Assembly Standing Committee on Governmental Organization

Thank you, for everybody who's here on time. I apologize about being a couple of minutes late. Good afternoon. I'm going to do some Housekeeping comments and noticing that we do not have a quorum, we'll proceed as a Subcommitee just to get the bills heard and in respect to all the Senators who are going to be here, witnesses. And I'll commence now. Witnesses can testify in person or by phone. The number to call is 877-692-9857877-692-8957 and the access code is 18 50110 zero.

I'm going to repeat that one more time. The number you can call is 877-692-8957 and the access code is 1850 1100. This number can also be found on the Committee's website and is currently being displayed on your screen. For those calling in, please mute yourself while you're in the queue to eliminate any background noise. For each Bill heard today, there'll be an opportunity for two witnesses in support, two witnesses in opposition, and we'll provide two minutes recommended for each person during testimony.

I'll gently tell you that it's two minutes, just that I'm fair for everyone. So there's no preferences on this. And for any additional witnesses that are calling in, you'll be placed in the queue until your opportunity to provide public comment, support and opposition will be alternated. When is your opportunity to speak? To provide comment, press 10, then unmute yourself in order to speak one more time. When it's your opportunity to provide comments, press 10, then unmute yourself. Please be brief.

I will remind you limiting your comments to your name, organization, and position only. Again, we do not have a quorum, so I'll proceed as a Subcommitee and a couple other comments. Ms. Davies is absent today. Ms. Waldron will be joining us for today's hearing only. There'll be a couple of measures on consent that we'll bring back, and I think Mr. Laird is here if you're ready to go. We're ready for you. I don't know how to do that.

Good afternoon, Mr. Chair and Committee Members. I'm here to present Senate Bill 269. I'd like to thank the Committee staff for working with me on this. This Bill will allow a craft distilled spirits manufacturer license holder that has a winery or brewery located on the same property to use consolidated venue for retail sales and tastings. I will accept the policy consideration as stated in the analysis as a Committee amendment.

Under existing law, craft distillers that also have a winery or brewery on their property must have separate retail sales venues and tasting areas, one for their distillery and one for their winery or brewery. The industry has grown past this current law on the issue, and the current situation is costly for small businesses. It opens them up to violations of the ABC Act.

If a customer buys an alcoholic drink from the retail sales area and takes that drink into a common area, and it's inconvenient for customers that want to purchase wine or beer or craft distilled spirits at the same location, this simply expands the privilege to craft distilleries. That also has been extended to wineries or breweries. The Bill passed the Senate to 36 to zero with no, no votes. It's had bipartisan support, no registered opposition.

Here to answer technical questions, if he just walked in is Nate Solaf of the California Distillers Guild, and at the appropriate time, I would request an aye vote.

Thank you, Senator. Are there any main witnesses in support?

No main witnesses, just someone for technical questions.

Any main witnesses in opposition? Not seeing any. So I'm going to keep moving this along. Public comments and support of the Bill. Name, organization and position only.

Good morning, Tim Schmelzer. Good afternoon. Tim Schmelzer with Wine Institute in support. Also, I'd like to thank the Committee for Considering and offering the amendments on Brandy. We have several wineries that also manufacture brandy. So happy to see the Bill extended in that manner. Thank you very much.

Thank you. Any public comments in opposition? Any additional support or opposition witnesses on the phone?

Thank you, Mr. Chair. If anyone wishes to speak or support or opposition to this Bill, please press one, then zero. Press one, then zero. And, Mr. Chair, we have at least one person who signaled that they wish to speak. Just a moment. Pleased. And we'll now go to line 145. Your line is now open.

Good afternoon, chair and Members. Melissa Heistu, on behalf of the family Winemakers of California in support. Thank you.

Thank you. And I think we have one other additional person here.

Thank you so much, chair Members. Nate Solo, on behalf of the California Artisanal Distillers Guild, representing over 200 craft distillers in the state, appreciate your support. Thank you.

Thank you. Any questions from Committee Members?

Yes, thank you, Senator, for bringing this Bill forward. We did something similar to this with the breweries and the wineries, and it really helped the morale of the two businesses trying to run together, co locate, basically. And so thank you very much for bringing this forward, and I'll be in support of your Bill today.

Thank you.

Thank you. Any additional comments? Yes.

Thank you. To the chair. I just want to thank the Senator for bringing this forward. Being from Lodi, it's always awkward to see when you have to separate this, so I'm actually jealous that we didn't think about this as one of our bills, so. Great Bill. Thank you, sir.

Thank you. Any additional comments? Not seeing any. I'm going to invite the author to close.

I appreciate the comments from Members, and at the appropriate time, I'd respectfully ask for an aye vote.

Thank you, Mr. Senator. Again, we'll take it up when we have a quorum, and maybe the sergeants could call for authors. I apologize. Mr. Bradford. I apologize. You may present before the Committee. When we have a quorum, we will take up the Bill. Thank you, Mr. Chair. Yeah, we apologize.

No, my problem. Thank you, Mr. Chair. SB 392 is just a straightforward measure that establishes a tide house exemption, as we've afforded pretty much every arena and stadium here in California. It will be for the Intuit Dome, the new home for the Los Angeles Clippers that is scheduled to open in 2024. And without any further questions, I simply ask for aye vote. And we have Mr. Bob Giroux here to add testimony.

Thank you, Senator Bob Giroux. On behalf of Murphy's bowl, LLC and the Los Angeles Clippers asking for an I vote today. This Bill actually touches the districts of three of the Committee Members. It's in the heart of Assemblymember Mckinnon's district. Assemblymember Gibson lives in the adjoining district, and Assembly Member Brian lives in an adjoining district and has several Members who will be working in, our constituents who will be working in the arena. And we intend on opening in 2024.

We'd like the Bill to take effect in January of 24 so that when we start doing our warm up concerts and other events in the arena, everything's going by the time that we're in place. So we appreciate your support. We appreciate Mr. Johnson's analysis and. Thank you.

Thank you. And you get award for being under a minute. Any main witnesses in opposition? Let me stop for a second. If you're okay with the Senator, just establish Quorum. Thank you very much, Madam Secretary, please.

Call the role on the quorum. Sanitago. Lackey. Aguira-Curry. Burman. Bryan. Cervantes. Dahle. Garcia. Gibson. Jones-Sawyer. Low. Mathis. McCarty. Mckinnor. Patterson. Quirk-Silva. Ramos. Rubio. Rivas. Rubio. Ta. Villapudua. Waldron. We have a quorum.

We have a quorum. Thank you. Now we're going to go to any public comments and support in the room, name, organization, position only. I'm not seeing any. So, any comments in opposition in the room? Moderator, the phones.

Anyone wishing to speak in support or opposition to this Bill, please press one, then zero at this time, Mr. Chair, no one has signaled that they wish to speak.

Thank you. Any questions from Committee Members? Yes, Mr. Bryan and Ms. McKenna. Or however you prefer to do it.

Appreciate you, Mr. Chair. And I want to thank the Senator definitely in support of this Bill. It's an incredible idea. I just want to make sure. Did we check in with LA's primary basketball team, the Los Angeles Lakers, to make sure that they were okay with this?

They would like us to move out as soon as possible.

Exactly. They wish they were moving into a dome.

