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 Yocha Dehe Wintun Nation, 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 Yocha Dehe Wintun Nation, 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 law, the Gambling Control Act, provides for the licensure and regulation of various legalized gambling activities and establishments by the California Gambling Control Commission and the investigation and enforcement of those activities and establishments by the Department of Justice. The act requires 5 members to be appointed to the commission by the Governor, subject to confirmation by the Senate. The act specifies that a majority of the appointed members of the commission is a quorum and that the concurring vote of 3 members of the commission is required for any official action of the commission or for the exercise of any of the commissions duties, powers, or functions. Existing law requires that a public record of every vote of the commission be maintained at its principal office.

This bill would additionally require that a public record of every vote of the commission be posted on the commissions Internet Web site no later than 48 hours after the vote is taken.

 UNFINISHED BUSINESS  

Bill No: SB 1313

Author:

Amended: 8

Vote: - Urgency

PRIOR VOTES NOT RELEVANT

ASSEMBLY FLOOR: 80-0, 8/23/16 - See last page for vote

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 Yocha Dehe Wintun Nation.

SUBJECT: Tribal gaming: compact ratification

SOURCE: Author

DIGEST: This bill ratifies the tribal-state gaming compact (Compact) entered into between the State of California and the Yocha Dehe Wintun Nation 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.

Assembly Amendments delete the contents of this bill relating to the California Gambling Control Commission and instead add language pertaining to ratification of the Yocha Dehe Wintun Nation Compact.

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 Yocha Dehe Wintun Nation (hereafter “Tribe”) executed on August 4, 2016 and supersedes the Tribe’s 2004 amended compact. Under this Compact, the Tribe may operate a maximum of 3,500 gaming devices (slot machines) on eligible Indian lands held in trust for the Tribe and located within the boundaries of the Tribe’s Reservation (as described in Appendix A) in the Capay Valley, Yolo County, CA.

The Tribe’s 2004 amended compact, among other things, eliminated the cap on the number of slot machines that could be operated by the Tribe and required the Tribe to make annual payments to the State of $25 million for 18 years, in addition to a $2 million annual payment into the Revenue Sharing Trust Fund (RSTF), as well as, a graduated scale of progressively higher annual fees for additional slot machines above the existing limit of 2,000 slot machines, reaching up to $25,000 per additional machine (4,500 machines and above). The fees represented approximately 15% of the net win of the additional machines on average.

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 plus an additional amount of $1.6 million, capped at $3 million, to insure the Special Distribution Fund (SDF) remains solvent and to cover a portion of the regulatory costs for small gaming tribes. The Tribe has also agreed to pay $18 million annually into the RSTF or the Tribal Nation Grant Fund (TNGF), to be shared with tribes that are not gaming or that otherwise are not substantially benefiting from gaming. The Tribe may take an annual credit of up to $9 million (out of the $18 million) for various investments and infrastructure improvements that in part benefit county residents, landless northern California tribes, dis-enrolled Indians, fire, law enforcement, emergency medical services, public transit, education, tourism, and for facilities that provide health care services to tribal members and other members of the local community.

Also, under this Compact, the Tribe has agreed to pay the State annually, a revenue contribution of $15 million and permits the Tribe to take an annual credit of up to $9 million (out of the $15 million) for the Tribe’s payments covering state or local government services, mitigation of the gaming operation’s impacts, and economic development or revitalization. This Compact also provides for an additional credit of up to $6 million (out the $15 million) for projects, initiatives or investments which mitigate the impacts of gaming or provide benefits to the State or tribes in California. The Tribe may also deposit annually up to $2 million of that $6 million into a scholarship fund created by the Tribe and the State (California Native American Education and Scholarship Fund) to provide scholarships for undergraduate, graduate and professional education that benefit students of non-gaming or limited-gaming tribes located in California.

Furthermore, the 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) provides that the Tribe may retain its existing Tribal Labor Relations Ordinance (TLRO) which has been in effect for almost 20 years; and, (4) contains provisions to protect the health and safety of patrons, guests, and employees.

BRIEF HISTORY OF THE YOCHA DEHE WINTUN NATION

Yocha Dehe Wintun Nation is a federally recognized Indian tribe located in northern Yolo County, about 45 miles northwest of Sacramento. In 1999, the Tribe and the State entered into a tribal-state gaming compact which was subsequently amended in 2004. Yocha Dehe means “home by the spring water” in the Tribe’s native Patwin language, and literally describes the lands upon which its people live, and have lived, since time immemorial. The Tribe’s relationship with the United States began in the 1900’s when its people were relocated to a barren, non-irrigable parcel in Rumsey, the town for which their government, and reservation, was once named, and thereafter, to a small parcel of land, in the Capay Valley, where they managed to cultivate small amounts of food, but nonetheless lived in poverty, depending on the United States government for survival.

In 1985, the Tribe opened its first facility, a bingo hall, which generated money to help support its government and provide for the health and welfare of its struggling people. Today, the Tribe owns and operates Cache Creek Casino Resort, which opened in 2004 and employs approximately 2,300 people, making it the largest private employer in Yolo County, and a major economic engine in the region. The casino/resort, located on State Highway 16 in Brooks, offers more than 2,000 slot machines, 122 table games, hotel rooms and suites, spa, restaurants, gift shop, mini mart, headliner concerts, an 18-hole golf course and other amenities.

