorizes the mediator to resolve the impasse. Disputes are presented to an arbitrator with expertise in labor law. Appropriate challenges to the arbitrator's decision may be presented to a state superior court.

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

Slot Machine Testing. The Compact 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. Slot machines 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 Tribe shall prepare and maintain records of its compliance machine testing provisions of this compact while any gaming device is on the gaming floor and for a period of at least one year after it is removed from the gaming floor. Such records shall be made available for inspection by the CGCC upon request.

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.

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

Sale and Use of Tobacco. The Compact requires the Tribe to provide a non-smoking area in the Gaming Facility and not to offer or sell tobacco to anyone that is under 18 years of age. It requires the Tribe to utilize a ventilation system throughout the Gaming facility that exhausts tobacco smoke.

Sale of Alcohol. Makes it explicit that the purchase, sale, and service of alcoholic beverages shall be subject to state law (the Alcoholic Beverage Control Act). The Tribe shall prohibit persons under the age of 21 years from purchasing, consuming, or possessing alcoholic beverages.

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

Amendment by Agreement. The terms and conditions of this Compact may be amended at any time by the mutual and written agreement of both parties during the term of this Compact, 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 and ratified, this Compact shall be in full force and effect 25 years following the effective date (2041 if ratified in this Legislative session). If the parties have not agreed to extend the term of this Compact or have not entered into a new compact by the termination date, this Compact shall automatically be extended for two calendar years.

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.

AB 1245 (V. Manuel Perez), Chapter 462, Statutes of 2013. Ratified the tribal-state gaming compact entered into between the State of California 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 of California 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 of California 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 of California and the Fort Independence Indian Community of Paiute Indians, executed on February 28, 2013.

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

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

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

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

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

AB 122 (Coto), Chapter 3, Statutes of 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. Also, provided for the issuance of bonds in an amount not to exceed $1.5 billion by the California Infrastructure and Economic Development Bank and required the net proceeds of the sale of the compact assets to be deposited in the Traffic Congestion Relief Fund and the Transportation Deferred Investment Fund.

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

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

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

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

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

Analysis Prepared by: Eric Johnson / G.O. / (916) 319-2531 FN: 0003640

 THIRD READING  

Bill No: AB 629

Author:

:

Vote:

PRIOR VOTES NOT RELEVANT

NOTE: On June 28, 2016, the Senate Governmental Organization Committee held an informational hearing on the tribal gaming compact entered into between the State of California and the Pala Band of Mission Indians.

SUBJECT:

SOURCE: Pala Band of Mission Indians

DIGEST: This bill ratifies the tribal-state gaming compact (Compact) entered into between the State of California and the Pala Band of Mission Indians (hereafter “Tribe”) executed on May 6, 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 Pala Band of Mission Indians executed on May 6, 2016 and supersedes the 2004 amended compact between the Tribe and the State of California. Currently, the Tribe operates 2,000 gaming devices (slot machines). Under this Compact, the Tribe may operate a maximum of 2,500 gaming devices at its current facility in San Diego County.

The Tribe has agreed to pay the State its pro rata share of the costs the State incurs for the performance of its duties under the Compact as well as six percent (6%) of its “net win,” to be shared with tribes that are not gaming or that otherwise are not substantially benefiting from gaming. Additionally, the Compact provides a framework for the sharing of gaming revenue with the County of San Diego and other local jurisdictions. Specifically, from its payments to the Revenue Sharing Trust Fund (RSTF) or the Tribal Nation Grant Fund (TNGF), the Tribe may take annual credits of up to sixty percent (60%) for infrastructure improvements and fire, law enforcement, public transit, education, tourism and other services including investments in renewable energy, water conservation or recycling projects and payments to support capital improvements or operating expenses for facilities that provide health care services to tribal members and other members of the local community.

Brief History of the Pala Band of Mission Indians

The Pala Band of Mission Indians is located in northern San Diego County, on a 12,273-acre reservation, home to a majority of the 918 enrolled members. The Tribe is governed by a six-member Executive Committee pursuant to a constitution adopted in November 1994. Committee members are elected by the General Council, which includes all qualified voters 18 years and older. Elections are held every two years in November. In 1999, the Tribe entered into a tribal-state gaming compact with the State of California which has provided it with extensive economic opportunities, including a profitable casino. That compact was amended in 2004.