Thank you, Chairman. And thank you, Senator, for bringing this forward. I will definitely be supporting this Bill today, but I had a few questions. What's the difference between the Clippers arena, the sofa, the forum, and the YouTube theater? And can you give me an example and cite any related research? I just had to mess with them. I'm sorry. And I really don't have a question.

As a condition for the Bill to be heard, we need the question answer. They're all in the City of Inglewood. Okay? And they're all within a half mile of each other. And they're all State of the art arenas, not only here in California, but in a nation and possibly the rest of the world.

And one is a historical landmark that's had its tidehouse exemption for many, many years. And that's the forum. And then the other, the sofa and the YouTube arena, sit within the 296 acres of the sports and entertainment district. And the arena, the intuit dome for the Clippers, is just outside of it on Prairie Avenue. As you know, Assembly Member and we.

Were able to secure the tide House exemption for all 296 acres four years ago, not just for the sofa.

Thank you, guys. Thank you, Senator. That's what I get for asking veterans questions. Thank you.

Seeing that that might satisfy the. Ms. McKinnor, we'll move on. Any other questions from Committee Members or comments? We have a first. Mr. Brian, I think I heard correctly. And Ms. Crook, Silva, you may close. As stated, is a straightforward measure that established a tide House exemption, as we experienced all throughout the other arenas and stadiums in California. And we respectfully ask for. I vote, and this Bill enjoys do pass. Madam Secretary, please call the roll.

SB 392, Bradford. The motion is do pass to the Appropriations Committee. Sanitago, aye. Lackey, aye. Aguira-Curry, aye. Burman. Bryan, aye. Cervantes. Dahle, aye. Garcia. Gibson. Jones-Sawyer. Low. Mathis. McCarty, aye. Mckinnor, aye. Patterson, aye. Quirk-Silva, aye. Ramos. Rivas, aye. Rubio. Ta. Villapudua, aye. Waldron, aye.

The Bill has enough votes, but we'll leave it open for add ons. And now SB 269 is in search of a first and a second. Ms. Quirk-Silva, right. I'm sorry. Ms. Agar Curry, who is the first? Is the second. I apologize. Aguair-Curry, first, and Ms. Quirk-Silva, second. Man sector, please call the roll. And this is do pass and accept amendments

SB 269 Laird, the motion is do pass as amended to the Appropriations Committee. Santiago, aye. Lackey. Aye. Aguiar-Curry, aye. Berman, Bryan, aye. Cervantes. Dahle, Aye. Garcia. Gibson. Jones-Sawyer. Low Mathis. Mccarty, Aye. Mckinnor, aye. Patterson, Aye Quirk-Silva, Aye Ramos. Rivas, aye. Rubio. Ta. Hey, Aye. Villapudua, aye. Waldron.

As necessary, votes will leave it open. Now, the consent calendar is in search of a first and second. Mr. villapudua is first. If we have a second, Mr. Brown is second. Madam Secretary, please call the roll.

On the consent calendar. We have file item number 5, SB 771. The motion for that measure is do passed to the Appropriations Committee. Recommend consent. The consent calendar.

And file item 884. The motion is do pass on the consent calendar. Santiago, aye. Santiago, aye. Lackey. Aye. Aguiar-Curry, aye. Berman. Bryan, aye. Cervantes. Dahle, Aye. Garcia. Gibson. Jones-Sawyer. Low Mathis. Mccarty, Aye. Mckinnor, aye. Patterson, Aye Quirk-Silva, Aye Ramos. Rivas, aye. Rubio. Ta. Hey, Aye. Villapudua, aye. Waldron.

Consent calendar passes. We'll leave it open now. We're moving on to SB 430. Mr. Dodd, if you're ready. First.

I think you need to turn on the MiC.

We got it. Mr. Chair, let me begin by thanking you and your staff for the work on this Bill. I will gladly accept the 15 amendments listed in the analysis. Among other things, these amendments respond to concerns about the ability of consumers to scan codes by prohibiting any advertising that allows the consumer to directly purchase alcohol from those ads. They respond to concerns about bookending by making it clear that advertisements by alcohol manufacturers shall not be placed before or after advertisements for the retail licensee.

And they respond to concerns that the ABC will not have the necessary tools to enforce the provisions of this Bill by requiring reports to the ABC making it clear that ABC will have access to all of these contracts. SB 430 provides a limited tidehouse exemption exception to an entertainment business under common ownership with an alcohol beverage retail business.

According to the Department of ABC, if a company owns a subsidiary that holds an alcohol retail license, then all other subsidiaries are prohibited by Tidehouse laws from selling advertising space to an alcohol manufacturer. This broad prohibition is particularly problematic when one of the subsidiaries is an entertainment business that derives revenue from advertising. I want to emphasize a couple of points. First, alcohol advertisements in media is absolutely nothing. New multimedia companies who have alcohol retail license are currently doing alcohol advertisements through some of their subsidiaries.

In this case, this Bill is only needed because Amazon happens to own an alcohol retail license. This simple fact prohibits them or any other of their other subsidiaries from accepting anything of value from alcohol manufacturers. Without that retail license, no such restrictions would exist. Thus, no need for this Bill. Now, I know the opposition is going to say that it was Amazon's choice to obtain an alcohol retail license and the Legislature should not be the solution to their problems. To that I'll say this.

How many times has this Committee voted on alcohol bills for specific groups, some of which are in hypocritical opposition today in order to resolve an issue with a tide house or an issue with the ABC Act. As the analysis points out, the number is quite large. There are currently countless tidehouse exceptions for various arenas, stadiums, theaters, speedways. There are even exceptions for the Bass brewery, which in 1998 acquired the Holiday Inn Hotel chain.

Just today, your Committee heard a Tide House Advertisement Exception for the upcoming Clipper arena. Or sometime today you will. The point is, Members, that tidehouse advertisement exceptions are extremely common. Second, I know there's been discussions that the provisions of this Bill are somehow unenforceable and that ABC is not going to enforce any of the provisions of this Bill with the amendments taken here today. This Bill now includes a number of provisions aimed at making sure ABC has all the information they need should problems arise.

In fact, with the amendments taken today, SB 430 now includes countless protections and safeguards not seen in any other tide House advertising Bill in the history of this Legislature. With that said, to argue that ABC won't enforce our laws is, quite frankly, irresponsible and an argument that you can make with just about every alcohol Bill that goes through our respective communities. After all, ABC is not on the premises of every single alcohol licensee. During that every single provision of the ABC act is being followed.

If that is suddenly the criteria for alcohol bills, then our Members can job become very easy. Just vote no on every single Bill that comes through. To be clear, my staff has been in constant contact with the Department on this Bill. The Department has made it clear they will enforce the provisions of this Bill just like they enforce any other Tide House advertising exception and the rest of the ABC Act.

Finally, this Bill has nothing to do with pay to play or in any way allows for such a system. The Bill makes it clear that any coercion is not only a violation of the ABC act, but a misdemeanor. I think this Bill is a fair compromise that allows for the issue to be resolved while also maintaining a clear separation between the alcohol retail licensee and the streaming media company. Again, Chairman, thank you and your staff for all of your hard work.

I know this is a tough issue. I respectfully ask for your. aye vote. With me today is Anthony Williams on behalf of Amazon and Chris McKelly on behalf of Hollywood Chamber of Commerce.