The Tribe has 1,120 total acres of trust land but manages more than 13,000 acres of land, approximately 1,500 acres of which are farmed with 14 crops. Also, about 500 head of Angus cross cattle graze on the Tribe’s land. Additionally, the Tribe operates a state-of-the-art olive mill. The Tribe notes that its Fire Department recently received international accreditation for the second time and remains the only Indian fire department to ever earn such accreditation. The Tribe currently provides nearly $6 million annually to Yolo County through an MOU. Since 2000, the Tribe has contributed more than $25 million dollars to local partners in the community through their philanthropic Community Fund.

KEY COMPONENTS OF THE COMPACT

Scope of Class III Gaming Authorized. Provides that the Tribe is authorized to operate a maximum of 3,500 gaming devices (slot machines), banking or percentage card games, and any devices or games that are authorized under state law to the California State Lottery, 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. Provides that 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).

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).  Provides that 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, the administration and implementation of tribal-state gaming compacts, and funding for the Office of Problem Gambling, as determined by the monies appropriated in the annual Budget Act each fiscal year to carry out those purposes.  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.”

The Tribe further agrees to pay an additional $1.6 million into the SDF to ensure it remains solvent. In the event the pro rata funding for the SDF statewide has proven sufficient for three consecutive years, the parties agree to meet and confer for the purpose of making an appropriate reduction in the additional payment. The Tribe’s payment into the SDF is capped at $3 million unless the Tribe’s pro rata share exceeds that amount. In the event the Tribe’s pro rata share exceeds $3 million, the Tribe’s payment shall be capped at the pro rata share.

Additional Revenue Contribution. Provides that the Tribe shall pay to the State annually a revenue contribution of $15 million and provides that the Tribe may take an annual credit of up to $9 million (out of the $15 million) for the Tribe’s payments covering state or local government services, mitigation of the gaming operation’s impacts, and financing infrastructure projects and economic development or revitalization, including, but not limited to, construction, repair, maintenance and improvements of structures, operations and facilities, on non-Indian lands in counties within the Tribe’s ancestral territory (Colusa, Lake, Napa, Solano, Yolo counties) that benefit the Tribe, its gaming operation, and/or the governments and non-tribal communities within these counties. The Tribe may also take $4.5 million in credits for its annual payments to Yolo County under the parties’ existing and any subsequent MOUs.

Furthermore, the Compact provides that the Tribe may take additional credits totaling up to $6 million (out of the $15 million) for projects, initiatives or investments the parties agree on which mitigate the impacts of gaming or provide benefits to the State or tribes in California. The Tribe may also deposit annually up to $2 million of that $6 million for deposit into a scholarship fund created by the Tribe and the State (California Native American Education and Scholarship Fund) to provide scholarships for undergraduate, graduate and professional education that benefit students of non-gaming or limited-gaming tribes located in California.

Payments to the RSTF or the TNGF. Provides that the Tribe agrees to pay $18 million annually to the California Gambling Control Commission (CGCC) for deposit into the RSTF or the TNGF.

Credits Applied to the RSTF or the TNGF. From its payments to the RSTF or the TNGF, the Tribe may take annual credits for up to $9 million (out of the $18 million) for the following purposes:

1. Payments by the Tribe to the County or local jurisdictions operating facilities or providing services within the County for fire, law enforcement, emergency medical services, public transit, education, tourism, or other services and infrastructure improvements intended to serve off-reservation needs of County residents as well as those of the Tribe – such payments shall be subject to approval by a special entity comprised of County, tribe and community representatives;
2. Payments to reimburse Yolo County for any loss of property tax revenues;
3. Non-gaming related capital investments and expenditure 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 because they diversify the sources of revenue for the Tribe’s general fund;
4. Payments to support operating expenses and capital improvements for non-tribal governmental agencies or facilities operating within the Counties of Colusa, Lake, Napa, Sacramento, Sonoma, Solano, Sutter, or Yolo;
5. Investments in, and any funds paid to the State in connection with, energy projects that, in part, serve the gaming facility, the County, or the local community. Allowable projects include projects that incorporate charging stations for electric or other zero-emission vehicles that are available to the Tribe’s citizens, patrons and employees of the gaming facility, or non-tribal members of the public;
6. Payments to support capital improvements and operating expenses for facilities within California that provide health care services to tribal citizens, Indians, and non-Indians;
7. Investments or expenditures to preserve, revitalize, or enhance the Tribe’s cultural values, practices and traditions, as well as, payments to any non-profit institutions providing education to Native American people, including the California Tribal College;
8. Payments for providing healthcare benefits, education or job training to persons who have been dis-enrolled from an Indian tribe in California; and,
9. Grants to Indians of Patwin or Wintun descent who are not enrolled citizens of the Tribe, for educational, cultural or vocational purposes, or to landless federally-recognized tribes from northern California, or federally-recognized tribes with Indian lands within the Counties of Colusa, Lake, Napa, Sacramento, Sonoma, Solano, Sutter, or Yolo, for economic development.

All excess authorized credits that cannot be applied in any one year may be applied as an annual credit in all following years that this Compact is in effect, up to a total of $9 million, until completely exhausted.

