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 Viejas Band of Kumeyaay Indians, executed on June 28, 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 Viejas Band of Kumeyaay Indians, executed on June 28, 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 requires a traffic officer on duty for the exclusive or main purpose of enforcing specified provisions of the Vehicle Code relating to accidents and accident reports and rules of the road to wear a full distinctive uniform, and if the officer while on duty uses a motor vehicle, requires the vehicle to be painted a distinctive color specified by the Commissioner of the California Highway Patrol.

This bill would delete the requirement that the motor vehicle be painted, but would continue to require the vehicle be a distinctive color.

 UNFINISHED BUSINESS  

Bill No: SB 404

Author:

:

Vote:

PRIOR VOTES NOT RELEVANT

ASSEMBLY FLOOR: 78-0, 8/15/16 - See last page for vote

[NOTE: On July 21, 2016, the Senate Governmental Organization Committee held an informational hearing on the tribal gaming compact entered into between the State of California and the Viejas Band of Kumeyaay Indians.]

SUBJECT:

SOURCE: Author

DIGEST: This bill ratifies the tribal-state gaming compact (Compact) entered into between the State of California and the Viejas Band of Kumeyaay Indians (hereafter “Tribe”) executed on June 28, 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 criminal and traffic based fines and instead add language pertaining to ratification of the Viejas 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 Viejas Band of Kumeyaay Indians executed on June 28, 2016. 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, as described in Appendix A of the Compact, in the County of San Diego.

The Tribe has agreed to contribute into the Special Distribution Fund (SDF) its pro rata share of the State’s regulatory costs which include programs that provide education, counseling and treatment for Californians affected by problem gambling. The Tribe has also agreed to contribute four and three quarter percent (4.75%) of its “gross gaming revenue” from the operation of up to 2,500 slot machines to 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 Compact provides for an increase in percentage payments to the RSTF or TNGF, as specified, if the Tribe operates between 2,501 to 3,500 slot machines.

Additionally, the Compact provides a framework for the sharing of gaming revenue with the County of San Diego and other local jurisdictions. Specifically, from its payments to the RSTF or the TNGF, the Tribe may take annual credits of up to sixty percent (60%) for infrastructure improvements and fire, law enforcement, public transit, education, tourism and other services including investments in renewable energy, water conservation or recycling projects and payments to support capital improvements or operating expenses for facilities that provide health care services to tribal members and other members of the local community.

Furthermore, 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) requires the Tribe to adopt a Tribal Labor Relations Ordinance, as specified; (d) preserves the provisions in the Tribe’s existing compact that address mitigation of off-reservation impacts of gaming related projects; and, (e) contains provisions to protect the health and safety of patrons, guests, and employees.

This Compact supersedes a 2014 amended compact [SB 1356 (De León, Chapter 314, Statutes of 2014)] between the Tribe and the State of California. The 2014 amended compact, among other things, converted the Tribe’s fixed revenue share payment to the state into a percentage-based payment in order to account for the impact on revenue caused by changing economic conditions and to enhance the economic development, long-term stability and self-sufficiency of the Tribe. The percentage-based payment structure was intended to ensure the Tribe remained the primary beneficiary of its gaming operation as required by federal law.

The 2014 amended compact superseded a 2004 amended compact [AB 687 (Nuñez, Chapter 91, Statutes of 2004)] between the Tribe and the State of California which replaced the Tribe’s initial compact signed in 1999 with Governor Gray Davis, who negotiated gambling agreements with more than 60 tribes. The 2004 amended compact allowed the Tribe to operate an unlimited number of Class III slot machines in exchange for payments to the state General Fund for machines added after ratification of the compact. Under the 1999 compact, the Tribe could not operate more than 2,000 gaming devices.

Key Components Of The Compact

Scope of Class III Gaming Authorized. The Tribe is authorized to operate up to 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. 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 in the chart 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).  This Compact requires the Tribe to pay to the State, on a pro rata basis, the costs the State incurs for the performance of all its duties under this Compact, as established by the monies appropriated in the annual Budget Act for the performance of their duties under the Class III Gaming Compacts each fiscal year for the California Gambling Control Commission (CGCC), the California Department of Justice, the Office of the Governor, the California Department of Public Health Programs, Office of Problem Gambling, the State Controller, the Department of Human Resources, and the Financial Information System for California, or any agency or agencies the State designates as a successor to them.  The Tribe’s pro rata share of the State’s costs in any given year this Compact is in effect shall be calculated using the following equation: “The maximum number of gaming devices operated in the gaming facility for the previous fiscal year as determined by the State Gaming Agency, divided by the maximum number of gaming devices operated by all federally recognized tribes in California pursuant to tribal-state Class-III gaming compacts during the previous fiscal year, multiplied by costs, equals the Tribe’s pro rata share.”

*It should be noted that the 2014 amended compact required the Tribe to provide the State a revenue contribution based upon the average number of gaming devices equal to a percentage of the “net win,” as defined, from such gaming devices according to the following schedule:

The 2014 amended compact also required that a portion of the Tribe’s quarterly revenue contribution to the State be allocated to the SDF as follows: (a) During years one and two, $5 million dollars; (b) During year three, $4 million dollars; (c) During year four, $3 million dollars; and, (d) During year five, $2 million dollars.

In addition, the 2014 amended compact provided that in each year of the compact, any amount of the Tribe's quarterly revenue contributions due to be paid to the SDF that is remaining after the Tribe’s payments are made and deposited into the SDF shall go to the General Fund.

Payments to the RSTF or the TNGF. This Compact requires the Tribe to pay to the State a quarterly revenue contribution, for deposit into the RSTF or the TNGF, which shall be based upon the average number of gaming devices in operation during such quarter, equal to a percentage of the “Gross Gaming Revenue” per device according to the following schedule:

“Gross Gaming Revenue” is defined as the win from gaming activities, which is the difference between gaming wins and losses before deducting costs and expenses or deducting incentives or adjusting for changes in progressive jackpot liability accruals. Generally, the difference between patron wagers and the payouts made on winning wagers.

*It should be noted that the 2014 amended compact required the Tribe to make annual payments of $2 million into the RSTF or the TNGF.