And we're going to be reminding everybody that it's a recommended two minutes. You may begin.

All right, thank you, Mr. Chair, Members of the Committee. I'm Anthony Williams with Amazon and we're here in support of SB 430 on behalf of our entertainment businesses, which include Amazon Studios, Prime Video and MGM. As many of you know, these are home based California home based businesses and we're proud to have invested significantly in the state.

The Senator Dodd stated SB 430 is a limited tidehouse exemption exception that will allow alcoholic beverage manufacturers to advertise with our entertainment businesses in a manner consistent with virtually every other entertainment company. As he also pointed out, alcohol commercials have been appearing on television for decades, and product placements in movies and sponsorships related to those product placements have been occurring for decades. This is not new.

The only difference is in a situation like ours, where our entertainment and advertising businesses share a common parent company with an alcohol retailer. Now, given this common parent company connection, the Bill and the amendments that have been agreed to by the author today that are laid out. The 15 amendments laid out in the Committee analysis require and include strong safeguards and firewalls. The amendments also add significant penalties to conduct to protect rather against any improper conduct as it relates to retail sale and advertising of alcohol.

So I want to make very clear, this is only about allowing advertising through our California based companies. This is not a reflection of us trying to overturn tight house laws or leverage manufacturers or enter the distribution tier. That's not what this Bill does. There is no change or disruption to the distribution chain. There is no loss of market share or shelf space for manufacturers, and there would be no loss of jobs. We're very proud that our productions actually produce jobs right here in California.

So in fact, like I said, the Bill reflects the opposite. There is a limited exception for our media and entertainment businesses to further invest in production so our retail businesses can continue to operate squarely within the retailer tier. So the amendments, again provided in the Committee analysis, really thank the staff and the chair for all the hard work on that. These are reasonable. They align the Bill with a three tier system and protect the spirit of those tight House restrictions.

So again, thank you for your willingness to listen and consider this measure. And so we strongly support the Bill. Respectfully ask for your aye vote. I also have with me, if needed, Tyler Blackney from our physical retail public Policy team, and Cameron Numa, who leads our global media and entertainment policy team to help with any help. Answer. We got a little bit over a minute left, so we'll use it for the next Mr. Chairman and Members.

Mr. Speaker designate Chris McKayley here on behalf of the Hollywood Chamber of Commerce. We think Senate Bill 430 represents a modernization of California's Tide House laws, and that by allowing certain entertainment companies to advertise the sale of alcoholic beverages in movie and television productions. As we are competing with numerous other states in production. This Bill is important for Hollywood in the Greater Los Angeles area, but certainly the State of California.

We think it ultimately result in a number of direct production jobs and certainly benefit A lot of indirect ones in other industries, such as grocery and hospitality as well. And so we think it's overall very positive for the State of California and certainly the Los Angeles region. We thank Senator Dodd for his authorship of this measure, and we respectfully ask for your aye vote today. Thank you. Thank you. And now that brings us to main witnesses in opposition.

How about me too in support?

Zero, yeah, no, we'll go through that in a second. We went through the. Sorry about that. If I made any confusion. So now let's go through the main witnesses in opposition. And then I think there's two seats over here. You're welcome to take those. Try to keep it to four minutes as well. 2 and 2. You may begin. Mr. Chair and Committee. Sorry, the mic. I apologize. You got me now.

Okay. Sorry about that. Mr. Chair and Committee. Tim Schmelzer, representing Wine Institute. We represent over a thousand California wineries located throughout the state. We are here in opposition to Senate Bill 430. And let me explain why these tide House rules. I know we pass these exceptions from time to time, but in this case, the scale of this Bill is many, many more times than anything that's been before the California Legislature. The reason that this tidehouse exception or this tidehouse rule is so important to us is for balanced access to market.

Right now, it is illegal for a company that owns a retail off sale license. So in this case, we're basically talking about Whole Foods markets, right? Company that owns Whole Foods markets to take advertising money from alcohol producers such as wineries. The reason for this is to not allow for the dollars over here to influence the dollars over there. That would be problematic. And because we've had these laws, this has allowed the California wine industry to flourish.

This is why when you walk down the wine aisle, you see hundreds of brands of wineries of every shape and size. Everybody has equal access to that. Contrast that with any other row. You go down in the grocery store where these laws aren't in place, and you'll see one or two brands, like in soft drinks and such. Right. That's why we care. We want that continued access. We don't want the influence of dollars affecting these retail decisions.

Amazon, of course, was very fully aware of these laws when they acquired Whole Foods, undoubtedly, and this is clearly a case of them asking for forgiveness rather than permission. And this Bill, stated frankly, is a bailout for them for a decision they clearly regret. The scale of this Bill is unprecedented. All of these tidehouse exceptions we've talked about, many which one Institute has supported absolutely, are limited in scale to a geographic location with limited hours.

This Tidehouse exception applies to streaming services with literally global reach that run 24-7 all of the time, and by the same company that owns a giant retail market, whole Foods Market, that sells alcohol for off sale. So you can go take home over 100 of them in California that operate 365 days a year. The scale of this versus any other tidehouse exception that we've ever considered is absolutely off the hook.

Speaking very briefly to the amendments, these are attempt to create more so called guardrails so that this part of the company doesn't talk to that part of the company in our consideration. As long as you're working for the same company, you're equally vested in that company's success, and the one action will always influence the other. I have Jacob Applesmith here with me, former ABC Director, to speak on behalf of Wine Institute to the enforceability of this measure. And you got a little bit over a minute.

Okay. The Bill is not enforceable. And the reason the Bill is not enforceable is the ABC has extremely limited resources and its ability to figure out what a corporation based outside of California is doing in the state is extremely limited. I was talking to some of my old enforcement friends, many of whom ran this unit that would be responsible for this, and we came up with one scenario, which is a truckload of documents driven by someone from Austin or Seattle driving up to the ABC.

That also includes conversations, tape recorded between people on the two sides of this enormous corporation. That's what it would take to enforce this law. And the other thing, I would say just about some of the amendments, I think in principle they're well designed, but they just don't work in reality. And finally, as just to the contract production of the contract provisions, the ABC virtually has no authority over Amazon.

It would have to hire the Attorney General to go to court and to fight Amazon in court to get those contracts, unlike its police powers with respect to licensees. We're a little bit over the time, just to be fair to both sides, the Committee can always direct and say, hey, we want to go longer, but I just want to state to the rules that we all agreed to at the beginning. Well, we could wrap up. Would we ask for your no vote today?

And we're happy to answer questions. Thank you. Now we're going to go to public comments in the room who are in support. Again, name, organization and position only.

Amy Brown. On behalf of the San Diego Regional Chamber, in support.

Meg Snyder Axiom Advisors. On behalf of the National Football League, in support.

Manny Diaz. Representing the California Hispanic Chambers of Commerce, in support.

Melasagai. Representing the California African American Chamber of Commerce, in support.

Carlos Guterres. On behalf of the California Groceries Association, in support.

Malak Tang with the Silicon Valley Leadership Group, in support.

Melissa Cortez. On behalf of the San Francisco 49 ers, in support.

John Latimer. On behalf of the California Retailers, in support.