ADDITIONAL COMPONENT 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 pertaining to the play or operation of any game, including refusal to pay to a patron any alleged winnings from any gaming activities. A patron must make an oral or written complaint to personnel of the gaming operation over the play or operation of any game within seven days of the play or operation at issue. The patron shall be given written notice by the gaming operation that the patron has the right to request, in writing, resolution of the complaint by the Tribal Gaming Agency which must be made within 15 days of receipt. If the patron is dissatisfied with the Tribal Gaming Agency’s resolution of the complaint, the patron may seek resolution in either the Tribe’s tribal court system, or through binding arbitration pursuant to the JAMS process. The Tribal Gaming Agency shall conduct an investigation and shall render a decision consistent with industry practice. The Tribal Gaming Agency’s decision shall be issued within 60 days. If still dissatisfied, the patron may request that the dispute be settled by binding arbitration before a single arbitrator, who shall be a retired judge, in accordance with the streamlined arbitration rules and procedures of JAMS. 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 JAMS Optional Arbitration Appeal Procedure 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 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, if a tribal court system is established, before a three-member tribal claims commission, or by arbitration before a single arbitrator who shall be retired judge, in accordance with the Comprehensive Arbitration Rules and Procedures of JAMS. Any party dissatisfied with the award of the tribal court, claims commission, or JAMS arbitration, may at the party’s election invoke the JAMS Optional Arbitration Appeal Procedure. The JAMS appeal will take place in the County and shall use one arbitrator, agreed upon by the parties, and shall not be a de novo review, but shall be based solely on the record developed in the tribal court, claims commission, or JAMS arbitrator proceedings. The Tribe consents to the jurisdiction of the tribal court, claims commission, JAMS arbitration and JAMS appeal.
• 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. Provides that the gaming activities authorized by this Compact must continue under the Tribal Labor Relations Ordinance (TRLO) previously adopted by the Tribe and referenced as Appendix C of this Compact. This Compact acknowledges that the parties may amend the existing TLRO. (UNITE-HERE has represented workers at the Cache Creek Casino for approximately 20 years.)
• 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 21 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 Provisions. Makes it explicit that the purchase, sale, and service of alcoholic beverages shall be subject to state law – the Alcoholic Beverage Control 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 in 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 gaming operation must establish a program, approved by the Tribal Gaming Agency, to mitigate pathological and problem gaming by implementing specified measures.
• Health and Safety Standards. Provides that the Tribe has agreed to adopt and comply with tribal 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.
• Effective Date. Provides that the 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 2) 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.: Local:

SUPPORT: (Verified 8/22/16)

Agua Caliente Band of Cahuilla Indians

Barona Band of Mission Indians

Buena Vista Rancheria of Me-Wuk Indians

California Federation of Labor

Jamul Indian Village

Pechanga Band of Luiseno Indians

Teamsters

UNITE HERE, AFL-CIO

Viejas Band of Kumeyaay Indians

Yocha Dehe Wintun Nation

OPPOSITION: (Verified 8/22/16)

None received

ASSEMBLY FLOOR: 80-0, 8/23/16

AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, 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

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

8/23/16 20:19:30

**** END ****

SENATE THIRD READING

STR Bill Id:SB 1313

Author:(Hall)

As Introduced Ver:August 18, 2016

2/3 vote. Urgency

SENATE VOTE: 37-0

SUMMARY: Ratifies the Tribal-State Class III gaming compact (Compact) between the State of California (State) and the Yocha Dehe Wintun Nation (Tribe) which was executed on August 4, 2016. Specifically, this bill:

1. Ratifies the Tribal-State Class III gaming compact entered into between the State of California and the Yocha Dehe Wintun Nation (Tribe) executed on August 4, 2016.
2. Supersedes the existing 2004 compact between the Tribe and the State of California.
3. Allows the Tribe to operate a maximum of 3,500 gaming devices (slot machines) on eligible Indian lands held in trust for the Tribe, located within the boundaries of the Tribe's reservation, as described, in Appendix A of the Compact.
4. Provides the Tribe will pay to the State its pro rata share of costs the State incurs for the performance of its duties under the Compact plus an additional amount of $1.6 million, not to exceed $3 million, to insure the Special Distribution Fund (SDF) remains solvent and to cover a portion of the regulatory costs for small gaming tribes. The Tribe has also agreed to pay $18 million annually into the Revenue Sharing Trust Fund (RSTF) or the Tribal Nation Grant Fund (TNGF), to be shared with tribes that are not gaming or that otherwise are not substantially benefiting from gaming. The Tribe may take an annual credit of up to $9 million (out of the $18 million) for various investments and infrastructure improvements that in part benefit county residents, landless northern California tribes, disenrolled Indians, fire, law enforcement, emergency medical services, public transit, education, tourism, and for facilities that provide health care services to tribal members and other members of the local community.
5. Provides the Tribe will pay the State annually, a revenue contribution of $15 million and permits the Tribe to take an annual credit of up to $9 million (out of the $15 million) for the Tribe's payments covering state or local government services, mitigation of the gaming operation's impacts, and economic development or revitalization. The Compact states that $4.5 million (out of the $9 million credit) of the amount the Tribe annually pays the County under an existing intergovernmental agreement (which expires on Dec. 31, 2020) qualifies for a credit under this provision. The credit will continue to apply in the event the parties extend or renegotiate the existing intergovernmental agreement such that payment obligations exist under the agreement beyond its 2020 term.
6. Provides for an additional credit of up to $6 million (out the $15 million) for projects, initiatives or investments that mitigate the impacts of gaming or provide benefits to the State or tribes in California. The Tribe may also deposit annually up to $2 million of that $6 million into a scholarship fund created by the Tribe and the State (California Native American Education and Scholarship Fund) to provide scholarships for undergraduate, graduate and professional education that benefit students of non-gaming or limited-gaming tribes located in California.
7. The 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) Maintains the Tribe's existing 1999 Tribal Labor Relations Ordinance (TLRO); and, d) contains provisions to protect the health and safety of patrons, guests, and employees.
8. Provides 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.
9. States 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).