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

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

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

Additional 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 within three days of the play or operation of any game, including refusal to pay to a patron any alleged winnings from any gaming activities. If a patron is dissatisfied with the resolution, the Tribe shall inform the patron in writing within 15 days of the right to resolution of the dispute by the Tribal Gaming Agency. If dissatisfied with the resolution, the patron has the right to seek resolution in either the Viejas tribal Court or before an independent review board. The Tribal Gaming Agency shall conduct an appropriate investigation, provide to the patron a copy of its procedures concerning patron complaints, and render a decision in accordance with industry practice. The decision shall be issued within 60 days of the patron's request. Any party dissatisfied with the award of the Viejas Tribal Court or the independent review board may, at the party’s election, appeal to the Intertribal Court of Southern California Court of Appeals, provided that the party making the election must bear all costs and expenses associated with the appeal regardless of the outcome. The Tribe agrees to wave its sovereign immunity in connection with the jurisdiction of the Viejas Tribal Court, the independent review board or the Intertribal Court of Southern California, and in any suit in state or federal court to enforce or execute a judgment based upon the award of the tribal court, independent review board or appellate court.
• 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. In addition, requires the Tribe to expressly provide for waiver of the Tribe’s sovereign immunity and its right to assert sovereign immunity with respect to the resolution of claims in the Viejas Tribal Court, by the independent review board, and the Intertribal Court of Southern California Court of Appeals. Furthermore, the Compact provides that California tort law shall apply to specified claims if the Tribe fails to adopt a Tort Liability Ordinance.
• Environmental Protections. Requires the Tribe to prepare a Tribal Environmental Impact Report (TEIR) and negotiate mitigation of any off-reservation impacts, including an evaluation of energy consumption, prior to initiating the development of a project for a facility. The Compact provides procedures regarding the (1) Notice of Preparation of Draft TEIR, (2) Notice of Completion of Draft TEIR, and (3) Issuance of Final TEIR. The Tribe’s failure to prepare an adequate TEIR when required may warrant an injunction where appropriate. A completed TEIR must be filed with San Diego County, the Department of Justice, the CGCC, and the State Clearinghouse. Before commencement of a Project, and no later than the issuance of the final TEIR, the Tribe shall offer to commence negotiations with San Diego County to, amongst other things, provide for the timely mitigation of any significant effect on the off-reservation environment including provisions relating to compensation for law enforcement, fire protection, emergency medical services and any other public services to be provided by the County to the Tribe as a consequence of the Project.
• 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 may only commence after the Tribe has adopted an ordinance identical to the Tribal Labor Relations Ordinance (TRLO), referenced as Appendix C of the Compact, and the gaming activities may only continue as long as the Tribe maintains the ordinance. If the Tribe employs 250 or more persons in a tribal casino facility, then the provisions of the TLRO become effective.
• Workers’ Compensation. Provides that the Tribe agrees to participate in the State’s workers’ compensation program with respect to employees at the casino. All disputes arising from the workers’ compensation laws shall be heard by the State Workers’ Compensation Appeals Board pursuant to the California Labor Code. The Tribe acknowledges the jurisdiction of the Board in such manners. Furthermore, the Tribe agrees that it will participate in the state’s unemployment compensation program for providing benefits and unemployment compensation disability benefits to employees at the casino. The Tribe shall withhold all taxes due to the state, except for Tribal members living on the Tribe’s reservation, and forward such amounts to the state.
• Prohibitions Regarding Minors. Provides that the Tribe shall prohibit persons under the age of twenty-one (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 (ABC) Act.
• Tobacco Provisions. Provides that the Tribe agrees to provide a non-smoking area in the gaming facility and to utilize a ventilation system throughout the gaming facility that exhausts tobacco smoke to the extent reasonably feasible under state-of-the-art technology existing as of the date of the construction or significant renovation of the gaming facility, and further agrees not to offer or sell tobacco to anyone younger than the minimum age specified in state law to legally purchase tobacco products.
• Problem Gambling. Requires the gaming operation to establish a program, approved by the Tribal Gaming Agency, to mitigate pathological and problem gaming by implementing specified measures.
• Health and Safety Standards. Provides that the Tribe has agreed to adopt and comply with tribal health standards for food and beverage handling that are no less stringent than State public health standards. Also, the Tribe has agreed to comply with federal water quality and safe drinking water standards applicable in California.
• 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 California Building Code and the Public Safety Code applicable to the county in which the gaming facility is located.
• 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: (a) The Compact is ratified by statute in accordance with state law and (b) Notice of approval or constructive approval is published in the Federal Register. Once effective, this Compact shall be in full force and effect until December 31, 2041.
• 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.

Brief History Of The Viejas Band Of Kumeyaay Indians

The Viejas Band of Kumeyaay Indians, one of the remaining 12 bands of the Kumeyaay Indian Nation (Barona, Campo, Ewiiaapaayp, Inaja-Cosmit, Jamul, LaPosta, Manzanita, Mesa Grande, San Pasqual, Santa Ysabel, Sycuan and Viejas) is a 252-member federally recognized tribe located on a 1,600-acre reservation in the Viejas Valley, east of the community of Alpine in San Diego County, California. The Viejas Band has a "trust" relationship with the federal government, enforces federal laws and participates in issues pertinent to its land and people on a government-to-government basis. The Tribe notes that “membership in the Viejas Band of Kumeyaay Indians is determined by direct descent from the families forced from their original Capitan Grande Reservation, who contributed their share from the sale of their lands for the El Capitan Reservoir to purchase the current reservation in the Viejas Valley.”

According to information provided by the Tribe, the Viejas Band has experienced tremendous economic prosperity that has successfully helped increase access to health care, education and general welfare to its people and their children, who will carry on the Kumeyaay culture for years to come. Under the umbrella of Viejas Enterprises, the Tribe's properties include Viejas Casino & Resort; Viejas Outlet Center, a 37-acre shopping center; Alpine Springs Recreational Vehicle Park; and Ma-Tar-Awa Recreational Vehicle Park, the tribe's first business venture that opened in 1976. Through revenues brought in by the Tribe's business enterprises, “the Tribe has been able to reinvest millions of dollars back into its community, with 90 percent of dollars generated at Viejas Casino & Resort returning to the local and state economy.”

The Tribe’s casino has over 2,000 slot machines, up to 86 table games, numerous diverse dining options, a bingo operation, an off-track betting facility, lounge, concert venues and a poker room. The Tribe opened a five-story, $36 million hotel in March 2013 that is located on the east side of the casino with approximately 99 rooms and 29 suites, a pool with a patio area and cabanas, a business center, fitness room, and other amenities. In October of 2015, the Tribe opened a second luxury hotel tower with another 100 plus rooms and an additional 5 suites. Today, the expanded resort consists of 203 deluxe rooms and 34 VIP suites, state-of-the-art meeting spaces, two modern fitness centers, and a ballroom for hosting weddings and special events.

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

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: (a) grants for programs designed to address gambling addiction; (b) grants for the support of state and local government agencies impacted by tribal government gaming; (c) compensation for regulatory costs incurred by the California Gambling Control Commission (CGCC) and the Department of Justice (DOJ) in connection with the implementation and administration of compacts; (d) payment of shortfalls that may occur in the RSTF; (e) disbursements for the purpose of implementing the terms of tribal labor relations ordinances promulgated in accordance with the terms of the 1999 compacts; and, (f) any other purpose specified by law. (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.

Related/Prior Legislation

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

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

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

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

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

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

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

SUPPORT: (Verified 8/15/16)

California Labor Federation

Teamsters

UNITE HERE, AFL-CIO

Viejas Band of Kumeyaay Indians

OPPOSITION: (Verified 8/15/16)

None received

ASSEMBLY FLOOR: 78-0, 8/15/16

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, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Patterson, Quirk, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Rendon

NO VOTE RECORDED: Roger Hernández, Olsen

Prepared by:

8/16/16 12:49:20

**** END ****

SENATE THIRD READING

STR Bill Id:SB 404

Author:(De León)

As Amended Ver:August 11, 2016

2/3 vote. Urgency

SENATE VOTE: 36-0

SUMMARY: Ratifies a Tribal-State Gaming Compact (Compact) between the Viejas Band of Kumeyaay Indians (Tribe) and the State of California (State), executed on June 28, 2016. Specifically, this bill:

1. Ratifies the Compact entered into between the State of California and the Viejas Band of Kumeyaay Indians executed on June 28, 2016.
2. Supersedes the existing 2014 compact (SB 1356 (De León), Chapter 314, Statutes of 2014) between the Tribe and the State of California.
3. Authorizes the Tribe to operate a maximum of 3,500 slot machines at not more than two gaming facilities, and only on those Indian lands held in trust for the Tribe as of the execution date of this Compact, as described in Appendix A of this Compact. Currently, the Tribe is authorized to operate 4,500 gaming devices.
4. States the Tribe has agreed to pay the State its pro rata share of the costs the State incurs for the performance of its duties under the Compact as well as a graduated scale of payments (4.75% to 7%) equal to the percentage of the "Gross Gaming Revenue" generated per gaming device to the Revenue Sharing Trust Fund (RSTF) or the Tribal Nation Grant Fund (TNGF) to the benefit of tribes who do not offer gaming or that otherwise are not substantially benefiting from gaming operations in California.
5. Provides a framework for the sharing of gaming revenue with the County of San Diego and other local jurisdictions. Specifically, from its payments to the RSTF or the TNGF, the Tribe may take annual credits of up to 60% for infrastructure improvements and fire, law enforcement, public transit, education, tourism and other services including investments in renewable energy, water conservation or recycling projects and payments to support capital improvements or operating expenses for facilities that provide health care services to tribal members and other members of the local community.
6. 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.
7. States once effective (legislative ratification and federal approval required), this Compact shall be in full force and effect until December 31, 2041.
8. Contains an urgency clause, allowing this bill to take effect immediately upon enactment.

EXISTING LAW:

1. Provides, under the Indian Gaming Regulatory Act (IGRA), for the negotiation and conclusion of compacts between federally recognized Indian tribes and the State for the purpose of conducting Class III gaming activities on Indian lands within a State as a means of promoting tribal economic development, self-sufficiency, and strong tribal governments.
2. Authorizes expressly a number of tribal-state gaming compacts between the State of California and specified Indian tribes.
3. Authorizes the conduct of Class III gaming activities to the extent such activities are permitted by state law, a gaming compact has been concluded by a federally recognized tribe and the State, and the compact has been approved by the Secretary of the Interior.
4. Limits the operation of Class III gaming activities to Indian lands acquired on or before October 17, 1988. Provides for certain exceptions to conduct gaming activities on Indian lands acquired after October 17, 1988.
5. Defines Indian lands to mean all lands within the limits of any Indian reservation, and any lands title to which is either held in trust by the United States (U.S.) for the benefit of any Indian tribe, or individual, or held by any Indian tribe or individual subject to restriction by the U.S. against alienation and over which an Indian tribe exercises governmental power.
6. Requires the State to negotiate to conclude a compact in good faith with an Indian tribe having jurisdiction over the Indian lands upon which the Class III gaming activity is to be conducted. Provides the U.S. district courts with jurisdiction over any cause of action initiated by a tribal government alleging that the State failed to negotiate in good faith to conclude a compact. Prescribes the remedy, mediation supervised by the courts, if it is found that the State failed to negotiate in good faith to conclude a compact.
7. Authorizes the Governor, under the California Constitution, to negotiate and conclude compacts, subject to ratification by the Legislature.

FISCAL EFFECT: Unknown

COMMENTS:

Brief Overview of the Tribe: The Tribe, one of the remaining 12 bands of the Kumeyaay Indian Nation, is a federally recognized tribe located on a 1,600-acre reservation in the Viejas Valley, east of the community of Alpine in San Diego County, California. The Tribe has a "trust" relationship with the federal government, enforces federal laws and participates in issues pertinent to its land and people on a government-to-government basis.

According to information provided by the Tribe, the Tribe has experienced tremendous economic prosperity that has successfully helped increase access to health care, education and general welfare to its people and their children, who will carry on the Kumeyaay culture for years to come. Under the umbrella of Viejas Enterprises, the Tribe's properties include Viejas Casino & Resort; Viejas Outlet Center, a 37-acre shopping center; Alpine Springs Recreational Vehicle Park; and Ma-Tar-Awa Recreational Vehicle Park, the tribe's first business venture that opened in 1976. Through revenues brought in by the Tribe's business enterprises, "the Tribe has been able to reinvest millions of dollars back into its community, with 90% of dollars generated at Viejas Casino & Resort returning to the local and state economy."

The Tribe's casino has 2,000 slot machines, up to 86 table games, four restaurants, a deli, bingo, an off-track betting facility, lounge, concert venues and a poker room. The Tribe opened a 150-room hotel in March 2013. The five-story, $36 million hotel is located on the east side of the Viejas Casino. The hotel has 99 rooms and 29 suites; a pool and hot tub, with a patio area and cabanas; a business center; fitness room; and room service.

This is the fourth Compact between the State and Viejas. This Compact supersedes a 2014 amended compact (SB 1356 (De León, Chapter 314, Statutes of 2014) between the Tribe and the State. The 2014 amended compact, among other things, converted the Tribe's fixed revenue share payment to the state into a percentage-based payment in order to account for the impact on revenue caused by changing economic conditions and to enhance the economic development, long-term stability and self-sufficiency of the Tribe. The percentage-based payment structure was intended to ensure the Tribe remained the primary beneficiary of its gaming operation as required by federal law.

The 2014 amended compact superseded a 2004 amended compact (AB 687 (Nuñez), Chapter 91, Statutes of 2004) between the Tribe and the State which replaced the Tribe's initial compact signed in 1999 with Governor Gray Davis. The 2004 amended compact allowed the Tribe to operate an unlimited number of Class III slot machines in exchange for payments to the state General Fund for machines added after ratification of the compact. Under the 1999 compact, the Tribe could not operate more than 2,000 gaming devices.

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

The Tribe and the State agree that this Compact is designed to enhance the Tribe's economic development and self-sufficiency and to protect the health, safety and general welfare interests of the Tribe and its citizens, the surrounding community, and the California public, and to promote and secure long-term stability, mutual respect, and mutual benefits.

General Compact Provisions:

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 described.

Authorized Number of Gaming Devices: The Tribe is authorized to operate up to 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. It is not precluded from offering any form of Class II gambling.

The Tribe shall not engage in Class III Gaming that is not expressly authorized in the Compact. Under the current compact, the Tribe is limited to 4,500 Class III gaming devices that it can operate. This new Compact reduces the total number of gaming devices that the Tribe can operate by 1,000.

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

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

Revenue Sharing Trust Fund or Tribal Nation Grant Fund: The Compact provides that the Tribe shall pay to the State quarterly a revenue contribution, for deposit into the RSTF, which shall be based upon the average number of gaming devices in operation during such quarter, an amount equal to the percentage of the "Gross Gaming Revenue" generated per device according to the following schedule:

"Gross Gaming Revenue" means the win from gaming devices, which is the difference between gaming device wins and losses before deducting costs and expenses or deducting incentives or adjusting for changes in progressive jackpot liability accruals. Generally, the difference between patron wagers and the payouts made on winning wagers on gaming devices.

The "RSTF" is a fund created by the Legislature to "share" the benefits of casino gaming with non-gaming tribes and limited-gaming tribes (those with less than 350 machines). Such tribes are entitled to payments of $1.1 million per year from the RSTF. The "TNGF" was created by the Legislature to make discretionary distributions of funds to Non-Gaming Tribes and Limited-Gaming Tribes upon application of such tribes for purposes related to effective self-governance, self-determined community, and economic development. As the RSTF is fairly rigid in its distribution formulas, the TNGF was created to give more flexibility in funding tribal projects that might not be fundable by the RSTF.