Thank you, chair and Members, Ryan Flanagan, on behalf of the Wine Spirits Wholesalers of California, we have an opposed, unless amended position. We thank the author and Committee for taking the amendments to further tighten the Bill, but we like to see it narrowed to NFL. Thank you. I'll go to tweeners in a little bit, but thanks.

Thank you. Now we're going to go to public comment in the room in opposition. Again, name, organization and position only.

Dennis Sloper, for California beer and beverage distributors, in opposition.

Thank you, Mr. Chairman, Members. Awa Kadani Young's Republic in opposition. Thank you.

Thank you. Thank you, Mr. Chair, Members and staff. Mitch Steiger with the California Labor Federation. Apologies for our late opposition, but we are also opposed.

Thank you. Kevin Lucky with the California family Beer distributors in opposition. Thank you.

Thank you. Chris Walker with the California Craft Brewers Association in opposition.

Thank you. Thank you. Now, any tweeners? Nope, not seeing any. Now we're going to go to the phones. Mr. Moderator, please.

Thank you, Mr. Chair. For those who wish to speak in support, opposition or tweeners, please press one, then zero at this time. We're going to first go to line 147. Your line is now open.

Committee Members Jackie Graywall with UFCW, Western States Council in opposition. Apologies for the late opposition. Thanks.

Thank you. Name, organization, position only. We'll now move on to line 149. Your line is now open.

Benjamin Lopez with the Inland Empire Economic Partnership in support of the Bill. Thank you.

And, Mr. Chair, we do have at least five or six people who've signaled that they wish to speak. Just a moment while we process through them. Sure. Thank you. And we're going to now go to line 148. Your line is now open.

Mr. Chairman, Members Shane Gusman, on behalf of the Teamsters in opposition.

We're going to now go to line 150. Your line is now open. Line 150. Your line is open. Mr. Chair, we apologize. Just a moment. We're going to go and move on to line 152.

Mr. Chair, Members, this is Chris Wilson with the Los Angeles County Business Federation in support of SB 430. Thank you.

We'll now move on to line 141. Pardon me. 144. Line 144, your line is now open.

Good afternoon, chair and Committee Members. My name is Tyler Gerlack, representing the California Asian Pacific Chamber of Commerce and Support.

139, your line is now open.

Jesse Nunez, Culver City Chamber of Commerce, in full support of SB 430.

Mr. Chair, just one more moment and we'll have our final speaker. Thank you. We're now going to go to line 140. Your line is now open.

Hi, my name is Abby King on behalf of the Valley Industry and Commerce Association, and we support this Bill.

And, Mr. Chair, there is no one else who signaled that they wish to speak.

Yeah, Thank you, Mr. Chair. So coming into this hearing, I had a few concerns about the Bill. However, after hearing the amendment that author has agreed to take, I will be supporting this Bill today, and I look forward to seeing the amendment in bring, if this Bill make it to the floor, and it will review it further at that time. Thank you.

Thank you. Now we're going to go to any questions or comments from Committee Members, and just, if it's back and forth, we'll just go through the chair to make sure that we're orderly. Thank you, Mr. Chair. Yes. Mr. Ta.

Thank you, Mr. Bryant. And then Mr. Mccarthy.

Thank you. I'm not sure if we technically got this, but, Senator Dodd, can you go over in detail again the amendment that you're proposing to address concerns potentially? Yeah.

And I'm going to jump in just for a second, too, if I may. There are about 15 amendments, so we can run through them. There are some bigger ones. I'll let the author reply. But just to be clear, because what we basically did was ask all the opposition, all the interest of parties, everybody involved, to send in everything over. So we came up with 15 amendments, substantial that we think addressed most of the concerns. But certainly you should ask all you need to ask. I just wanted to make sure that we were clear on how many there were.

Thanks for the question, Assembly Member Mccarty. Look, we had a lot of late opposition. This thing went through the Senate 36 to zero. And then all of a sudden it comes over to the Assembly, and all these concerns come up. And I think most of you know that my bills, I work hard and I work really hard to try to find that middle ground.

And so when the Chairman and his Committee staff said, we think that these 15 amendments that put guardrails that address the concerns of the opposition forward, I said, absolutely. And so I don't know if Tyler wants to go into them specifically, but through the chair for the benefit of.

The Committee, if I'm happy to do it, or the question was directed to you, you're happy to go through them, or the, that's fine. Either way, I can try to summarize the best I can. Whatever satisfies your question, Mr. Mccarty, that's, that's what I'm after.

Yeah. Not just me, the Committee Members as well. So if you or the Committee staff want to kind of high level overview, that'd, I think, be helpful, we'll go through them in 1 second.

I had Mr. Bryant that also had a question and, Mr. Mathis.

I was just going to say, I think.

Well, I skipped over, Mr. Bryant twice now. Mr. Bryan, please.

Thank you, Mr. Chair. Definitely trying to be patient. I know this is an important issue. I know that Amazon's streaming and film presence has a huge impact in the LA region, in particular in Culver City and parts of my district.

And I know that this is important because it sits in a niche, nuanced position that not other companies and other position people are found in. That being said, I don't know if 15 is the landing spot, just based on numbers. I think there's conversations that have to happen late. Opposition is still opposition. And so I'm encouraged that folks are sitting down, folks are meeting, folks are trying to figure out what makes sense.

I also don't think a comment like it's unenforceable sits great because what's the point of negotiating amendments in good faith if the concern is that it's unenforceable? Bring us something that would help ease comfort in making it enforceable so we can talk about that as well. You have my support in moving forward today and a lot of trust that the author is going to get to where we need to be. Thank you.

And then, Mr. Mathis,

Mr. Chair, I was just going to kind of, along with Mr. Mccarthy, if we could have the chair go through the amendments, since there are 15 of them, I think that would ease a lot of concerns and probably a lot of questions from the dias.

Any other Committee Members? Mr. Villapudua.

So thank you, Mr. Chairman. Through the chair. I have a few questions. So in my office today, we actually kind of talked about this with my interns.

And I sitting there, I said, well, we kind of threw this around. So the questions were, was like, is the firewall going to work? Right. Second one is that I come from a town that does have wineries and does have these boutique wineries, and I look at them as small businesses. Is it going to hurt the small business? Those are my two questions.

Well, let me just, I am going to answer from somebody that probably represents more wineries than anybody in Napa and Sonoma County. And I have not had one call, I've had a call in a conversation from both the people at the dais here and Bobby Cook, who's a friend from the Wine Institute. Not one individual winery has come forward and called me. Call my office. I would also say that there's over 5000 wineries in the State of California.

And some time ago, we gave an exception, tied out exception for all of them to go direct to consumer, and we talk about huge deals at the time. Almost all the other industries were against it, were against that as well. And that has worked absolutely phenomenally well over the objections of the rest of the industry. There's a competitive situation.

I think that's what's causing that problem, but I don't think it's going to be any problem for the wineries, frankly, with the guardrails that are put on it. Your first question, sir.

There was the firewall.

Yeah, and the firewall.

Thank you. And just a reference for Committee Members who. Just a real quick reminder that the Committee amendments are on page six of the Committee analysis, where you could begin to see the 15 amendments that were proposed. Any additional questions for Committee Members? Mr. Low, apologize. Thank you very much.

I just want to comment that I want to acknowledge that the chairs of both the Assembly and the Senate have worked on this, and great amount of deference goes to both Committee chairs as well as the staff and trying to craft as much of a fruitful product that we have before us, too. And with that, I'll be moving and making the motion in support.