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 15, 2016, the Assembly Governmental Organization Committee held an informational hearing on the contents of the Compact entered into between the State of California and the Yocha Dehe Wintun Nation.

Brief History and Overview: The Yocha Dehe Wintun Nation is a federally recognized Indian tribe located in northern Yolo County, about 45 miles northwest of Sacramento. Yocha Dehe means "home by the spring water" in the Tribe's native Patwin language, and literally describes the lands upon which its people live, and have lived, since time immemorial.

The Tribe's relationship with the United States began in the 1900's when its people were relocated to a barren, non-irrigable parcel in Rumsey, the town for which their government, and reservation, was once named, and thereafter, to a small parcel of land, in the Capay Valley, where they managed to cultivate small amounts of food, but nonetheless lived in poverty, depending on the United States government for survival.

In 1985, the Tribe opened its first facility, a bingo hall, which generated money to help support its government and provide for the health and welfare of its struggling people. In 1988, with the enactment of the Indian Gaming Regulatory Act and Proposition 1A in 2000, the Tribe was able to pursue and offer broader forms of gaming (Class III gaming compact).

In 1999, the Tribe and the State entered into a Tribal-State Class III gaming compact, which they amended in 2004. The Tribe's 2004 amended compact, among other things, eliminated the cap on the number of slot machines that could be operated by the Tribe and required the Tribe to make annual payments to the State of $25 million until 2030 which was in addition to a $2 million annual payment into the RSTF, as well as, a graduated scale of progressively higher annual fees for additional slot machines above the existing limit of 2,000 slot machines, reaching up to $25,000 per additional machine (4,500 machines and above). The fees represented approximately 15% of the net win of the additional machines on average.

The Compact's preamble states that through revenues generated by its gaming operation, the Tribe has been able to strengthen its government and achieve economic independence, by providing education and health care to its people; protecting its traditions and values through cultural preservation, including the revitalization of its language; and preserving the cultural resources and sacred sites in the linguistic and cultural territory with which the Tribe and its sister Patwin-speaking tribes are historically connected.

The Tribe owns and operates the Cache Creek Casino Resort, which opened in 2004 and employs approximately 2,300 people, making it the largest private employer in Yolo County, and a major economic contributor in the region. The Casino and Resort, located on State Highway 16 in Brooks, offers more than 2,000 slot machines, 122 table games, hotel rooms and suites, spa, restaurants, gift shop, mini mart, headliner concerts, an 18-hole golf course and other amenities.

The Tribe has 1,120 total acres of trust land but manages more than 13,000 acres of land, approximately 1,500 acres of which are farmed with 14 crops. In addition, more than 500 Angus cattle graze on the Tribe's reservation. The Tribe has constructed a custom crush olive mill that serves not only the Tribe, but also area farmers in the production of olive oil. The Tribe notes that its Fire Department recently received international accreditation for the second time and remains the only Indian fire department to ever earn such accreditation. The Tribe currently provides nearly $6 million annually to Yolo County through an memorandum of understanding (MOU). Since 2000, the Tribe has contributed more than $25 million dollars to local partners in the community through their philanthropic Community Fund.

The Compact's preamble declares that the Tribe and State are hopeful this new Compact will enable the Tribe to redirect Compact payments for good and worthy causes, providing, as an example, needed funding, economic development and infrastructure for tribal and non-tribal governments; scholarships for Native American people, and funding for schools dedicated to Native American education; capital to help local governments establish the machinery needed to protect cultural resources threatened by development; and housing and health care benefits for those in need.

The Compact's preamble further states that the State and the Tribe have therefore concluded that this Compact protects the interests of the Tribe and its citizens, the surrounding community, and the California public, and will promote and secure long-term stability, mutual respect, and mutual benefits.

Key Components of 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).

Scope of Class III Gaming Authorized: Authorizes the Tribe to operate a maximum of 3,500 gaming devices (slot machines), banking or percentage card games, and any devices or games that are authorized under state law to the California State Lottery, 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.

Credits Applied to the RSTF or the TNGF: From its payments to the RSTF or the TNGF, the Tribe may take annual credits for up to $9 million (out of the $18 million) for the following purposes:

1. Payments by the Tribe to the County or local jurisdictions operating facilities or providing services within the County for fire, law enforcement, emergency medical services, public transit, education, tourism, or other services and infrastructure improvements intended to serve off-reservation needs of County residents as well as those of the Tribe – such payments shall be subject to approval by a special entity comprised of County, tribe and community representatives;
2. Payments to reimburse Yolo County for any loss of property tax revenues;
3. Payments to support operating expenses and capital improvements for non-tribal governmental agencies or facilities operating within the Counties of Colusa, Lake, Napa, Sacramento, Sonoma, Solano, Sutter, or Yolo;
4. Non-gaming related capital investments and expenditure 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 because they diversify the sources of revenue for the Tribe's general fund;
5. Payments to support capital improvements and operating expenses for facilities within California that provide health care services to tribal citizens, Indians, and non-Indians;
6. Investments or expenditures to preserve, revitalize, or enhance the Tribe's cultural values, practices and traditions, as well as, payments to any non-profit institutions providing education to Native American people, including the California Tribal College;
7. Investments in, and any funds paid to the State in connection with, energy projects that, in part, serve the gaming facility, the County, or the local community. Allowable projects include projects that incorporate charging stations for electric or other zero-emission vehicles that are available to the Tribe's citizens, patrons and employees of the gaming facility, or non-tribal members of the public;
8. Payments for providing healthcare benefits, education or job training to persons who have been disenrolled from an Indian tribe in California; and,
9. Grants to Indians of Patwin or Wintun descent who are not enrolled citizens of the Tribe, for educational, cultural or vocational purposes, or to landless federally-recognized tribes from northern California, or federally-recognized tribes with Indian lands within the Counties of Colusa, Lake, Napa, Sacramento, Sonoma, Solano, Sutter, or Yolo, for economic development.