Credits Applied to the RSTF or the TNGF: From its payments to the RSTF and TNGF, the Tribe may take credits for up to 60% thereof for the following purposes:

1. Non-gaming economic development investments that benefit the State and the Tribe because of their cultural, social or environmental value and that provide economic diversification for the Tribe;
2. Investments by the Tribe for water treatment or conservation projects and recycling projects or payments to any water districts towards infrastructure projects in furtherance of making potable water and sewer services provided by such water districts available to tribal lands and the local community;
3. Capital improvements and operating expenses for facilities that provide health care or assisted living services to tribal members, Indians and non-Indians;
4. Payments to San Diego County and other local jurisdictions for fire protection, law enforcement, public transit, education, tourism and other services not otherwise required as mitigation for significant off-reservation impacts of the gaming operation in the required intergovernmental agreement. These payments are subject to approval by the local jurisdiction. At least 20% of the annual credits must be utilized for such purposes;
5. General welfare benefits provided by the Tribe for health-care, cultural or vocational purposes to non-tribal members and Native Americans in the community;
6. Payments made by the Tribe for the cost of recycling programs, and any improvements incorporating recycling technology, that, in part, serve the gaming facility, or off-reservation needs of San Diego County residents; and
7. Renewable energy projects that serve the gaming facility and include facilities with charging stations for electric or other zero-emission vehicles that are available to patrons and employees of the gaming facility.

This Compact specifies that, in no event shall the State's General Fund be obligated to make up any shortfall in the RSTF or the TNGF or to pay any unpaid claims connected therewith.

The 2014 amended compact required the Tribe to make annual payments of $2 million into the RSTF or the TNGF.

Indian Gaming Special Distribution Fund (SDF): Requires the Tribe cover its share of the State's regulatory costs for Indian gaming. As such, the Tribe will pay its pro-rata share into the SDF to fund the costs incurred by the State in the performance of its regulatory duties, as defined.

The 2014 amended compact required the Tribe to provide the State a revenue contribution based upon the average number of gaming devices equal to a percentage of the "Net win," as defined, from such gaming devices according to the following schedule:

The 2014 amended compact also required that a portion of the Tribe's quarterly revenue contribution to the State be allocated to the SDF as follows: 1) During years one and two, $5 million dollars; 2) During year three, $4 million dollars; 3) During year four, $3 million dollars; and, 4) During year five, $2 million dollars.

In addition, the 2014 amended compact provided that in each year of the compact, any amount of the Tribe's quarterly revenue contributions due to be paid to the SDF that is remaining after the Tribe's payments are made and deposited into the SDF shall go to the General Fund.

Licensing and Regulation: Provides that a copy of the gaming ordinance and all of its rules, regulations, procedures, specifications, ordinances, or standards applicable to the gaming activities and gaming operation shall be provided to the California Gambling Control Commission (CGCC) and Bureau upon request. Notice shall be given to the CGCC or Bureau of any change or amendments to any of the, rules, regulations, procedures, specifications, ordinances, or standards applicable to the gaming activities and gaming operation, no later than 30 days after the change or amendment. Furthermore, the Compact stipulates that the following documents shall be made available in hard copy or on the casino's Web site: the gaming ordinance; the rules of each Class III game operated by the Tribe (if they are not displayed on the gaming device or the table); tribal law, with respect to the gaming activities; the tort ordinance; the employment discrimination complaint ordinance; Tribal regulations concerning patron; the National Indian Gaming Commission (NIGC) minimum internal control standards; and this Compact. Additionally, the Compact compels all persons connected with the gaming operation or facility in any way, who are required to be licensed or to submit to a background investigation under IGRA, must be licensed by the Tribal Gaming Agency and cannot have had any determination of suitability denied or revoked by the CGCC. This includes all gaming employees, gaming resource suppliers, financial sources, and any other person having a significant influence over the gaming operation.

Minimum Internal Controls Standards (MICS): Requires the Tribe to conduct its gaming activities pursuant to an internal control system that implements MICS that are no less stringent than specified MICS of the NIGC. It requires gaming to operate pursuant to a written internal control system that reasonably assures that assets are safeguarded and accountability over assets is maintained, liabilities are properly recorded and contingent liabilities are properly disclosed, financial records are accurate and reliable, transactions are performed in accordance with the Tribe's authorization. The Tribe is required to provide to the CGCC, upon written request, a copy of the independent certified public accountant agreed-upon procedures report conducted annually for submission to the NIGC pursuant to federal law. This report verifies that the gaming operation is in compliance with the NIGC's minimum internal control standards.

Slot Machine Testing: Requires that the software used for the play on a gaming device to be tested, approved and certified by an independent or State governmental gaming test laboratory. Slot machines are required to be tested by a gaming test laboratory and the Tribe must ensure that it is operating in accordance with the manufacturer's specifications. The Tribe shall prepare and maintain records of its compliance machine testing provisions of this Compact while any gaming device is on the gaming floor and for a period of at least one year after it is removed from the gaming floor. Such records shall be made available for inspection by the CGCC upon request.

Inspections: Allows CGCC to inspect all gaming devices in operation at the casino, including all the software, hardware, and associated equipment and systems that support the operation of the gaming devices, on a random basis four times annually to confirm that they operate and play properly.

Independent Auditor: Requires the Tribe to provide the CGCC results from an independent auditor of a compliance audit with the requirements concerning the manufacturer or distributor and the slot machine testing.

Patron Disputes: The Tribe must attempt to resolve patron disputes filed within three days of the play or operation of a Class III game, including refusal to pay any alleged winnings. If a patron is dissatisfied with the resolution, the Tribe shall inform the patron in writing with 15 days of the right to resolution of the dispute by the Tribal Gaming Agency. If dissatisfied with the resolution, the patron has the right to seek resolution by the tribal court or an independent review board. The Tribal Gaming Agency shall conduct an appropriate investigation, provide to the patron a copy of its procedures concerning patron complaints, and render a decision in accordance with industry practice. The decision shall be issued within 60 days of the patron's request. Any party dissatisfied with the award of the tribal court or tribal claims commission may, at the party's election, appeal to the Intertribal Court of Southern California Court of Appeals. However, the party seeking appeal must bear all costs and expenses associated with the appeal regardless of the outcome. The Tribe agrees to waive its sovereign immunity in order to be compelled in federal or State court to abide by the resolution of arbitration.

Tribal Environmental Impact Report (TEIR): The Tribe is required to prepare a "Tribal Environmental Impact Report" (TEIR) to measure off-reservation environmental impacts including an evaluation of energy consumption prior to initiating the development of a project for a facility. A completed TEIR shall be filed with San Diego County, the Department of Justice, and the State Clearinghouse. Before the commencement of a Project, and no later than the issuance of the final TEIR, the Tribe shall offer to commence negotiations with San Diego County to, amongst other things, provide for the timely mitigation of any significant effect on the off-reservation environment including compensation for law enforcement, fire protection, emergency medical services and any other public services to be provided by the county as a consequence of the project.