We have a first and a second. Did I hear a second or did I not hear a second? Mr. Bryan, any other Committee Member, questions or comments? We have a first, a second, and look, we took substantial amount of time on this Bill, and we know that it came to us in a particular form. What we wanted to make sure is that we addressed as many policy concerns as we possibly can, and we addressed most of them.

And the policy considerations presented in the office has taken into account suggested amendments from opposition, interested parties, Committee Members, staff, and I myself as a chair, because I've had conversations with much of the opposition, made myself available to anyone who had any concerns about opposition. The intent was to further sound public policy through additional safeguards. Lots have been talked about a firewall. There's a conversation about firewall there. There was issues brought up about QR codes. We took the QR codes out and went further.

We had a conversation about bookending commercials that was taken out. I can go through all of them one by one. They're 15. So I pointed for you to reference them there. And we talked about regulatory oversight, taking into account the state's tide House laws and its enduring foundation and principles. Took into account also the evolving contemporary media markets today. Look, this Bill still has a process to go. It goes through appropriations, it'll go to the floor, and I'm committed, and it goes back to Senate. Now.

I'm committed and any Member of the Committee can continue to take a look at it. I'm committed to working if there's any remaining issues on it as it moves further. But from what got to us and the back and know, Mr. Dodd and I have been known to go back and forth in a very friendly, heated debate in some ways, but it took some pushing back and forth to try to figure out something that landed the framework or safeguards.

Now, I recognize that there was late opposition that we received last night and some that are receiving today. But that's why we want to continue to work on this, to make sure that we address all the public policy concerns that may still be lingering. Now, I won't chair the Appropriations Committee, obviously, but those Members who have concerns can continue to have that conversation at the next stop.

I know that I will try to continue to have this conversation because there were things that were brought up towards the end last night. Folks called over and said, hey, look, I have an additional concern. That concern wasn't brought up prior to us having the Committee staff briefings, so they weren't addressed. But everything that was brought to us, we did a genuine attempt to address most of it. And for fairness of argument, there were a lot of things the author did not want.

But we made a very good case about why some of these things needed to happen. And here's where we are. 15 amendments in a lot of regards, it's kind of rewriting the Bill in a different way, trying to get to where the author wanted to get to with 15 amendments in addition to.

So I want to thank the Committee for its Debate and thank the author for working with us and Committee staff, because our Committee staff had worked over the weekend every single day, because we wanted to spend some time on this. Now we have a first and we have a second, and I'll just ask Madam Secretary to call the role. You accepted the amendment. I'm sorry, I apologize. Accepted the amendment that we heard.

You continue to work with the opposition and we have your commitment to do that. Yes. Continue to work with me. We received additional concerns at the end. So we continue to work on some of those concerns? Yes. And it'll go to appropriations, where you can have a conversation with the appropriations chair, ma'am. And we're inviting the author to close.

Thank you very much, Members. And, Mr. Chair, as I'm entering in my 8th year, as in middle of my 8th year as Chairman of Go, I just want to look you all in the eye and say, I fully understand these issues, as does my staff. We have taken these 15 amendments from your Committee and believe they have mitigated any credible concerns from the opposition.

I will say credible concerns because some of the opposition has been omitting the facts and distorting existing law about what this Bill does. My commitment, as in all my bills, I will work this to the last day. If there are concerns all the way down to the floor, I will continue to work. With all due respect, with Mr. Applesmith's comments, he doesn't work for the ABC anymore. I have an immense amount of respect for him. I worked with him when I was Geo chair.

Not only is he a great human being, but he was a great Director. But he's not no longer the Director of Enforcement at ABC, and we've had conversations, and we do believe that this Bill is enforceable. I want to thank the staff again for their great work in making this Bill something that I believe each and every one of you can support today and hold me accountable as this thing moves forward into appropriations and then onto the floor. Respectfully ask for your aye vote.

Thank you, ma'am. Secret. Please call the roll.

SB 430. Dodd. The motion is do pass as amended, to the Appropriations Committee. Santiago, aye. Lackey, Note Voting. Aguiar-Curry, Not Voting. Berman, aye. Bryan, aye. Cervantes. Dahle, aye. Garcia. Gibson, aye. Jones-Sewyer. Low, aye. Mathis, aye. McCarty, aye. Mckinnor, not voting. Rivas, aye. Rubio, aye. Ta, aye. Villapudua, aye. Waldron aye.

The Bill has enough votes to move on. We'll leave the roll call open for additional Members.

Thank you, Members. Mr. Chairman and staff.

Ms. Gonzalez, I thought I saw you walk in. Whenever you're there, you go. Sorry about that. Whenever you're ready. This has a support. Support. And we have a first in Mr. Mathis, I believe. Do we have a second? We have a second. You respectfully asked for an IVO. I apologize. I did not hear that. Any main witnesses in support. Any main witnesses in opposition. Any public comments and support in the room, name, organization, and position only.

Any opposition comments in the room, name, organization, and position only. Anyone on the phone, Mr. Moderator?

There is no one, Mr. Chair.

Questions from Committee Members? And the author may close. Oh, sorry, Mr. Gipson.

Her birthday.

What am I getting my wife for her birthday? That's a top secret thing. I can't tell you about here. And I want to say thank you to Senator Gonzalez for letting me jump in front of her. I have a dentist appointment in about 45 minutes, and so she's very nice to me.

Thank you very much. And we know that people had fun during lunch. We have a first and we have a second. Madam Secretary, please call the roll.

SB 787. Dahle. The motion is do passed to the Appropriations Committee. Santiago.

Aye.

Santiago aye. Lackey.

Aye.

Lackey aye. Aguiar-Curry.

Aye.

Aguiar-Curry aye. Berman.

Aye.

Berman aye. Bryan.

Aye.

Bryan aye. Cervantes. Dahle.

Aye.

Dahle aye. Garcia. Gipson.

Aye.

Gipson aye. Jones-Sawyer. Low.

Aye.

Low aye. Mathis.

Aye.

Mathis aye. McCarty.

Aye.

McCarty aye. Mckinnor.

Not voting.

Mckinnor not voting. Patterson.

Aye.

Patterson aye. Quirk-Silva.

Aye.

Quirk-Silva aye. Ramos.

Aye.

Ramos aye. Rivas.

Aye.

Rivas aye. Rubio.

Aye.

Rubio aye. Ta.

Aye.

Ta aye. Villapudua.

Aye.

Villapudua aye. Waldron.

Aye.

Waldron aye.

Bill has enough. We'll leave it open. Thank you, Ms. Gonzalez, for your kindness there.

You may proceed on time to his appointment, too, after all that. Well, thank you, Mr. Chair. Good afternoon, Members. I'm here to present SB 498, which promotes stronger enforcement and greater compliance with current alcohol beverage control. Thank you. This Bill came up because there was an unfortunate incident in Long Beach where three members of our community passed away. Parents Joseph and Rehan, as well as their three-year-old son, Omar, because they were killed after a young driver, underage driver, was impaired and crashed into them.

So specifically, the Bill increases the fine for selling to minors from 1000 to 3000, increases the limits on petitions for an offer and compromise from three to 6000 for the first violation, six to 12 for the subsequent within three years, and 20 to 40 for a second violation that occurs within 36 months. We want to give ABC more authority to ensure that they are able to assess aggravated penalties based on whether there is a subsequent death or great bodily injury.