The existing casino operation, a major economic force in northern San Diego County, is known as the Pala Casino Resort and Spa, offers 2,000 state-of-the-art slot machines, 85 table games, eight restaurants, two lounges with live entertainment daily, and a 2,000 seat Events Center. The resort hotel has 507 rooms and the resort complex also operates an RV park with 100 sites and picnic grounds. All told, the resort employs approximately 2,000 individuals. The Tribe has had agreements with UNITE-HERE concerning its casino employees, including several collective bargaining agreements, for over 15 years. Additionally, the Tribe owns and operates a 90-acre avocado grove, managed by tribal members, on the south end of the Pala reservation. The avocado operation has been producing nearly one million pounds of avocados since 1989, and employs a crew of over 40 seasonal workers who help harvest the avocados three times each year – the fruit is sent to nearby packing houses for processing and sale.

The Tribe established a fire department in 1978 (two firefighters and a 300-gallon water tank) which has evolved into a full-time, 30 personnel volunteer department, operating 24/7, in a $9 million facility. The Pala Fire Department maintains State Fire Marshal certification status and has established mutual aid agreements with the surrounding fire departments, including the Department of Forestry. The Tribe has also worked in collaboration with San Diego County on a number of public safety issues and infrastructure development programs during the term of its existing compact.

Additionally, the Tribe has invested significantly in projects benefitting youth in the area including contributions to a plethora of local public and nonprofit organizations (e.g., cultural arts, educational programs, civic organizations, local schools, pediatric centers, disaster relief centers, etc.).

Furthermore, the Tribe provides programs for tribal members, especially youth, to ensure healthy and productive lives. These include scholarships for all education levels, tutoring, a youth center, daycare, preschool, full service library, recreation center, organized sporting events, and environmental activities for all ages. The Tribe also provides medical, dental, vision insurance, death benefits, and senior meal delivery and senior transportation services.

Key Components of the Compact

• Scope of Class III Gaming Authorized and Financial Terms. Under this Compact, the Tribe may operate a maximum of 2,500 gaming devices, banking or percentage card games, and any devices or games that are authorized under state law to the California State Lottery, provided that the Tribe will not offer such games through use of the Internet unless others in the state not affiliated with or licensed by the California State Lottery are permitted to do so under state and federal law. The Tribe shall not engage in Class III Gaming that is not expressly authorized in the Compact.
• Authorized Gaming Facility. The Tribe may establish and operate not more than two gaming facilities and engage in Class III Gaming only on eligible Indian lands held in trust for the Tribe, located within the boundaries of the Tribe’s reservation and trust lands as those boundaries exist as of the execution date of this Compact, as legally described in the Compact (Appendix A). If the Tribe chooses to operate more than one gaming facility, then one of the two gaming facilities shall have no more than five hundred (500) gaming devices and shall have a primary purpose other than gaming authorized under IGRA.
• Exclusivity. Provides that in the event the exclusive right of Indian tribes to operate Class III gaming in California pursuant to the California Constitution is nullified by the enactment, amendment, or repeal of a state statute or constitutional provision or the conclusive and dispositive judicial construction of a statute or the state Constitution by a California appellate court after the effective date of this Compact, that gaming devices may lawfully be operated by non-Indian entities, the Tribe shall have the right to: (1) terminate this Compact, in which case the Tribe will lose the right to operate Class III gaming authorized by this Compact or (2) continue under this Compact with entitlement to a reduction of the rates specified below following conclusion of negotiations, to provide for (a) compensation to the State for the reasonable costs of regulation, as defined; (b) reasonable payments to local governments impacted by tribal government gaming; (c) grants for programs designed to address gambling addiction; and, (d) such assessments as may be permissible at such time under federal law. 
• Payments to the 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 shall be calculated using the following equation: “The maximum number of gaming devices operated in the gaming facility for the previous fiscal year as determined by the State Gaming Agency, divided by the maximum number of gaming devices operated by all federally recognized tribes in California pursuant to tribal-state Class-III gaming compacts during the previous fiscal year, multiplied by costs, equals the Tribe’s pro rata share.”
• Payments to the RSTF or TNGF. If the Tribe operates more than three hundred fifty (350) gaming devices at any time in a given calendar year, it shall thereafter, including in that calendar year, pay to CGCC, for deposit into the RSTF or the TNGF, six percent (6%) of its “net win” from the operation of gaming devices in excess of three hundred fifty (350).