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

Labor Relations: Provides that the gaming activities authorized by this Compact may only commence after the Tribe has adopted an ordinance identical to the Tribal Labor Relations Ordinance (TLRO) provided for in Appendix C of the Compact, and the gaming activities may only continue as long as the Tribe maintains the ordinance. If the Tribe employs 250 or more persons in a tribal casino facility, then the provisions of the TLRO become effective. The TLRO provides for a secret ballot election.

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

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

The labor relations provisions contained within this new Compact are consistent with the more recent compacts negotiated, executed, and ratified.

Building Codes and Fire Safety: Requires facilities to meet or exceed the California Building Code and the Public Safety Code applicable to San Diego County. The Tribe must submit to fire safety inspections by the State, and to rectify deficiencies, lest be subject to court order prohibiting occupancy of the portion of the gaming facility with the deficiencies.

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

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

Tobacco: Requires the Tribe to provide a non-smoking area in the Gaming Facility and not to offer or sell tobacco to anyone that is under the minimum years of age authorized by the State to purchase tobacco. It requires the Tribe to utilize a ventilation system throughout the gaming facility that exhausts tobacco smoke and provide for smoke-free areas of the casino.

Alcoholic Beverages: Provides that the purchase, sale, and service of alcoholic beverages shall be subject to the California Alcoholic Beverage Control Act.

Prohibition Regarding Minors: 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.

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

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

Additional Background Information:

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

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

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

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 TNGF 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 from gaming operations in the state.

Related legislation: SB 1426 (Hall) of the current legislative session. Provides for the ratification of a new Tribal-State gaming compact between the State and the Yocha Dehe Wintun Nation executed on August 4, 2016.

SB 187 (Hall) of the current legislative session. Provides for the ratification of a new Tribal-State gaming compact between the State and the Jamul Indian Village executed on August 4, 2016.

AB 291 (Atkins) of the current legislative session. Provides for the ratification of a new Tribal-State gaming compact between the State and the Barona Band of Mission Indians executed on June 22, 2016.

AB 629 (Gonzalez) of the current legislative session. Provides for the ratification of a new Tribal-State gaming compact between the State and the Pala Band of Mission Indians executed on May 6, 2016.

AB 1282 (Gray) of the current legislative session. Provides for the ratification of a new Tribal-State gaming compact between the State and the Vista Rancheria of Me-Wuk Indians executed on June 28, 2016.

AB 2358 (Gonzalez) of the current legislative session. Provides for the ratification of a new Tribal-State gaming compact between the State and the Pechanga Band of Luiseno Indians executed on August 4, 2016.

AB 1767 (Bigelow) of the current legislative session. Provides for the ratification of the First Amendment to the Tribal-State Gaming Compact between the State and the Jackson Rancheria Band of Miwuk Indians.

AB 1977 (Wood) of the current legislative session. Provides for the ratification of amendments to the Tribal-State gaming compact between the State and the Yurok Tribe executed on August 4, 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. Also, provided for the issuance of bonds in an amount not to exceed $1.5 billion by the California Infrastructure and Economic Development Bank and required the net proceeds of the sale of the compact assets to be deposited in the Traffic Congestion Relief Fund and the Transportation Deferred Investment Fund.

SB 930 (Ducheny), 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: 0003946

SENATE THIRD READING

STR Bill Id:SB 404

Author:(De León)

As Amended Ver:September 2, 2015

Majority vote

SENATE VOTE: Vote not relevant

SUMMARY: Ratifies a Tribal-State Gaming Compact (Compact) between the Viejas Band of Kumeyaay Indians (Tribe) and the State of California (State), executed on June 28, 2016. Specifically, this bill:

1. Ratifies the Compact entered into between the State of California and the Viejas Band of Kumeyaay Indians executed on June 28, 2016.
2. Supersedes the existing 2014 compact (SB 1356 (De León), Chapter 314, Statutes of 2014) between the Tribe and the State of California.
3. Authorizes the Tribe to operate a maximum of 3,500 slot machines at not more than two gaming facilities, and only on those Indian lands held in trust for the Tribe as of the execution date of this Compact, as described in Appendix A of this Compact. Currently, the Tribe is authorized to operate 4,500 gaming devices.
4. States the Tribe has agreed to pay the State its pro rata share of the costs the State incurs for the performance of its duties under the Compact as well as a graduated scale of payments (4.75% to 7%) equal to the percentage of the "Gross Gaming Revenue" generated per gaming device to the Revenue Sharing Trust Fund (RSTF) or the Tribal Nation Grant Fund (TNGF) to the benefit of tribes who do not offer gaming or that otherwise are not substantially benefiting from gaming operations in California.
5. Provides a framework for the sharing of gaming revenue with the County of San Diego and other local jurisdictions. Specifically, from its payments to the RSTF or the TNGF, the Tribe may take annual credits of up to 60% for infrastructure improvements and fire, law enforcement, public transit, education, tourism and other services including investments in renewable energy, water conservation or recycling projects and payments to support capital improvements or operating expenses for facilities that provide health care services to tribal members and other members of the local community.
6. 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.
7. States once effective (legislative ratification and federal approval required), this Compact shall be in full force and effect until December 31, 2041.
8. Contains an urgency clause, allowing this bill to take effect immediately upon enactment.

EXISTING LAW:

1. Provides, under the Indian Gaming Regulatory Act (IGRA), for the negotiation and conclusion of compacts between federally recognized Indian tribes and the State for the purpose of conducting Class III gaming activities on Indian lands within a State as a means of promoting tribal economic development, self-sufficiency, and strong tribal governments.
2. Authorizes expressly a number of tribal-state gaming compacts between the State of California and specified Indian tribes.
3. Authorizes the conduct of Class III gaming activities to the extent such activities are permitted by state law, a gaming compact has been concluded by a federally recognized tribe and the State, and the compact has been approved by the Secretary of the Interior.
4. Limits the operation of Class III gaming activities to Indian lands acquired on or before October 17, 1988. Provides for certain exceptions to conduct gaming activities on Indian lands acquired after October 17, 1988.
5. Defines Indian lands to mean all lands within the limits of any Indian reservation, and any lands title to which is either held in trust by the United States (U.S.) for the benefit of any Indian tribe, or individual, or held by any Indian tribe or individual subject to restriction by the U.S. against alienation and over which an Indian tribe exercises governmental power.
6. Requires the State to negotiate to conclude a compact in good faith with an Indian tribe having jurisdiction over the Indian lands upon which the Class III gaming activity is to be conducted. Provides the U.S. district courts with jurisdiction over any cause of action initiated by a tribal government alleging that the State failed to negotiate in good faith to conclude a compact. Prescribes the remedy, mediation supervised by the courts, if it is found that the State failed to negotiate in good faith to conclude a compact.
7. Authorizes the Governor, under the California Constitution, to negotiate and conclude compacts, subject to ratification by the Legislature.

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

COMMENTS:

Brief Overview of the Tribe: The Tribe, one of the remaining 12 bands of the Kumeyaay Indian Nation, is a federally recognized tribe located on a 1,600-acre reservation in the Viejas Valley, east of the community of Alpine in San Diego County, California. The Tribe has a "trust" relationship with the federal government, enforces federal laws and participates in issues pertinent to its land and people on a government-to-government basis.