So, testifying in support today, we have dear friend Amy Brown. On behalf of the City of Long Beach, and I respectfully ask for an aye vote.

Thank you, Ms. Brown. I mean, this was all as in, Ms. Brown, please.

Okay, thanks, Mr. Chair Members. Amy Brown, on behalf of the City of Long Beach, we want to thank the Senator for authoring this important Bill. I'm not going to reiterate the statements that she had made. I will just mention that we believe that the provisions of the Bill that allow for extended flexibility when it comes to the Department to consider the outcome of the violations after they leave the establishment could prevent the outcomes that are outlined in your analysis. So, we ask for your aye vote.

Thank you. Any main witnesses in opposition? Not seeing any comments and support in the room. Name, organization, and position only. Not seeing any main opposition in the room. Name, organization, and position only. Mr. Moderator? Anyone on the phone? Thank you, Mr. Chair. There is no one. Any questions from Committee Members? Yes, Mr. Gipson. Thank you very much. I want to thank the Senator for bringing this Bill before us. 498.

We also share Long Beach together, and I know she referenced this family who suffered tragedy, but I want to lift up the name. The Palacios family. You guys may not know, but a drunk driver leaving the Tavern's bar in Long Beach was intoxicated as well as under influence of drugs. Floored his truck, went through an apartment, first floor. That killed the father, Mr. Palacios, the breadwinner, his three-year-old daughter, and this 16-year-old son. He was 16 at that time.

Just got up to you. Go use a bathroom. And that's the reason why he was not killed. He graduates tomorrow from high school on Friday. Excuse me. Who. His father will not be there. His three-year-old sister would not be there. And I want to thank the author for bringing this forward, because I think we need to have tougher penalties. ABC. I want to lift you up. They were there. They investigated, and their outcome proved to be where this Tavern needed to be closed down.

So, again, I want to be considered as a co-author of this Bill. So, if you would have me, I'll be more than happy to do what I need to do on the floor when this Bill gets to the. On the floor of the State Assembly. Thank you.

Thank you so much.

Thank you. Any additional comments from Committee Members? Not seeing any. You may close.

I respectfully ask for an aye vote. Thank you so much, Mr. Chair.

Thank you. We have a first and a second already. Madam Secretary, please call the roll.

SB 498. Gonzalez. The motion is do passed to the Appropriations Committee. Santiago? Aye. Santiago, aye. Lackey? Aye. Lackey, aye. Aguiar-Curry? Aguiar-Curry, aye. Berman? Berman, aye. Brian? Brian, aye. Cervantes? Dahle? Dahle, aye. Garcia? Gibson? Gibson, aye. Joan-Sawyer? Joan-Sawyer, aye. Low? Aye. Mathis? Mathis, aye Mccarty? Mckinnon? Mckinnon, aye. Patterson? Patterson, aye. Quirk-Silva. Quirk-Silva. Aye Ramos. Ramos. Aye Rivas. Rivas. Aye Rubio. Rubio. Aye. Tri Ta. Aye. Villapudua. Villapudua. Aye Waldron. Waldron. Aye.

Bill has enough votes. We'll leave it open.

Thank you.

I don't see the Senator, Ashby. So how about we just run through all the bills so that the Members who have missed bills can leave when we get their last one. Can you do that?

So we'll open the roll on all the bills that folks may have missed.

Yeah.

On the consent calendar to clarify. File item Five, SB 771, the motion is do pass. Recommend consent. FiLE item Eight, SB 84, the motion is do pass to the Appropriations Committee. Recommend Consent Cervantes Garcia Joan Sawyer Joan Sawyer I Low I Mathis Mathis I Patterson Patterson I Ramos Ramos I Rubio Rubio I Waldron Waldron I.

Consent. Calendars out.

Berman? Berman, aye and Gipson? Gipson, aye. File item one, SB 269 Laird Berman. Berman aye Cervantes Garcia Gipson? Gipson, aye. Joan Sawyer Joan Sawyer aye Low aye Mathis Mathis aye Ramos Ramos aye Rubio Rubio aye Waldron Waldron aye. We'll leave it open for Members to add on. Aye do.

File item two, SB 392 Bradford Berman Berman Aye Cervantes Garcia GayeBSON GayeBSON aye Joan Sawyer Joan Sawyer aye Low Low aye Mathis Mathis aye Ramos Ramos aye Rubio Rubio aye Waldron Walder and aye. We will leave it open for additional Members.

Now we're just waiting for the author. Welcome, Senator Ashby. You can. Anytime you're ready, you can begin. Thank you.

I don't know if it's Senator freshman hazing, but they gave me Committee hearings on the farthest possible away hearing rooms that I could possibly be in at the exact same time. And that was by design.

Yeah, I figured.

You're welcome to come up here as well.

Assembly Member hazing. That's okay. Is it okay if I just stay here? You may through quickly. All right. Thank you, Mr. Chair and Members, today I am here to present SB 788, which creates parity in the production of beer, cider, and perry across both large and small manufacturers. At least I am finishing you out today with something good, craft beer. I'm proud to work with the California Craft Brewers Association, which represents more than a thousand craft brewers across all of our districts.

That's what I'm talking about. Cider and perry are both considered a form of wine, even though the process for manufacturing cider and perry is identical to beer. All beer manufacturers were initially required to obtain a wine grower's license to manufacture.

There was a Bill AB 779, which I'm sure one of you passed in 2014, which is great, and it solved this problem for larger manufacturers, but it has not been solved for the smaller manufacturers, which is what Senate Bill SB 788 seeks to do. Smaller manufacturers encompass nearly 95% of the breweries in California and are now inexplicably forced to operate under two different sets of rules, which hinders their business operations.

At its heart, this is a small business Bill meant to help our local craft brewers be able to make beer, perry, and cider all at the same time. I have with me one support witness who's from the Craft Brewers Association. I don't know if he brought samples with him. You are welcome to ask him. His name is Chris Walker. He's here to talk to you. And I respectfully ask for your aye vote.

Thank you, Senator.

Thank you, Senator.

Mr. Chair, Members of Committee, Chris Walker, on behalf of the California Craft Brewers Association, like to thank the author, and thank you. She did a great job presenting it. This basically equals the Plainfield allows for the smaller craft brewers to also do with the large brewers, which is to make cider and Perry using the same equipment as their brewing equipment without having to get a second license. So appreciate your support. I'm here to answer questions.

Move the Bill.

Thank you. We have a first and a second already. Appreciate a third. Any main witnesses in opposition? Not seeing any. Any public comments and support. Name, organization and position only. Opposition may begin to line up. Name, organization and position only.

David Bolog in support. Thank you. Any additional comments on the phones, Mr. Moderator? Chair. There is no one.

Any questions for Committee Members? Seeing none. The author is invited to close. zero, I'm sorry, Mr. Berman. I apologize.

No, I appreciate that. Thank you, Mr. Chair. I just want to thank the Senator for bringing the Bill. I actually was at a craft brewer in my district a couple of weekends ago who was complaining that they couldn't do this. And I didn't know about your Bill yet because I hadn't had my staff meeting about this hearing yet.