All excess authorized credits that cannot be applied in any one year may be applied as an annual credit in all following years that this Compact is in effect, up to a total of $9 million, until completely exhausted.

Additional Revenue Contribution, Local Community Credit Fund and California Native American Education and Scholarship Fund: The Tribe shall pay to the State annually a revenue contribution of $15 million and provides that the Tribe may take an annual credit of up to $9 million (out of the $15 million) for the Tribe's payments covering state or local government services, mitigation of the gaming operation's impacts, and financing infrastructure projects and economic development or revitalization, including, but not limited to, construction, repair, maintenance and improvements of structures, operations and facilities, on non-Indian lands in counties within the Tribe's ancestral territory (Colusa, Lake, Napa, Solano, Yolo counties) that benefit the Tribe, its gaming operation, and/or the governments and non-tribal communities within these counties. The Tribe may also take $4.5 million in credits for its annual payments to Yolo County under the parties' existing and any subsequent MOUs.

Furthermore, the Compact provides that the Tribe may take additional credits totaling up to $6 million (out of the $15 million) for projects, initiatives or investments the parties agree on which mitigate the impacts of gaming or provide benefits to the State or tribes in California. The Tribe may also deposit annually up to $2 million of that $6 million for deposit into a scholarship fund created by the Tribe and the State (California Native American Education and Scholarship Fund) to provide scholarships for undergraduate, graduate and professional education that benefit students of non-gaming or limited-gaming tribes located in California.

Payments to the RSTF or the TNGF: The Tribe agrees to pay $18 million annually to the California Gambling Control Commission (CGCC) for deposit into the RSTF or the TNGF.

Payments to the Special Distribution Fund: 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, the administration and implementation of tribal-state gaming compacts, and funding for the Office of Problem Gambling, as determined by the monies appropriated in the annual Budget Act each fiscal year to carry out those purposes. 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, as specified.

Additionally, the Tribe further will pay $1.6 million into the SDF to ensure it remains solvent. In the event the pro rata funding for the SDF statewide has proven sufficient for three consecutive years, the parties agree to meet and confer for the purpose of making an appropriate reduction in the additional payment. The Tribe's payment into the SDF is capped at $3 million unless the Tribe's pro rata share exceeds that amount, as defined.

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.

Off-Reservation Environmental and Economic Impacts: Provides 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.

Intergovernmental Agreement: Before the commencement of a project, and no later than the issuance of the Final TEIR to the County, the Tribe shall offer to commence negotiations with the County, and upon the County's acceptance of the Tribe's offer, shall negotiate with the County and shall enter into an enforceable written agreement regarding the timely mitigation of any significant effect on the off-reservation environment including provisions relating to traffic impacts, compensation for law enforcement, fire protection, emergency medical services, and any other public services to be provided by the County to the Tribe, as specified.

The Tribe and Yolo County have an existing intergovernmental agreement that expires on December 31, 2020.

Additional Compact Components:

Gaming Ordinance and Regulations: All gaming activities 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 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. Furthermore, every gaming employee must obtain, and thereafter maintain current, a valid tribal gaming license, as specified.

Minimum Internal Control Standards (MICS): The Tribe must 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. 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.

Public and Workplace Liability: Requires the Tribe to obtain and maintain a commercial general liability insurance policy that provides coverage of no less than $10 million. In addition, 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, if a tribal court system is established, before a three-member tribal claims commission, or by arbitration before a single arbitrator who shall be retired judge, in accordance with the Comprehensive Arbitration Rules and Procedures of JAMS. Any party dissatisfied with the award of the tribal court, claims commission, or JAMS arbitration, may at the party's election invoke the JAMS Optional Arbitration Appeal Procedure. The JAMS appeal will take place in the County and shall use one arbitrator, agreed upon by the parties, and shall not be a de novo review, but shall be based solely on the record developed in the tribal court, claims commission, or JAMS arbitrator proceedings. The Tribe consents to the jurisdiction of the tribal court, claims commission, JAMS arbitration and JAMS appeal.

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: Gaming devices will need 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. 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.

Labor Provisions: Provides that the gaming activities authorized by this Compact must continue under the Tribal Labor Relations Ordinance (TLRO) previously adopted by the Tribe and referenced as Appendix C of this Compact. This Compact acknowledges that the parties may amend the existing TLRO. UNITE-HERE has represented workers at the Cache Creek Casino for an extended period.

Workers' Compensation: 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: The Compact prohibits persons under the age of 21 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 in 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.