According to information provided by the Tribe, the Tribe has experienced tremendous economic prosperity that has successfully helped increase access to health care, education and general welfare to its people and their children, who will carry on the Kumeyaay culture for years to come. Under the umbrella of Viejas Enterprises, the Tribe's properties include Viejas Casino & Resort; Viejas Outlet Center, a 37-acre shopping center; Alpine Springs Recreational Vehicle Park; and Ma-Tar-Awa Recreational Vehicle Park, the tribe's first business venture that opened in 1976. Through revenues brought in by the Tribe's business enterprises, "the Tribe has been able to reinvest millions of dollars back into its community, with 90% of dollars generated at Viejas Casino & Resort returning to the local and state economy."

The Tribe's casino has 2,000 slot machines, up to 86 table games, four restaurants, a deli, bingo, an off-track betting facility, lounge, concert venues and a poker room. The Tribe opened a 150-room hotel in March 2013. The five-story, $36 million hotel is located on the east side of the Viejas Casino. The hotel has 99 rooms and 29 suites; a pool and hot tub, with a patio area and cabanas; a business center; fitness room; and room service.

This is the fourth Compact between the State and Viejas. This Compact supersedes a 2014 amended compact (SB 1356 (De León)) between the Tribe and the State. The 2014 amended compact, among other things, converted the Tribe's fixed revenue share payment to the state into a percentage-based payment in order to account for the impact on revenue caused by changing economic conditions and to enhance the economic development, long-term stability and self-sufficiency of the Tribe. The percentage-based payment structure was intended to ensure the Tribe remained the primary beneficiary of its gaming operation as required by federal law.

The 2014 amended compact superseded a 2004 amended compact (AB 687 (Nuñez), Chapter 91, Statutes of 2004) between the Tribe and the State which replaced the Tribe's initial compact signed in 1999 with Governor Gray Davis. The 2004 amended compact allowed the Tribe to operate an unlimited number of Class III slot machines in exchange for payments to the state General Fund for machines added after ratification of the compact. Under the 1999 compact, the Tribe could not operate more than 2,000 gaming devices.

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

The Tribe and the State agree that this Compact is designed to enhance the Tribe's economic development and self-sufficiency and to protect the health, safety and general welfare interests of the Tribe and its citizens, the surrounding community, and the California public, and to promote and secure long-term stability, mutual respect, and mutual benefits.

General Compact Provisions:

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 described.

Authorized Number of Gaming Devices: The Tribe is authorized to operate up to 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. It is not precluded from offering any form of Class II gambling.

The Tribe shall not engage in Class III Gaming that is not expressly authorized in the Compact. Under the current compact, the Tribe is limited to 4,500 Class III gaming devices that it can operate. This new Compact reduces the total number of gaming devices that the Tribe can operate by 1,000.

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

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

Revenue Sharing Trust Fund or Tribal Nation Grant Fund: The Compact provides that the Tribe shall pay to the State quarterly a revenue contribution, for deposit into the RSTF, which shall be based upon the average number of gaming devices in operation during such quarter, an amount equal to the percentage of the "Gross Gaming Revenue" generated per device according to the following schedule:

"Gross Gaming Revenue" means the win from gaming devices, which is the difference between gaming device wins and losses before deducting costs and expenses or deducting incentives or adjusting for changes in progressive jackpot liability accruals. Generally, the difference between patron wagers and the payouts made on winning wagers on gaming devices.

The "RSTF" is a fund created by the Legislature to "share" the benefits of casino gaming with non-gaming tribes and limited-gaming tribes (those with less than 350 machines). Such tribes are entitled to payments of $1.1 million per year from the RSTF. The "TNGF" was created by the Legislature to make discretionary distributions of funds to Non-Gaming Tribes and Limited-Gaming Tribes upon application of such tribes for purposes related to effective self-governance, self-determined community, and economic development. As the RSTF is fairly rigid in its distribution formulas, the TNGF was created to give more flexibility in funding tribal projects that might not be fundable by the RSTF.

Credits Applied to the RSTF or the TNGF: From its payments to the RSTF and TNGF, the Tribe may take credits for up to 60% thereof for the following purposes:

1. Non-gaming economic development investments that benefit the State and the Tribe because of their cultural, social or environmental value and that provide economic diversification for the Tribe:
2. Investments by the Tribe for water treatment or conservation projects and recycling projects or payments to any water districts towards infrastructure projects in furtherance of making potable water and sewer services provided by such water districts available to tribal lands and the local community;
3. Capital improvements and operating expenses for facilities that provide health care or assisted living services to tribal members, Indians and non-Indians;
4. Payments to San Diego County and other local jurisdictions for fire protection, law enforcement, public transit, education, tourism and other services not otherwise required as mitigation for significant off-reservation impacts of the gaming operation in the required intergovernmental agreement. These payments are subject to approval by the local jurisdiction. At least 20% of the annual credits must be utilized for such purposes;
5. General welfare benefits provided by the Tribe for health-care, cultural or vocational purposes to non-tribal members and Native Americans in the community;
6. Payments made by the Tribe for the cost of recycling programs, and any improvements incorporating recycling technology, that, in part, serve the gaming facility, or off-reservation needs of San Diego County residents; and
7. Renewable energy projects that serve the gaming facility and include facilities with charging stations for electric or other zero-emission vehicles that are available to patrons and employees of the gaming facility.

This Compact specifies that, in no event shall the State's General Fund be obligated to make up any shortfall in the RSTF or the TNGF or to pay any unpaid claims connected therewith.

The 2014 amended compact required the Tribe to make annual payments of $2 million into the RSTF or the TNGF.

Indian Gaming Special Distribution Fund (SDF): Requires the Tribe cover its share of the State's regulatory costs for Indian gaming. As such, the Tribe will pay its pro-rata share into the SDF to fund the costs incurred by the State in the performance of its regulatory duties, as defined.

The 2014 amended compact required the Tribe to provide the State a revenue contribution based upon the average number of gaming devices equal to a percentage of the "Net win," as defined, from such gaming devices according to the following schedule:

The 2014 amended compact also required that a portion of the Tribe's quarterly revenue contribution to the State be allocated to the SDF as follows: 1) During years one and two, $5 million dollars; 2) During year three, $4 million dollars; 3) During year four, $3 million dollars; and, 4) During year five, $2 million dollars.

In addition, the 2014 amended compact provided that in each year of the compact, any amount of the Tribe's quarterly revenue contributions due to be paid to the SDF that is remaining after the Tribe's payments are made and deposited into the SDF shall go to the General Fund.

Licensing and Regulation: Provides that a copy of the gaming ordinance and all of its rules, regulations, procedures, specifications, ordinances, or standards applicable to the gaming activities and gaming operation shall be provided to the California Gambling Control Commission (CGCC) and Bureau upon request. Notice shall be given to the CGCC or Bureau of any change or amendments to any of the, rules, regulations, procedures, specifications, ordinances, or standards applicable to the gaming activities and gaming operation, no later than 30 days after the change or amendment. Furthermore, the Compact stipulates that the following documents shall be made available in hard copy or on the casino's Web site: the gaming ordinance; the rules of each Class III game operated by the Tribe (if they are not displayed on the gaming device or the table); tribal law, with respect to the gaming activities; the tort ordinance; the employment discrimination complaint ordinance; Tribal regulations concerning patron; the NIGC minimum internal control standards; and this Compact. Additionally, the Compact compels all persons connected with the gaming operation or facility in any way, who are required to be licensed or to submit to a background investigation under IGRA, must be licensed by the Tribal Gaming Agency and cannot have had any determination of suitability denied or revoked by the CGCC. This includes all gaming employees, gaming resource suppliers, financial sources, and any other person having a significant influence over the gaming operation.