And so I'm going to go back now and tell them that this is something that California is working on, and I think they're going to be really happy to hear it.

Mr. Berman, you could take full credit.

Yeah. Happy to add you as a co author, if you'd like, Mr. Berman.

It would be an honor and a privilege.

All right. Any additional comments? The author may close.

I urge an aye vote. Thank you so much. Thanks for waiting for me.

Thank you, ma'am. Secretary, please call the roll.

SB 788. Ashby. The motion is do passed to the Appropriations Committee. Santiago? Aye. Santiago, aye. Lackey? Aye.

Lackey, aye. Aguiar-Curry? Aguiar-Curry, aye. Berman? Berman, aye. Brian? Brian, aye. Cervantes? Cervantes, aye. Dahle? Dahle, aye. Garcia? Gibson? Gibson, aye. Joan-Sawyer? Joan-Sawyer, aye. Mathis? Mathis, aye. Mccarthy?. Mckinnor? Patterson? Patterson, aye. Quirk-Silva? Quirk-Silva, aye. Ramos? Ramos, aye. Rivas? Rivas? Rivas, aye Rubio? Rubio, aye. Tri Ta, aye. Villapudas? Villapuduas, aye. Waldron?

The Bill has enough votes to move. We'll leave it open. Thank you.

Thank you. For any of the absent Members. I believe it's one. Mr. Vantes. Madam Secretary, would you run through the roll real quick while we ask for Mr. Garcia if he's going to come.

And add on the consent calendar? Cervantes. Cervantes. Aye. File item one, SB 269. Laird Cervantes. Cervantes, aye. File item two, SB 392. Bradford. Cervantes? Cervantes, aye. File item three, SB 430 Dodd. Cervantes? Cervantes, aye. File item four, SB 498 Gonzalez. Cervantes? Cervante, aye. File item six, SB 787, Dahle. Cervantes? Cervantes, aye. File item seven, SB 788. Ashby, I already have you on that one.

And that just to proceed and continue moving this forward, what I'm going to do is go to recess, allow the Members to return that need to add on, and then hand it over to Mr. Mathis, while I also leave to add and come back, and during that time, do the hearing on the compact. And then if I make it back on time, I'll go out of recess, back into adding, and if I don't make it, then Mr. Mathis would do it. Clear? So we're in recess.

All right, we're going to get moving on this hearing. I would like to take this opportunity to welcome you to today's informational hearing. The call number for public comments is 877-692-8957 and the access code is 18501100. This number can be found on the Committee's website and is displayed on your screens. For those calling in, please mute yourselves while in the queue to eliminate background noise. You will be placed in the queue until your opportunity to provide public comment.

When it is your opportunity to provide public comment, press one, then zero, and unmute yourselves. In order to speak, please be brief limiting your comments to your name, organization, and position on the compact. The two tribal state gaming compacts before us today were executed on March 30, 2023, and May 15, 2023, between Governor Newsom, on behalf of the State of California, and the Middletown Rancheria of Pomo Indians of California.

Today we will hear from the principal architects of the compacts, the Governor's office, and the chair of the tribe. The first compact that we are going to hear about is an extension to an existing 1999 compact between the tribe and the state. The new long term compact between the state and the tribe, which was signed on March 30, 2023, will supersede the extension once it becomes operative.

The compact authorizes a tribe to operate a maximum number of gaming devices located on eligible Indian lands held in trust for the tribe and located within the boundaries of the tribe's reservation. Under the compact, the tribe has agreed to pay the state its pro rata share of cost and the state incurs for the performance of its duties under the compact.

The compact requires the tribe to pay 14% of net wins to neighboring jurisdictions, public agencies, and local charitable organizations to mitigate impacts upon those entities resulting from the operation of the gaming facility. I am pleased to see that the compact mirrors many of the recent compacts that have come before this Committee in the area of meaningful consumer and employment protections, licensing and regulatory oversight. Once effective, the large compact will be in full force in effect for 25 years following the effective date.

I just want to remind all interested parties that no formal vote will be taken today. Today's hearing is for the Committee to be briefed on the content of the compact as they cannot be amended by the Legislature. Senate Bill 736 By Senator Mcguire is the ratification Bill of the two compacts before us today. At some point, SB 736 will be taken up for consideration by the entire body on the Assembly floor.

I would like to thank our witnesses in advance for taking time out of their busy schedules to be with us today. Without further ado, let's begin the hearing. And we will start with Nathan Vogel, senior advisor for tribal negotiations. Advisor for Governor Newsom will present first talk about the tribe's compact extension and the 25 year compact. Please begin. We're going to pause right now and go back to the previous session for an add on. Secretary, if you can call.

We got a gavel, and we're going to gavel back in out of recess. Secretary, will you please open the roll for absent Members?

SB 788. Ashby? Waldron? Waldron, aye. Yeah.

All right. We will now gavel back to recess for the normal Committee and gavel back in for the hearing. Please begin.

Thank you.

Thank you. I appreciate the chance to present to the Committee today. My name is Nathan Vogely. I'm the senior advisor for tribal negotiations for the Governor. I appreciate the chance to go over this new compact with the Metaltown Rancheria and also a short extension to the tribe's existing 1999 compact.

I'd also like to extend a special thanks to Tribal Chair Simon, who I think at this point may have appeared in more hearings with me than anyone else, so I appreciate his continued dedication to seeing this agreement through. By way of background, the federal Indian Gaming Regulatory Actor, IGRA authorizes a tribe to offer slot machines and other class three games that are permitted in the state if the tribe is negotiated. A class three gaming compact.

IGRA broadly limits compacts to subjects directly related to the operation of gaming activities, and class three gaming under a compact is limited to Indian lands. In 2000, California voters approved Proposition One A, which amended the California Constitution to permit tribes to operate slot machines, banking and percentage card games, and lottery games on tribal lands. The Governor is authorized to negotiate tribal state compacts subject to ratification by the Legislature.

Once a compact is ratified, it must be submitted to the Secretary of the US Department of Interior for a 45 day review. During that time, the Secretary can approve the compact, disapprove the Compact or not act on it, in which case it's deemed approved. An extension to a compact is effectively an amendment. For purposes of state law, the extension must be ratified by the Legislature.

However, unlike for other amendments or new compacts under federal regulations, an extension solely to extend the term of a compact does not require Interior's approval. As some of you may recall, the Governor and Tribe signed a compact in April 2021 that was intended to replace the 1999 compact that the tribe currently operates under. That 2021 Compact was disapproved by the Department of Interior. The Governor and Tribe revised the compact to address concerns, but that compact was again disapproved in 2022.

This new compact is modeled in part on the California compacts that Interior approved last year. Because the compact will require a 45 day review by Interior, there's not enough time for it to be approved before the tribe's 1999 compact expires on June 30. The extension to the end of 2024 is needed to avoid any disruption to the tribe's ongoing gaming activities. Once a new compact becomes effective, it will replace the tribe's 1999 compact.

Middletown Rancheria currently operates a single casino, but the compact would allow it to expand to two gaming facilities. It's a limited gaming tribe operating less than 350 slot machines. This entitles the Tribe to an annual distribution of 1.1 million from the Revenue Sharing Trust Fund. Under the new compact, the Tribe, at its current level of gaming, remains eligible for the $1.1 million distribution and for grants from the Tribal Nation Grant Fund.