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

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

1. Payments or the value of services provided to San Diego County, local jurisdictions, and nonprofit and civic organizations operating facilities or providing services within the County for fire, law enforcement, emergency medical services, public transit, education, tourism, recreation, and other services and infrastructure improvements intended to serve off-reservation needs of County residents – such payments shall be subject to approval by the County or local jurisdiction in the County and at least twenty percent (20%) of the annual credits must be utilized for the above stated purposes;
2. Non-gaming related capital investments and economic development projects by the Tribe that provide mutual benefits to the Tribe and the State because, for instance, they have particular cultural, social or environmental value, or diversify the sources of revenue for the Tribe’s general fund;
3. Payments to support operating expenses and capital improvements for non-tribal governmental agencies or facilities operating within the County;
4. Investments in, and any funds paid to the State in connection with, renewable energy projects that, in part, serve the gaming facility, to include facilities that incorporate charging stations for electric or other zero-emission vehicles that are available to patrons and employees of the gaming facility;
5. Payments to support capital improvements and operating expenses for facilities located on the reservation or within California that provide health care services to tribal members, Indians, and non-Indians;
6. Investments by the Tribe for water treatment or conservation projects and recycling projects; and,
7. Grants 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 sixty percent (60%) may be applied as an annual credit in all following years that this Compact is in effect, in the same percentages, until completely exhausted.

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

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. Provides that the Tribe (through its Tribal Gaming Agency) must attempt to resolve patron disputes within seven 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, and if dissatisfied with the resolution, the patron has the right to seek resolution by binding arbitration before a single arbitrator, who shall be a retired judge, in accordance with the streamlined arbitration rules and procedures of Judicial Arbitration and Mediation Services (JAMS). The Tribal Gaming Agency must 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. The Tribe agrees to waive its sovereign immunity in order to be compelled in federal or state court to abide by the resolution of arbitration. The cost and expenses of arbitration shall be initially borne by the Tribe but the arbitrator shall award to the prevailing party its costs and expenses (but no attorney fees). Any party dissatisfied with the award of the arbitrator may at the party’s election invoke the JAMS Optional Arbitration Appeal Procedure; provided that the party making such election must bear all costs and expenses of JAMS and the arbitrators associated with the appeal regardless of the outcome.
• 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 stipulating that California tort law governs claims. In addition, the Compact provides that California tort law shall apply to specified claims if the Tribe fails to adopt a Tort Liability Ordinance.
• Environmental Protections. Requires the Tribe to prepare a Tribal Environmental Impact Report (TEIR) and negotiate mitigation of any off-reservation impacts, 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. A completed TEIR must be filed with San Diego County, the Department of Justice, and the State Clearinghouse. Before commencement of a Project, and no later than the issuance of the final TEIR, the Tribe shall offer to commence negotiations with San Diego 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.
• Labor Provisions. Provides that the gaming activities authorized by this Compact may only commence after the Tribe has adopted an ordinance identical to the Tribal Labor Relations Ordinance (TLRO), referenced as Appendix C of the Compact, and the gaming activities may only continue as long as the Tribe maintains the ordinance. If the Tribe employs 250 or more persons in a tribal casino facility, then the provisions of the TLRO become effective. The TLRO provides for a secret ballot election. The new TLRO proscribed by this Compact is modeled after the Tribe’s 1999 TLRO with several modifications. The new TLRO provides for union neutrality. The Tribe will not oppose a union organization but can advocate the benefits of working for the Tribe. A labor union must issue a Notice of Intent or Organize (NOIO). For a period of 365 days following delivery of a NOIO, the union shall not engage in strikes, picketing, boycotts, attack Web sites, or other economic activity at or in relation to the tribal casino or related facility. During the 365 days after the Tribe received the NOIO, the union must collect dated and signed authorization cards and complete the secret ballot election. Failure to complete the secret ballot election within 365 days shall preclude the union from delivering another NOIO for a period of two years (730 days). After the certification that 30% of the employees have expressed an interest in the union, a notice of election shall be issued and the election shall be concluded within 30 calendar days thereafter. Secret ballot elections shall be held at the workplace and at least one neutral location. Employees may mail in ballots provided they are received by election day. Mediation for any collective bargaining agreement impasse shall be made in conjunction with the Federal Mediation and Conciliation Service. The mediation process is modeled on the Agricultural Labor Relations Act and authorizes the mediator to resolve the impasse. Disputes are presented to an arbitrator with expertise in labor law and appropriate challenges to the arbitrator’s decision may be presented to a state superior court.
• Enhanced Audit and Compliance Review Procedures. In addition to providing for an annual independent audit, the Compact allows the state to conduct its own annual audit and compact compliance review.
• Inspection and Testing of Slot Machines. 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.
• Prohibitions Regarding Minors. Provides that the Tribe shall prohibit persons under the age of eighteen (18) years from being present in any room or area in which gaming activities are being conducted unless the person is en route to a non-gaming area of the gaming facility, or is employed at the Gaming Facility in a capacity other than as a gaming employee.
• Health and Safety Standards. Provides that the Tribe has agreed to adopt and comply with tribal health standards for food and beverage handling that are 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.
• Problem Gambling. Requires the gaming operation to establish a program, approved by the Tribal Gaming Agency, to mitigate pathological and problem gaming by implementing specified measures.
• Alcohol Provisions. Makes it explicit that the purchase, sale, and service of alcoholic beverages shall be subject to state law (the Alcoholic Beverage Control Act). The Tribe shall prohibit persons under the age of 21 years from purchasing, consuming, or possessing alcoholic beverages.
• Tobacco Provisions. Provides that the Tribe agrees to provide a non-smoking area in the gaming facility and to utilize a ventilation system throughout the gaming facility that exhausts tobacco smoke to the extent reasonably feasible under state-of-the-art technology existing as of the date of the construction or significant renovation of the gaming facility, and further agrees not to offer or sell tobacco to anyone under eighteen (18) years of age.
• Emergency Services Accessibility and Possession of Firearms. Provides that the Tribe must make reasonable provisions for adequate emergency fire, medical, and related relief and disaster services for patrons and employees. Also, prohibits the possession of firearms by any person in the gaming facility at all times except for federal, state, or local law enforcement personnel, or tribal law enforcement or security personnel, as authorized.
• Workers’ Compensation. Provides that the Tribe agrees to participate in the state’s workers’ compensation program with respect to employees at the casino. All disputes arising from the workers’ compensation laws shall be heard by the State Workers’ Compensation Appeals Board pursuant to the California Labor Code. The Tribe acknowledges the jurisdiction of the Board in such manners. Furthermore, the Tribe agrees that it will participate in the state’s unemployment compensation program for providing benefits and unemployment compensation disability benefits to employees at the casino. The Tribe shall withhold all taxes due to the state, except for Tribal members living on the Tribe’s reservation, and forward such amounts to the state.
• Effective Date. Provides that this Compact shall not be effective unless and until all of the following have occurred: (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 until twenty-five (25) years following the effective date.
• Amendment by Agreement. The terms and conditions of this Compact may be amended at any time by the mutual and written agreement of both parties during the term of this Compact, 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 IGRA to provide a statutory basis for the operation and regulation of gaming on Indian lands. IGRA provides that an Indian tribe may conduct gaming activity on Indian lands if the activity “is not specifically prohibited by federal law and is conducted within a State which does not prohibit such gaming activity.”