Minimum Internal Controls Standards (MICS): Requires the Tribe to conduct its gaming activities pursuant to an internal control system that implements MICS that are no less stringent than specified MICS of the National Indian Gaming Commission (NIGC). It requires gaming to operate pursuant to a written internal control system that reasonably assures that assets are safeguarded and accountability over assets is maintained, liabilities are properly recorded and contingent liabilities are properly disclosed, financial records are accurate and reliable, transactions are performed in accordance with the Tribe's authorization. The Tribe is required to provide to the CGCC, upon written request, a copy of the independent certified public accountant agreed-upon procedures report conducted annually for submission to the NIGC pursuant to federal law. This report verifies that the gaming operation is in compliance with the NIGC's minimum internal control standards.

Slot Machine Testing: Requires that the software used for the play on a gaming device to be tested, approved and certified by an independent or State governmental gaming test laboratory. Slot machines are required to be tested by a gaming test laboratory and the Tribe must ensure that it is operating in accordance with the manufacturer's specifications. The Tribe shall prepare and maintain records of its compliance machine testing provisions of this Compact while any gaming device is on the gaming floor and for a period of at least one year after it is removed from the gaming floor. Such records shall be made available for inspection by the CGCC upon request.

Inspections: Allows CGCC to inspect all gaming devices in operation at the casino, including all the software, hardware, and associated equipment and systems that support the operation of the gaming devices, on a random basis four times annually to confirm that they operate and play properly.

Independent Auditor: Requires the Tribe to provide the CGCC results from an independent auditor of a compliance audit with the requirements concerning the manufacturer or distributor and the slot machine testing.

Patron Disputes: The Tribe must attempt to resolve patron disputes filed within three days of the play or operation of a Class III game, including refusal to pay any alleged winnings. If a patron is dissatisfied with the resolution, the Tribe shall inform the patron in writing with 15 days of the right to resolution of the dispute by the Tribal Gaming Agency. If dissatisfied with the resolution, the patron has the right to seek resolution by the tribal court or an independent review board. The Tribal Gaming Agency shall conduct an appropriate investigation, provide to the patron a copy of its procedures concerning patron complaints, and render a decision in accordance with industry practice. The decision shall be issued within 60 days of the patron's request. Any party dissatisfied with the award of the tribal court or tribal claims commission may, at the party's election, appeal to the Intertribal Court of Southern California Court of Appeals. However, the party seeking appeal must bear all costs and expenses associated with the appeal regardless of the outcome. The Tribe agrees to wave its sovereign immunity in order to be compelled in federal or State court to abide by the resolution of arbitration.

Tribal Environmental Impact Report (TEIR): The Tribe is required to prepare a "TEIR" to measure off-reservation environmental impacts including an evaluation of energy consumption prior to initiating the development of a project for a facility. A completed TEIR shall be filed with San Diego County, the Department of Justice, and the State Clearinghouse. Before the commencement of a Project, and no later than the issuance of the final TEIR, the Tribe shall offer to commence negotiations with San Diego County to, amongst other things, provide for the timely mitigation of any significant effect on the off-reservation environment including compensation for law enforcement, fire protection, emergency medical services and any other public services to be provided by the county as a consequence of the project.

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

Labor Relations: Provides that the gaming activities authorized by this Compact may only commence after the Tribe has adopted an ordinance identical to the Tribal Labor Relations Ordinance (TLRO) provided for in Appendix C of the Compact, and the gaming activities may only continue as long as the Tribe maintains the ordinance. If the Tribe employs 250 or more persons in a tribal casino facility, then the provisions of the TLRO become effective. The TLRO provides for a secret ballot election.

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

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

The labor relations provisions contained within this new Compact are consistent with the more recent compacts negotiated, executed, and ratified.

Building Codes and Fire Safety: Requires facilities to meet or exceed the California Building Code and the Public Safety Code applicable to San Diego County. The Tribe must submit to fire safety inspections by the State, and to rectify deficiencies, lest be subject to court order prohibiting occupancy of the portion of the gaming facility with the deficiencies.

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

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

Tobacco: Requires the Tribe to provide a non-smoking area in the Gaming Facility and not to offer or sell tobacco to anyone that is under the minimum years of age authorized by the State to purchase tobacco. It requires the Tribe to utilize a ventilation system throughout the gaming facility that exhausts tobacco smoke and provide for smoke-free areas of the casino.

Alcoholic Beverages: Provides that the purchase, sale, and service of alcoholic beverages shall be subject to the California Alcoholic Beverage Control Act.

Prohibition Regarding Minors: 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.

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

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

Additional Background Information:

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

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

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

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 Department of Justice (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 TNGF 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 from gaming operations in the state.

Related legislation: SB 1426 (Hall) of the current legislative session. Provides for the ratification of a new Tribal-State gaming compact between the State and the Yocha Dehe Wintun Nation executed on August 4, 2016.

SB 187 (Hall) of the current legislative session. Provides for the ratification of a new Tribal-State gaming compact between the State and the Jamul Indian Village executed on August 4, 2016.

AB 291 (Atkins) of the current legislative session. Provides for the ratification of a new Tribal-State gaming compact between the State and the Barona Band of Mission Indians executed on June 22, 2016.

AB 629 (Gonzalez) of the current legislative session. Provides for the ratification of a new Tribal-State gaming compact between the State and the Pala Band of Mission Indians executed on May 6, 2016.

AB 1282 (Gray) of the current legislative session. Provides for the ratification of a new Tribal-State gaming compact between the State and the Vista Rancheria of Me-Wuk Indians executed on June 28, 2016.

AB 2358 (Gonzalez) of the current legislative session. Provides for the ratification of a new Tribal-State gaming compact between the State and the Pechanga Band of Luiseno Indians executed on August 4, 2016.

AB 1767 (Bigelow) of the current legislative session. Provides for the ratification of the First Amendment to the Tribal-State Gaming Compact between the State and the Jackson Rancheria Band of Miwuk Indians.

AB 1977 (Wood) of the current legislative session. Provides for the ratification of amendments to the Tribal-State gaming compact between the State and the Yurok Tribe executed on August 4, 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. Also, provided for the issuance of bonds in an amount not to exceed $1.5 billion by the California Infrastructure and Economic Development Bank and required the net proceeds of the sale of the compact assets to be deposited in the Traffic Congestion Relief Fund and the Transportation Deferred Investment Fund.

SB 930 (Ducheny), 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: 0003915

SENATE THIRD READING

STR Bill Id:SB 404

Author:(De León)

As Introduced Ver:February 25, 2015

Majority vote

SENATE VOTE: 36-0

SUMMARY: Deletes references to how color is applied to California Highway Patrol (CHP) vehicles thereby allowing for the use of alternative technologies such as vinyl wrapping. Specifically, this bill:

1. Deletes the requirement that vehicles used to respond to accidents or enforce rules of the road be "painted."

2. Makes related, clarifying changes.

EXISTING LAW:

1. Requires the CHP officers, when responding to a traffic incidents or enforcing rules of the road to wear a distinctive uniform.

2. Requires CHP vehicles used to respond to a traffic incidents or while enforcing rules of the road be painted a distinctive color specified by the commissioner.

