Senate Standing Committee on Governmental Organization

Good morning, Mr. Chairman and Committee Members. My name is Nathan Voegeli. I'm the Senior Advisor for Tribal Negotiations for the Governor. I'd like to start by thanking Graton Rancheria Tribal Chair Sarris and the tribal team that worked to negotiate this new compact with Graton Rancheria. Before going over the specific terms of the compact, I'll give a brief background on the tribal state compacting process, the Federal Indian Gaming Regulatory Act. Or IGRA, authorizes a tribe to offer slot machines and other class three games that are permitted in the state if the tribe has negotiated a class three gaming compact. IGRA broadly limits compacts to subjects directly related to the operation of gaming activities. Class three gaming under a compact is limited to Indian lands. California voters in 2000 approved Proposition One A amending 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 a tribal state compact subject to ratification by the Legislature. Once ratified, a compact 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 is deemed approved. In 2021, the Secretary disapproved three compacts in California. Then again in 2022, the secretary disapproved two compacts. A week later, the 9th Circuit Court of Appeals issued a decision in Graton Rancheria v. California that held that the state failed to negotiate in good faith with the plaintiff tribes by seeking certain provisions related to environmental review, family law and torts. The state worked with two tribes to address these issues, and in November 2022, the secretary affirmatively approved those two tribes compacts. The Graton Rancheria Compact, before the Legislature for ratification will replace the tribe's initial gaming compact. Signed in 2012 and amended in 2017, the Graton Rancheria Compact reflects the government to government nature of the tribal state relationship and the tribe's existing positive relationships with local governments and organized labor. It is also consistent with the two California compacts approved at the end of last year by the Department of Interior. The compact term is for 25 years and includes force majeure, language to address reduced operations or closures from pandemics, wildfires and other events outside of the tribe's control. The tribe has the right to negotiate an amendment if tribes in California gain the right to operate a new form of class three gaming or lose their exclusive right to operate gaming devices. Graton Rancheria's 2012 compact authorized the tribe to operate up to 3000 gaming devices at a single facility. The new compact allows for expanded operations up to 6000 slot machines at two gaming facilities, only one of which can operate more than 50 devices. The tribe will reimburse the state its pro rata share of the state's regulatory costs through payments to the special Distribution fund. It also agreed to contribute an additional $500,000 to the special distribution Fund. If the balance after five years is insufficient to reduce or eliminate payments for limited and non-gaming tribes, the tribe will continue contributing revenue to the Revenue Sharing Trust Fund, or RSTF. The RSTF is the primary source of revenue for an annual $1.1 million disbursement to each limited and non-gaming tribe in California. Excess RSTF funds are granted to tribes statewide through the Tribal Nations Grant fund. As the tribe operates more devices, it contributes a greater amount to the RSTF. It will pay 8 million into the RSTF each year. It operates under 3000 slot machines, increasing to 11 million when operating over 5000 gaming devices. In addition, the state and the tribe agreed to supplementary payments