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

Building Codes and Fire Safety: In order to assure the protection of the health and safety of all gaming facility patrons, guests, and employees, the Tribe shall adopt or has already adopted, and shall maintain throughout the term of this Compact, an ordinance that requires any covered gaming facility construction to meet or exceed the applicable codes. Gaming facility construction, expansion, improvement, modification or renovation must also comply with the federal Americans with Disabilities Act.

Health and Safety Standards: 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. In addition, 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 adopt and comply with tribal health standards for food and beverage handling that are 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.

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 for 25 years following the effective date (2041).

Additional Background Information:

Rincon Decision: In 2004, the Rincon Band of Mission Indians sued the State in federal court after negotiations for a new gambling agreement with then-Governor Schwarzenegger 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 slot machines.

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

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

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

SB 187 (Hall) of the current legislative session. Ratifies the tribal-state gaming compact entered into between the State and the Jamul Indian Village, executed August 8, 2016.

AB 2915 (Eduardo Garcia) of the current legislative session. Provides for the ratification of a new Tribal-State gaming compact between the State and Agua Caliente Band of Cahuilla Indians, executed on August 4, 2016.

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

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

AB 1282 (Gray) of the current legislative session. Ratifies 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. Ratifies 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. Ratifies 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. Ratifies 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: 0004266

SENATE THIRD READING

STR Bill Id:SB 1313

Author:(Hall)

As Introduced Ver:February 19, 2016

Majority vote

SENATE VOTE: 37-0

SUMMARY: Requires that a public record of every vote of the California Gambling Control Commission (CGCC) be posted on the CGCC's Internet Web site no later than 48 hours after the vote is taken.

EXISTING LAW:

1) Provides, under the Gambling Control Act (Act), for the licensure and regulation of various legalized gambling activities and establishments by the CGCC and the investigation and enforcement of those activities and establishments by the Department of Justice (DOJ).

2) Requires five members to be appointed by the CGCC by the Governor, subject to confirmation by the California State Senate.

3) Specifies that a majority of the appointed members of the CGCC is a quorum and that a concurring vote of three members of the CGCC is required for any official action of the CGCC or for the exercise of any of the CGCC's duties, powers, or functions.

4) Requires that a public record of every vote of the CGCC be maintained at its principal office.

5) Requires under the Bagley-Keene Act, that all meetings of state bodies be open to the public, with certain specific exceptions.

FISCAL EFFECT: According to the Assembly Appropriations Committee, this bill will incur no additional state costs.

COMMENTS:

Purpose of the bill: According to the author, "while current law requires that votes of the CGCC be maintained at its principal office, there is no requirement that votes be made available to the public online. By requiring that these votes are posted on the CGCC's Internet Web site, this bill ensures that the public is aware of the decisions that are being made by the CGCC."

Background: The Act provides the CGCC with jurisdiction over the operation of gambling establishments in California. The Act assigns the CGCC the responsibility of assuring that gambling licenses are not issued to, or held by, unqualified or disqualified persons, or by persons whose operations are conducted in a manner that is harmful to the public health, safety, or welfare. The Act directs the CGCC to issue licenses only to those persons of good character, honesty and integrity, whose prior activities, criminal record, if any; reputation, habits and associations do not pose a threat to the public interest of this state.

The Bureau of Gambling Control (Bureau) within the DOJ is the state law enforcement authority with special jurisdiction over gambling activities within the State of California. The Bureau of Gambling Control is also the entity that receives applications and fees and conducts criminal background investigations and audits.

Bagley-Keene Act: When the Legislature enacted the Bagley-Keene Act of 1967 it essentially said that when a body sits down to develop its consensus, there needs to be a seat at the table reserved for the public. In doing so, the Legislature has provided the public with the ability to monitor and be part of the decision-making process. The Bagley-Keene Act explicitly mandates open meetings for California State agencies, boards, and commissions. It facilitates transparency of government activities and protects the rights of citizens to participate in state government deliberations. Therefore, absent a specific reason to keep the public out of meetings, the public should be allowed to monitor and participate in the decision-making process. Similarly, California's Brown Act of 1953 protects citizen's rights to open meetings at the local county government levels.

Analysis Prepared by: Kenton Stanhope / G.O. / (916) 319-2531 FN: 0004214

Date of Hearing: August 10, 2016

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez, Chair

SBPCA Bill Id:SB 1313

Author:(Hall) – As Introduced Ver:February 19, 2016

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

SUMMARY:

This bill requires that a public record of every vote of the California Gambling Control Commission (CGCC) be posted on the CGCC’s Internet Web site no later than 48 hours after the vote is taken.

FISCAL EFFECT:

No additional state costs.

COMMENTS:

Background and Purpose. The Gambling Control Act (Act) provides the CGCC with jurisdiction over the operation of gambling establishments in California. The Act assigns the CGCC the responsibility of assuring that gambling licenses are not issued to unqualified or disqualified persons. The Act also directs the CGCC to issue licenses only to those persons of good character, honesty and integrity, whose prior activities, criminal record, if any, reputation, habits, and associations do not pose a threat to the public interest of this state.

The Bureau of Gambling Control (Bureau), within the Department of Justice (DOJ) is the state law enforcement authority with special jurisdiction over gambling activities within the State of California. The Bureau of Gambling Control is also the entity that receives applications and fees, and conducts criminal background investigations and audits.

According to the author, “while current law requires that votes of the CGCC be maintained at its principal office, there is no requirement that votes be made available to the public online. By requiring that these votes are posted on the CGCC’s Internet Web site, this bill ensures that the public is aware of the decisions that are being made by the CGCC.”