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

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

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

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

Rincon Decision

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

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

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

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

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

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 CGCC and the Department of Justice 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. (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 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 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 the 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 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. The designated purpose of the RSTF is rigid and formulaic. This new 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.

Related/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.

AB 1245 (V. Manuel Perez, Chapter 462, Statutes of 2013) ratified the tribal-state gaming compact entered into between the State of California 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 of California 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 of California 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 of California and the Fort Independence Indian Community of Paiute Indians, executed on February 28, 2013.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

SUPPORT: (Verified 6/28/16)

Pala Band of Mission Indians (source)
California Labor Federation
California Tribal Business Alliance
City of Escondido
Ewiiaapaayp Band of Kumeyaay Indians
Fallbrook Chamber of Commerce
Jackson Band of Miwuk Indians
Jamul Indian Village
Picayune Rancheria of the Chukchansi Indians
Rincon Band of Luiseno Indians
United Auburn Indian Community
UNITE-HERE, AFL-CIO

OPPOSITION: (Verified 6/28/16)

None received

Prepared by:

6/29/16 15:50:34

**** END ****

Date of Hearing: May 13, 2015

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Jimmy Gomez, Chair

ABPCA Bill Id:AB 629

Author:(Perea) – As Amended Ver:May 6, 2015

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill requires the Secretary of the Department of Food and Agriculture (DFA) to inform milk producers and handlers, on a monthly basis, the minimum prices for the various components of market milk, and permits the Secretary to do so via written notice or publication online.

FISCAL EFFECT:

Negligible fiscal impact to DFA, potential minor administrative cost savings if DFA were to cease providing written updates on market milk component pricing and only publish online.