If the tribe operates 350 or more slot machines up to the maximum of 1200 allowed under the compact, it will no longer be eligible for the $1.1 million distribution, but it also would not have any payment obligations into the revenue Sharing Trust Fund. The tribe committed to paying into the Special Distribution Fund its pro-rata shares of the state's regulatory costs as a limited gaming tribe.

However, Middletown's payment obligation may be reduced or eliminated entirely under state law when there are sufficient funds in the Special Distribution Fund. In recognition of its prior prepayment of fees for unused gaming device licenses, Middletown Rancheria's Compact provides for a credit against any special distribution Fund obligation that may become due. The compact includes standards for gaming regulation, licensing and gaming device testing and inspections. It also addresses health, safety and labor protections for employees and visitors.

Minors under 21 are not allowed to game or loiter in gaming areas and alcohol sales are subject to state laws. Middletown Rancheria committed to paying its employees at least equivalent to the state's minimum wage rate and to maintaining and complying with a tribal labor relations ordinance, or TLRO. The TLRO in this compact is the same as that in the prior two compact iterations and will replace the tribe's TLRO from its 1999 compact.

The TLRO takes effect when the tribe employs 250 people or more at its gaming facilities, not counting tribal Members. It includes various tribal commitments if a labor organization agrees to the terms of the TLRO as a bilateral contract. Because of the limited size of the tribe's gaming operation, the Governor and the tribe agreed to lower insurance amounts relative to the tribe's prior compact for torts and employment practices. Liability.

The tribe will be obligated to maintain a General liability policy of $2 million per occurrence and 5 million in the aggregate and a policy of 2 million per occurrence to protect against claims of employment discrimination, harassment or retaliation. Compact also provides the tribe greater discretion in establishing the procedures for any claims. Middletown Rancheria maintains a strong working relationship with its local community.

The tribe and the Governor agreed to local mitigation in this compact, similar to that approved by the Department of Interior for Tribal State Compacts in other states, no environmental review or intergovernmental agreement is required. Instead, the tribe will set aside one quarter of 1% of its net win into an impact mitigation Fund. It will be responsible for identifying impacts of the gaming facilities and mitigating those impacts through distributions from the Impact Mitigation Fund to local governments, emergency services and charitable organizations.

Finally, the compact includes a dispute resolution process to address any alleged breach and to enforce compact terms. The compact is structured to encourage good faith negotiations to resolve disagreements, but ultimately provides for court resolution if necessary. This compact is the culmination of extensive work by the Tribe and Governor's office to replace Middletown Rancheria's 1999 compact and facilitate the tribe's ongoing development. A short extension to the tribe's 1999 compact will ensure it can continue gaming until the new compact completes the required ratification and review process.

I'll be happy to answer any questions the Committee may have about the compact or the extension.

Okay, we're now going to move to Jose Simon III, Chairman of Middletown Rancheria of Pomo Indians of California. I believe he will be coming via Zoom.

Mr. Moderator thank you, Chair Mathis, and thank you, Committee Members. My name is Moke Simon, tribal Chairman of Middletown Rancheria. Been the Chairman since 1997, had an opportunity to work on the first compact in 1999, signed there at the Governor's office with Governor Gray Davis.

I want to thank the Governor's office and Nathan Vogeli for continuing to be resilient through this process as we update our compact and also with the offering of the extension to make sure that there is no disruption with the Middletown Rancheria's gaming operation, Twin Pine Casino and Hotel, which will be celebrating its 30th year of operation next year.

As we move through this process, we have hit a couple of hurdles at the federal level, but we're back at the table here with a negotiated agreement that is more resilient than it's ever been. It gives us the opportunity as a tribe to not only continue providing job opportunities here in our local community, both to our tribal Members and our surrounding community, but it also gives us the operations or the opportunity to continue our good banking relationships that we currently have with our current lenders.

As we move through the finalization process to get this approved at the federal level, I want to thank each and every one from the governor's office that has helped. The Middletown Rancheria is a Member of 256 tribal Members. We are Pomo Indians, Lake Mewk and Wintoon. We are located in the South Lake County. County of Lake. We are a very rural community, but we are a very strong community.

Over the past decade, we've encountered over 18 different disasters, most of them fires and one flood, and we continue to move forward with just a community minded base to build our business. This agreement will allow the Middletown Rancheria to continue its gaming operations through 2048 and continue with the positive movement to secure the next seven generations, economically, culturally and physically for my tribe.

Not only the Middletown Rancheria not only looks at itself as an independent government in the United States, but also here in the State of California, of being a responsible community Member and providing safe haven during disasters for our surrounding community, but also allows us to be an educator on the thousands of years of the native people that have lived in this state. The relationship that has been built with the Middletown Rancheria and the State of California through the governor's office continues to grow.

And this is one more agreement that not only says talks of equality and inclusion, but proves that the State of California is moving forward with that mission. I want to thank you, as the tribal Chairman for the opportunity to address you today, but also let you know that Middletown Rancheria is resilient.

And the third effort coming in before you hopefully shows that we are a community that wants to just keep building in our small local area, but also continue the collaboration with all of our state leaders, county leaders and communities surrounding us. I sat here not only as the tribal Chairman, but also the first Native American elected to the Board of Supervisors in Lake County. So we'll continue along this journey with the cooperation we've had with the State of California.

And I just want to thank you very much. I know there is not a vote going to happen today, but I will encourage you, when it does hit the floor, that a positive vote on SB 736 gives us an opportunity to move forward with our combat here in the State of California. So, thank you very much for the time and consideration today's hearing. Thank you.

All right, thank you. Any comments from the Members on dice?

Thank you, Mr. Chair. Thank you, Chairman Moke, for bringing this forward the third time in front of us. The resiliency of your people, our people, continues to shine. And I just want to encourage those, when they look at the tribal compact, to see more than just a gaming aspect to it, that this is years of atrocities, of genocide, and also the resiliency of our people to continue to move forward and move our people forward. This is far more than just a gaming compact.

This is the State of California making amends for a past historical treatment towards Indian people. So I just want to thank you and continue to be supportive of you and for the county Board of Supervisors that you sit on. We just think that you're doing a great job here in Indian country. Thanks, Chairman.

Thank you, Ms. Aguiar. Curry?

Yeah. Good afternoon, Moke. This is Cecilia. So nice to see you. I have to agree with my assemblymember, Ramos. The fact of the matter is that you're more than a gaming casino. What I've learned through all my years of working with you is we have a partnership, and we've always been able to depend upon you through all of our tragedies and our fires. So, I want to thank you again for your service to your county, as well as to the tribe.

And I look forward to this moving forward for all of you.

All right, thank you very much, Cecilia. I want to thank you for all the cooperation, not only for the Middletown Rancheria, but also Lake County and also Senate Mcguire. You guys are rock stars. So thank you very much.

All right, any alibis? Seeing none. We will go to public comment. There's nobody in the room. Mr. Moderator will go to the phones. Chair.

There is no one. All right. Well, with that, thank you all for being here, Mr. Vogel and Chairman Moke. And with that, we'll call this hearing to a close.

Thank you, Kawika. Thank you.

And we continue to recess for. We're good with the add ons. So in that case, we will go ahead and close the normal hearing for Geo today as well. Adjourned.