Analysis Prepared by: Luke Reidenbach / APPR. / (916) 319-2081

Date of Hearing: June 8, 2016

ASSEMBLY COMMITTEE ON GOVERNMENTAL ORGANIZATION

Adam Gray, Chair

SBPCA Bill Id:SB 1313

Author:(Hall) – As Introduced Ver:February 19, 2016

SENATE VOTE: 37-0

SUBJECT: Gambling: California Gambling Control Commission

SUMMARY: Requires that a public record of every vote of the California Gambling Control Commission (CGCC) be posted on the CGCC’s Internet Web site no later than 48 hours after the vote is taken.

EXISTING LAW:

1) Provides, under the Gambling Control Act (Act), for the licensure and regulation of various legalized gambling activities and establishments by the CGCC and the investigation and enforcement of those activities and establishments by the Department of Justice (DOJ).

2) Requires five members to be appointed by the CGCC by the Governor, subject to confirmation by the California State Senate.

3) Specifies that a majority of the appointed members of the CGCC is a quorum and that a concurring vote of three members of the CGCC is required for any official action of the CGCC or for the exercise of any of the CGCC’s duties, powers, or functions.

4) Requires that a public record of every vote of the CGCC be maintained at its principal office.

5) Requires under the Bagley-Keene Act, that all meetings of state bodies be open to the public, with certain specific exceptions.

FISCAL EFFECT: Unknown

COMMENTS:

Purpose of the bill: According to the author, “while current law requires that votes of the CGCC be maintained at its principal office, there is no requirement that votes be made available to the public online. By requiring that these votes are posted on the CGCC’s Internet Web site, this bill ensures that the public is aware of the decisions that are being made by the CGCC.”

Background: The Act provides the CGCC with jurisdiction over the operation of gambling establishments in California. The Act assigns the CGCC the responsibility of assuring that gambling licenses are not issued to, or held by, unqualified or disqualified persons, or by persons whose operations are conducted in a manner that is harmful to the public health, safety, or welfare. The Act directs the CGCC to issue licenses only to those persons of good character, honesty and integrity, whose prior activities, criminal record, if any; reputation, habits and associations do not pose a threat to the public interest of this state.

The Bureau of Gambling Control (Bureau) within the DOJ is the state law enforcement authority with special jurisdiction over gambling activities within the State of California. The Bureau of Gambling Control is also the entity that receives applications and fees and conducts criminal background investigations and audits.

Bagley-Keene Act: When the Legislature enacted the Bagley-Keene Act of 1967 it essentially said that when a body sits down to develop its consensus, there needs to be a seat at the table reserved for the public. In doing so, the Legislature has provided the public with the ability to monitor and be part of the decision-making process. The Bagley-Keene Act explicitly mandates open meetings for California State agencies, boards, and commissions. It facilitates transparency of government activities and protects the rights of citizens to participate in state government deliberations. Therefore, absent a specific reason to keep the public out of meetings, the public should be allowed to monitor and participate in the decision-making process. Similarly, California’s Brown Act of 1953 protects citizen’s rights to open meetings at the local county government levels.

REGISTERED SUPPORT / OPPOSITION:

Support

None on file

Opposition

None on File

Analysis Prepared by: Kenton Stanhope / G.O. / (916) 319-2531

 CONSENT  

Bill No: SB 1313

Author:

:

Vote:

SENATE GOVERNMENTAL ORG. COMMITTEE: 12-0, 4/12/16

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

NO VOTE RECORDED: Runner

SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8

SUBJECT:

SOURCE: Author

DIGEST: This bill requires that a public record of every vote of the California Gambling Control Commission (CGCC) be posted on the CGCC’s Internet Web site no later than 48 hours after the vote is taken.

ANALYSIS:

Existing law:

1. Provides, under the Gambling Control Act, for the licensure and regulation of various legalized gambling activities and establishments by the CGCC and the investigation and enforcement of those activities and establishments by the Department of Justice (DOJ).
2. Requires five members to be appointed to the CGCC by the Governor, subject to confirmation by the California State Senate.
3. Specifies that a majority of the appointed members of the CGCC is a quorum and that a concurring vote of three members of the CGCC is required for any official action of the CGCC or for the exercise of any of the CGCC’s duties, powers, or functions.
4. Requires that a public record of every vote of the CGCC be maintained at its principal office.

This bill requires that a public record of every vote of the CGCC be posted on the CGCC’s Internet Web site no later than 48 hours after the vote is taken.

Background

Purpose of the bill. According to the author, “while current law requires that votes of the CGCC be maintained at its principal office, there is no requirement that votes be made available to the public online. By requiring that these votes are posted on the CGCC’s Internet Web site, this bill ensures that the public is aware of the decisions that are being made by the CGCC.”

California Gambling Control Commission. The CGCC is the official gambling commission of the State of California. The five member CGCC acts as the regulatory body over gambling establishments, all persons or transactions regarding ownership interest of gambling enterprises, third party providers and proposition player services, and tribal casinos. The CGCC is responsible for setting policy, establishing regulations, making determinations of suitability for gaming employees and other individuals and entities, issuing licenses, acting as administrator of gaming revenues deposited into the Indian Gaming Special Distribution Fund and the trustee over the revenues deposited into the Gaming Revenue Sharing Trust Fund, and administering the provisions of the Gambling Control Act and the Tribal State Gaming Compacts.