by the tribe into the RSTF. This amount will be distributed on a pro rata basis to non unlimited gaming tribes. In addition to the existing $1.1 million disbursements. The amount Grate in Rancheria contributes will vary based on the number of slot machines it operates. If it operates over 3000 slot machines, it would annually contribute $500,000, ranging up to $7 million if it operates over 500 machines. This voluntary distribution is specific to Graton Rancheria. It'll help bolster the RSTF base funding for tribes while ensuring that the Tribal Nations Grant Fund continues to support specific tribal priority projects. The compact includes standard controls for fair play, honesty and the integrity of gaming operations. These include facility and employee licensing, gaming device testing and inspections, and tribal gaming regulations with internal control standards. The tribe will operate under its California Department of Alcoholic Beverage Control licensing requirements, and minors under 21 are prohibited from gaming or being in areas where alcohol may be consumed. The tribe also committed to providing a nonsmoking area and state of the art ventilation for any significant renovations to the casino. Graton Rancheria's compact includes standards for patron disputes, torts and employment discrimination comparable to the two prior compacts approved by the legislature and the Department of Interior. These provisions ensure the tribe maintains principal responsibility for developing its own administrative and legal procedures. Employment discrimination standards extend to all classes protected in California and the tribe will maintain a general liability insurance policy of at least $10 million to address tort claims of patrons and others lawfully on the premises. Additionally, the tribe commits to ensuring minimum wage rates at least as stringent as California's and to maintaining and complying with the Tribal Labor Relations Ordinance, or TLRO. The TLRO functions as the mechanism for a bilateral contract between the tribe and a labor organization, with corresponding commitments by each. Recognizing that the tribe already has an agreement with the labor organization that is enforceable under the Federal Labor Management Relations Act, the tribe is able to maintain the same TLRO as under its 2012 compact. Relative to the two compacts approved last year by the Department of Interior, there has been one key change that I'd like to highlight the tribes for. The two prior approved compacts had preexisting intergovernmental agreements with their local counties to mitigate and compensate for impacts of the gaming facility. In approving one of those compacts, the Department of Interior cautioned against an agreement being a precondition to compact to negotiations. Consequently, the state and tribe looked to compacts recently approved by Interior in other states as a guide. The tribe agreed to annually distribute 2% of its net win to neighboring jurisdictions to mitigate impacts from the gaming facility. The tribe will be responsible for distributing these funds. Finally, the compact is structured to encourage good faith negotiations to resolve disagreements through a meet and confer process. Arbitration or litigation are available, however, if the dispute resolution process is not successful. In conclusion, the state and the tribe work together to negotiate a compact that ensures the tribe and its members are the primary beneficiaries of its gaming while also addressing issues in the Graton Ranch decision. Mitigating impacts to local communities and supporting tribes with smaller or no gaming operations. Thanks for your time and I'll be happy to answer any questions.