FISCAL EFFECT: None

COMMENTS: Relatively new technology on the market allows vehicles to be wrapped in large sheets of vinyl as an alternative to painting them with traditional polyurethane paint. This technique is commonly used on busses and other large vehicles to display advertisements. In the case of law enforcement patrol cars, this technology is frequently used by automakers to provide a patrol car's distinctive color and mark.

The author points out that because existing law specifically calls for patrol cars to "painted" the use of vinyl wrapping, in lieu of paint, is precluded. The author has cited cases where law enforcement agencies have had to reject vehicle wrapping offered by auto manufacturers and instead incur the extra cost of using traditional "painting" methods to remain in compliance with existing law.

To address this problem, the author has introduced this bill which would delete the specific reference to "painting" patrol cars, leaving the requirement for patrol cars to be bear distinctive colors and marking. This minor change will allow the use of less costly, alternative methods to apply the distinctive colors and marking to law enforcement vehicles. This bill is a cost saving measure that allows for the use of modern "painting" technologies meanwhile saving taxpayers money.

Analysis Prepared by: Victoria Alvarez / TRANS. / (916) 319-2093 FN: 0001128

Date of Hearing: June 29, 2015

ASSEMBLY COMMITTEE ON TRANSPORTATION

Jim Frazier, Chair

SBPCA Bill Id:SB 404

Author:(De León) – As Introduced Ver:February 25, 2015

SENATE VOTE: 36-0

SUBJECT: Vehicles: traffic officers

SUMMARY: Deletes references to how color is applied to California Highway Patrol (CHP) vehicles thereby allowing for the use of alternative technologies such as vinyl wrapping. Specifically, this bill:

1. Deletes the requirement that vehicles used to respond to accidents or enforce rules of the road be "painted."

2. Makes related, clarifying changes.

EXISTING LAW:

1. Requires the CHP officers, when responding to a traffic incidents or enforcing rules of the road to wear a distinctive uniform.

2. Requires CHP vehicles used to respond to a traffic incidents or while enforcing rules of the road be painted a distinctive color specified by the commissioner.

FISCAL EFFECT: Unknown

COMMENTS: Relatively new technology on the market allows vehicles to be wrapped in large sheets of vinyl as an alternative to painting them with traditional polyurethane paint. This technique is commonly used on busses and other large vehicles to display advertisements. In the case of law enforcement patrol cars, this technology is frequently used by automakers to provide a patrol car's distinctive color and mark.

The author points out that because existing law specifically calls for patrol cars to "painted" the use of vinyl wrapping, in lieu of paint, is precluded. The author has cited cases where law enforcement agencies have had to reject vehicle wrapping offered by auto manufacturers and instead incur the extra cost of using traditional "painting" methods to remain in compliance with existing law.

To address this problem, the author has introduced SB 404 which would delete the specific reference to "painting" patrol cars, leaving the requirement for patrol cars to be bear distinctive colors and marking. This minor change will allow the use of less costly, alternative methods to apply the distinctive colors and marking to law enforcement vehicles. SB 404 is a cost saving measure that allows for the use of modern "painting" technologies meanwhile saving taxpayers money.

REGISTERED SUPPORT / OPPOSITION:

Support

California Police Chiefs Association

California State Sheriffs' Association

Opposition

None on file

Analysis Prepared by: Victoria Alvarez / TRANS. / (916) 319-2093

 CONSENT  

Bill No: SB 404

Author: De León (D)

Introduced: 2/25/15

Vote: 21

SENATE TRANS. & HOUSING COMMITTEE: 9-0, 5/5/15

AYES: Beall, Allen, Bates, Galgiani, Leyva, McGuire, Mendoza, Roth, Wieckowski

NO VOTE RECORDED: Cannella, Gaines

SUBJECT: Vehicles: traffic officers

SOURCE: Author

DIGEST: This bill deletes the requirement that law enforcement vehicles be painted, while retaining the requirement that those vehicles be a distinctive color.

ANALYSIS: Existing law requires that motor vehicles used for the primary purpose of traffic law enforcement be painted in distinctive colors, as determined by the Commissioner of the California Highway Patrol.

This bill deletes the reference to “painted,” while retaining the requirement that those vehicles be a distinctive color.

Comments

A relatively new way to change the appearance of vehicles is to wrap them in colored or printed vinyl. These films are attached with an adhesive and have a life of several years. Commercial vehicles and buses can often be seen with messages, art, or logos that cover the vehicle from end to end. This same technique can also be used to change the color of vehicles.

The author believes that wrapping a vehicle can be less expensive than painting. By amending the Vehicle Code to eliminate the requirement that law enforcement vehicles be painted, while still retaining the requirement that they be of a distinctive color, the author seeks to create the flexibility for law enforcement departments to reduce the cost of creating their distinctive looks by using vinyl wraps or any other technology that achieves the same effect, a technology-neutral approach.

Supporters note that some automakers have started to ship vehicles to law enforcement agencies using the vinyl wraps. However, some law enforcement agencies have incurred the extra expense to paint the vehicle because of California’s law requiring paint. Under this bill, such painting will be unnecessary.

According to the author, the cost to wrap a car is $305-$840; the cost to paint is $700-$900.

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

SUPPORT: (Verified 5/6/15)

California Police Chiefs Association

California State Sheriffs’ Association

OPPOSITION: (Verified 5/6/15)

None received

Prepared by: Randy Chinn / T. & H. / (916) 651-4121

5/6/15 16:16:18

**** END ****

SENATE COMMITTEE ON TRANSPORTATION AND HOUSING

Senator Jim Beall, Chair

2015 - 2016 Regular

Bill No: SB 404 Hearing Date: 5/5/2015

SUBJECT: Vehicles: traffic officers

DIGEST: This bill deletes the requirement that law enforcement vehicles be painted, but continues the requirement that those vehicles be a distinctive color.

ANALYSIS:

A relatively new way to change the appearance of vehicles is to wrap them in colored or printed vinyl. These films are attached with an adhesive and have a life of several years. Commercial vehicles and buses can often be seen with messages, art, or logos that cover the vehicle from end to end. This same technique can also be used to change the color of vehicles.

Existing law requires that motor vehicles used for the primary purpose of traffic law enforcement be painted in distinctive colors, as determined by the Commissioner of the California Highway Patrol.

This bill deletes the reference to “painted” and instead requires those vehicles to simply be a distinctive color.

COMMENTS:

The author believes that wrapping a vehicle can be less expensive than painting. By amending the vehicle code to eliminate the requirement that law enforcement vehicles be painted, while still retaining the requirement that they be of a distinctive color, the author seeks to create the flexibility for law enforcement departments to reduce the cost of creating their distinctive looks by using vinyl wraps or any other technology that achieves the same effect, a technology-neutral approach.

Supporters note that some automakers have started to ship vehicles to law enforcement agencies using the vinyl wraps. However, some law enforcement agencies have incurred the extra expense to paint the vehicle because of California’s law requiring paint. Under this bill, such painting would be unnecessary.

According to the author, the cost to wrap a car is $305-$840; the cost to paint is $700-$900.

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

POSITIONS: (Communicated to the committee before noon on Wednesday,

April 29, 2015.)

SUPPORT:

California Police Chiefs Association

California State Sheriffs’ Association

OPPOSITION:

None received

-- END --