COMMENTS:

1) Purpose. According to the author, dairymen frequently use forward pricing and other hedging strategies to manage their businesses, and this bill provides producers and processors with important information on the component pricing of market milk.

2) End of a Milk Era? California's milk industry may be embarking on historic structural changes. Processors in California currently pay on five different classes of milk, compared with four for federal milk pools. For several years, prices for the cheese class of milk in California have consistently underperformed the federal cheese class, as cheese falls into different classes at the state and federal level, and is aggregated with higher value milk products in the federal classification.

As a result, California's three milk cooperative petitioned the US Department of Agriculture (USDA) to form a federal milk pool, and the USDA accepted the petition and will begin informational hearings next month. If the cooperatives are successful in creating a federal pool, DFA's role in establishing milk prices would be diminished or eliminated.

Analysis Prepared by: Joel Tashjian / APPR. / (916) 319-2081

Date of Hearing: April 29, 2015

ASSEMBLY COMMITTEE ON AGRICULTURE

Henry T. Perea, Chair

ABPCA Bill Id:AB 629

Author:(Perea) – As Amended Ver:April 9, 2015

SUBJECT: Market milk: stabilization and marketing plans: minimum prices.

SUMMARY: Requires the Secretary of the California Department of Food and Agriculture (CDFA) to inform producers and handlers on a monthly basis, the minimum prices for the various components of market milk, as described; and, makes technical corrections. Specifically, this bill:

1. Corrects misspellings, updates code references, and makes other technical non-substantive changes.

2. Requires CDFA to inform producers and handlers in writing, and by posting on CDFA's web site, or by other means determined appropriate by CDFA, the monthly price of each specified market milk component below:

   1. The milk fat contained in the milk;

   2. The solids-not-fat or subcomponents thereof contained in the milk;

   3. The fluid contained in the milk; and,

   4. Any combination of the milk fat contained in the milk, the solids-not-fat or subcomponents thereof contained in the milk, or the fluid contained in the milk.

EXISTING LAW authorizes the Stabilization and Marketing of Market Milk Act (Act) which provides an array of requirements for CDFA to follow in setting market milk prices; it establishes the development of market milk pricing formulas based upon the milk's components, as specified; the formulas can be modified through a public hearing process by the producers or processors petitioning CDFA, or by CDFA calling a hearing; requires the use of specified market data in order to keep California milk prices in "reasonable relationship to neighboring state prices." The Act requires processors to pay a minimum price, established by CDFA, for all milk into the stabilization pool based upon what products were made from the milk; the blended value of the pool is then paid to the producers, after a premium known as quota is paid to those holding quota.

FISCAL EFFECT: Unknown. Legislative Counsel has keyed this bill fiscal.

COMMENTS: California milk producers have been on an economic roller coaster over the last decade, but have consistently been receiving lower overall milk prices than neighboring states and federal milk market orders (FMMO). This has caused much tension in the industry and consolidation, as many producers went out of business; however, the overall milking cow numbers remained fairly steady. Between 2005 and late into 2013, milk prices were marginal to breakeven. Late in 2013 through most of 2014, the prices were some of the highest received by producers. In late 2014 to date, the prices have fallen dramatically and are at or below cost of production. CDFA has been petitioned for several price hearings over the decade but the outcomes have left producers unsatisfied with their milk prices.

California processors pay on five classes of milk – 1, 2, 3, 4a, and 4b. Federal milk pools pay on four classes of milk – 1, 2, 3, and 4. The main issue for California producers has been the prices paid on the cheese class (4b) of milk products which has significantly lagged behind the federal comparable cheese class (3) prices. To this end, California's three milk cooperatives, supported by the producers trade associations, have petitioned the United States Department of Agriculture (USDA) to create a FMMO. USDA has accepted the petition and will begin informational hearings next month. The process of creating a FMMO can be lengthy, from two to four years, to complete. Once USDA formulates a FMMO, then the producers have a straight up or down vote to accept it. Once accepted, a FMMO can be petitioned for changes, which may take as long as its creation to occur. Changing the state Act is much faster, typically within 180 days or less.

Dairymen use various business strategies to manage their operations, including forward contracting of feed and other operational inputs. This bill will provide producers and processors with important information on the component pricing of market milk and enable them to track their revenues for better operational management.

REGISTERED SUPPORT / OPPOSITION:

Support

Western United Dairymen

Opposition

None on file

Analysis Prepared by: Jim Collin / AGRI. / (916) 319-2084