Thank you. Mr. Voegeli, any questions for members? I think that report was very complete. Thank you very much.

Thank you.

Appreciate it. Now we're going to move on to Chairman Greg Sarris, Chairman of the Federated Indians of the Graton Rancheria, who I believe is on Zoom. There he is. Welcome, Mr. Chairman. Thanks for tuning in this morning.

Good morning, Senator Dodd. And before anything else, thank you. And thank you all the members of the Senate GO Committee for providing me and my team this opportunity to talk to you this morning. We truly appreciate it. I am Greg Sarris, chair of the Federated Indians of Graton Rancheria. The Federated Indians of Graton Rancheria are descendants of coast Mewk and Southern Pomo people. Southern Pomo from southern Sonoma County and Coast Mewalk. From all of what we know today as Marin County, we are a tribe of a little over 1500 people. Now, all of us are the descendants of 14 survivors of a population that was once 20,000. Each of those 14 survivors was a woman who was a concubine or wife of one of the early Americans. Our history and survival is remarkable. We were illegally terminated as a tribe in 1966. We were given a rancheria or a small 15 acre plot for the so called Homeless Indians. In 1910, as a result of the California Indian Rancheria Act, the California Indian Rancheria Termination Act resulted in us illegally being terminated, not by the terms, the policy that actually was created by the federal government. I began a battle leading the tribe in 1992 to get our US. Restored. President Clinton signed our restoration bill acknowledging the wrong on the part of the Federated, the federal government, december 27, 2002, weeks before he went out of office. We looked for different ways to become economically self sufficient. We looked for two years. We weren't interested in particular in gaming. We're going to try anything we could. But of course, part of the restoration bill said they didn't give us land back. So as you know, Marin County and Senator Dodd, you certainly know this in Marin, Napa, Sonoma County, the land is very expensive. So we began to discuss the "C" word, not cancer to casino. And we pursued. And then in 2010, we were able to get some land into our land, current land reservation into trust. 2012 we got our first compact, which was just alluded to by Nathan Voegeli. And through we opened the casino in 2013. And one of the things we said all along, which is important, is that we weren't going to go down this road unless the casino resort could be something that could benefit Indian and non-Indian alike. And to that effect, our 2012 compact was the most generous of its kind in history at that time. The first, in fact, to fund the Tribal Nation's Grant Fund. We opened the casino and we went union right away. One of the first casinos. Today we have over 2000 team members, all of whom get the Kaiser Gold Cadillac plan. They pay nothing out of their paycheck for full coverage, including dental and vision. We believe in dignity in the workplace. We have literacy programs, Spanish to English programs, English to Spanish programs. All of our people, anybody working for us that doesn't have full citizenship, we take care of them, pay for and walk them through the citizenship process. We're proud of what we do. In addition, we have been incredibly generous to the local communities. We have contributed in mitigation funds to the City of Rohnert Park just in the last nine and a half years, $117,000,000, and to the Sonoma County over $90 million. Charity is another thing where we, to date, have given over $80 million to our various causes in terms of social justice and environmental stewardship, including $2.5 million a year in perpetuity to the University of California so that all California Indians, whether they be from federally recognized tribes or non federally recognized tribes, can go to UC tuition free. We've given 15 million to create an endowment for new scholars in the law school at UCLA who would be pursuing an interest in Indian law and endow additional 4 million to endow for two chairs there in the UCLA Law School. Further, we have given just about $6 million to the Smithsonian Museum, the National Museum of the American Indian, to establish templates to teach American Indian culture and history in grades K through twelve, available in all public schools and public libraries. We continue to give and do set precedent kinds of opportunities for all people. We have created precedent setting comanagement agreements with the local governments for parks, and most recently, the National Park, Point Reyes National Seashore. We created a precedent setting comanagement agreement. Today we're coming to you because we're planning to expand our facility to make room for more additional machines. And again, once again, as in 2012, we are especially proud of being generous in our approach to working with the state, working with our local communities, and we're especially proud once again of doing something that's precedent-setting in a compact. We are the first of its kind to do a supplemental revenue-sharing trust which will provide much-needed additional support to the non-gaming and limited gaming tribes in the state. We really believe that what is very important for us that have the opportunity to take care of those tribes, our brothers and sisters who don't have the opportunity. To that effect, I might just add a footnote here that the non gaming tribes in Sonoma County, Kashia Rancheria and Cloverdale, we give each of them an additional $3 million a year. And we will looking forward to continuing to invest in our community and for the welfare of all, continuing our legacy of having a business that benefits Indian and non-Indian alike. In conclusion, when we began this journey on the casino, Sonoma County, much of Marin County were very adamantly opposed to the idea of an Indian casino in this community. There was a pretty heated battle at the time of the last compact, if any of you were around to remember. But I'm happy to say that just last month the Press Democrat issued a news story outlining in detail the benefits that the Graton Rancheria has benefit that we have been to the local community, our generosity and the extent to which we've been a good neighbor and have lived up to all of our commitments in terms of mitigation. And of course we will plan to do so. I believe we've been a model tribe. We've created a model business and we're proud of our compact at this time and especially proud of our good relationship with our local governments and with the State of California. And I thank you again for the time and the opportunity to speak this morning.

Thank you, Mr. Chairman, members, anybody wishing to speak? We don't have anybody. Your testimony was very clear and concise. I would label it as promises made, promises kept from your last compact and we really appreciate that. And I know the answer to this because I've talked to you before about this, but I think my colleagues probably would be interested in your response. You were the first tribe to have the TNGF language in the compact and now you're committed to paying more to help limited and non gaming tribes. You mentioned a little bit about it, but what really is at the end of the day, your thought process on how that would work and what that would mean for those tribes that you're supporting.