The Bureau of Gambling Control within the DOJ is the state law enforcement authority with special jurisdiction over gambling activities within the State of California. The Bureau of Gambling Control is also the entity that receives applications and fees and conducts criminal background investigations and audits.

Prior/Related Legislation

SB 399 (Hall, 2015) would have required that a public record of every vote of the CGCC be posted on the CGCC’s Internet Web site no later than 48 hours after the vote is taken. (Gutted and amended in the Assembly)

SB 650 (Hall, 2015) clarifies that the CGCC shall keep a record pertaining to its regular and special meetings and a record of all applications for licenses under the Gambling Control Act open to public inspections during normal business hours. (Pending in the Assembly Governmental Organization Committee)

AB 2720 (Ting, Chapter 510, Statutes of 2014) required a state body to publicly report any action taken and the vote or abstention on that action of each member present for the action.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

SUPPORT: (Verified 4/25/16)

None received

OPPOSITION: (Verified 4/25/16)

None received

Prepared by:

4/27/16 15:57:30

**** END ****

SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION

Senator Isadore Hall, III

Chair

2015 - 2016 Regular

Bill No: 1313 Hearing Date: 4/12/2016

SUBJECT: Gambling: California Gambling Control Commission

DIGEST: This bill requires that a public record of every vote of the California Gambling Control Commission (CGCC) be posted on the CGCC’s Internet Web site no later than 48 hours after the vote is taken.

ANALYSIS:

Existing law:

1. Provides, under the Gambling Control Act, for the licensure and regulation of various legalized gambling activities and establishments by the CGCC and the investigation and enforcement of those activities and establishments by the Department of Justice (DOJ).
2. Requires five members to be appointed by the CGCC by the Governor, subject to confirmation by the California State Senate.
3. Specifies that a majority of the appointed members of the CGCC is a quorum and that a concurring vote of three members of the CGCC is required for any official action of the CGCC or for the exercise of any of the CGCC’s duties, powers, or functions.
4. Requires that a public record of every vote of the CGCC be maintained at its principal office.
5. Requires under the Bagley-Keene Act, that all meetings of state bodies be open to the public, with certain specific exceptions.

This bill requires that a public record of every vote of the CGCC be posted on the CGCC’s Internet Web site no later than 48 hours after the vote is taken.

Background

Purpose of the bill. According to the author, “while current law requires that votes of the CGCC be maintained at its principal office, there is no requirement that votes be made available to the public online. By requiring that these votes are posted on the CGCC’s Internet Web site, this bill ensures that the public is aware of the decisions that are being made by the CGCC.”

California Gambling Control Commission. The CGCC is the official gambling commission of the State of California. The five member CGCC acts as the regulatory body over gambling establishments, all persons or transactions regarding ownership interest of gambling enterprises, third party providers and proposition player services, and tribal casinos. The CGCC is responsible for setting policy, establishing regulations, making determinations of suitability for gaming employees and other individuals and entities, issuing licenses, acting as administrator of gaming revenues deposited into the Indian Gaming Special Distribution Fund and the trustee over the revenues deposited into the Gaming Revenue Sharing Trust Fund, and administering the provisions of the Gambling Control Act and the Tribal State Gaming Compacts.

The Bureau of Gambling Control within the DOJ is the state law enforcement authority with special jurisdiction over gambling activities within the State of California. The Bureau of Gambling Control is also the entity that receives applications and fees and conducts criminal background investigations and audits.

Bagley-Keene Act. When the Legislature enacted the Bagley-Keene Act of 1967 it essentially said that when a body sits down to develop its consensus, there needs to be a seat at the table reserved for the public. In doing so, the Legislature has provided the public with the ability to monitor and be part of the decision-making process. The Bagley-Keene Act explicitly mandates open meetings for California State agencies, boards, and commissions. It facilitates transparency of government activities and protects the rights of citizens to participate in state government deliberations. Therefore, absent a specific reason to keep the public out of meetings, the public should be allowed to monitor and participate in the decision-making process. Similarly, California’s Brown Act of 1953 protects citizen’s rights to open meetings at the local county government levels.

California Public Records Act (Act). The Act presumes that all records held by government are accessible to the public unless expressly made exempt from disclosure. It gives members of the public two main rights; the right to inspect records free of charge and the right to obtain a copy of records after paying for the direct costs of duplication or a statutory fee. Once the request is made, the agency must either produce the records in a reasonable amount of time, as specified, or justify its decision to withhold the record by showing that the record is exempt under an expressed provision of law or that the public interest in disclosure of the record is clearly outweighed by the public interest in nondisclosure. There are 30 general categories of documents or information that are exempt from disclosure, essentially due to the character of the information. The Act allows a member of the public to sue to enforce the law and provides that a prevailing plaintiff can recover attorney fees and costs of bringing the suit.

Prior/Related Legislation

SB 399 (Hall, 2015) would have required that a public record of every vote of the CGCC be posted on the CGCC’s Internet Web site no later than 48 hours after the vote is taken. (Gutted and amended in the Assembly)

SB 650 (Hall, 2015) clarifies that the CGCC shall keep a record pertaining to its regular and special meetings and a record of all applications for licenses under the Gambling Control Act open to public inspections during normal business hours. (Pending in Assembly Governmental Organization Committee)

AB 2720 (Ting, Chapter 510, Statutes of 2014) required a state body to publicly report any action taken and the vote or abstention on that action of each member present for the action.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

SUPPORT:

None received

OPPOSITION:

None received