Thank you very much, Senator Dodd, both for the question and the thoughtfulness that's inherent in your question. First of all, as I alluded to earlier in my brief talk, we feel it's so important. There are tribes for many reasons. There are tribes in rural areas that do not have the opportunity or if they are to game or if they are gaming, do not have access to the population base such as we do, such as Graton does, our proximity to the Bay Area. So what are we going to do? Equity is a very important thing. What are we going to do to take care of those people? What's the state going to do? How can we help the state make sure that all Indian people can have the opportunity or the finances to be self-sufficient and have some agency in their lives and in their tribal governments. So here I think this is an opportunity for the state. And again, I want to be careful because I'm not sure that all tribes will totally agree with our generous notions. I'm sure you're laughing. I'm walking on eggshells here, Senator Dodd, but I think it's really important that again, the State and working with the State, that we figure out how these, in what ways these funds can be dispersed to these tribes and under what terms. I mean, again, that's something between the state and perhaps us, but that's something ultimately that the state will have to work out. The most important thing, Senator Dodd, I think here to answer your question, is that Graton is here to provide the resources so that that can first begin and set a model for what others may do.

Well, thank you very much, Mr. Chairman. As a point of personal privilege, since you're in my district, I can say that we're proud to have you and proud of the work that you're doing. And also it means a lot that you're looking out for those people in your community around the state that are less fortunate. Appreciate it very much.

Thank you, Senator Dodd.

So with that now we're going to move on to Mario Yedidia, the Western Regional political director for Unite Here. Good morning. Please feel to begin when you're ready.

Thank you. Honorable Chairman Dodd. Good morning. Good morning, members. Good morning to Chairman Sarris and Mr. Voegeli from the governor's office. Thanks for this brief opportunity to address you. Yes. My name is Mario Yedidia. I'm the Western Political Director for Unite Here, the Hospitality workers union in the United States and Canada. We represent 300,000 people. Our members are overwhelmingly people of color, women and immigrants. In California, we're proud to represent over 6000 workers in ten different casinos where collective bargaining agreements ensure dignity, respect fair wages and benefits. And today we are proud to enthusiastically support this compact between the state of California and the Federated Indians of the Graton Rancheria. We're proud to represent the workers at Graton. We deeply value our relationship with the tribe and we thank the Governor's Office for negotiating this compact and we're asking the Legislature to approve it without delay. Thank you, sir.

Thank you. Mr. Yedidia, any questions or comments? Seeing none now, we will bring this discussion back to the members before we adjourn this part of the hearing for the Graton Rancheria. No comments. Go ahead. Yes, Senator Alvarado-Gil.

Yes, I feel very fortunate to be here today and be able to see the evolution of the Graton Rancheria. So as a former resident of Sonoma County and seeing Graton come in to the city of Rohnert Park and the County of Sonoma, and I just want to underscore what Chairman Dodd said is promises made. Promises kept to see over a decade of the work that Chairman Sarris has done with the community and really help to elevate Sonoma County and the surrounding areas, everything from addressing some of the concerns from the residents around crime, around traffic. I just think the Chairman Sarris has been exceptional in that and as the Rancheria has as well. So I'm very happy to be able to see the full evolution here and support this compact as well. Thank you.

Thank you, Senator. Okay, we're going to move on to any witnesses wishing to come forward now in room 1200 right here. Seeing none, we'll move to the witnesses waiting to provide public comment via the teleconference service. Moderator good morning. If you please prompt individuals waiting to be heard their public testimony this morning.

If you'd like to speak at this time, please press one, then zero on your telephone keypad. Once again, if you'd like to take the opportunity at this time, please press one and then zero on your telephone keypad. And currently, we are showing no lines in queue.

Okay, great. That concludes our informational hearing on the Graton Compact. Chairman Sarris, I wish you the best of luck on your Compact, and thank you for testifying today. Now we'll move on to thank you. Now we'll move on to the Middletown Compact. Mr. Voegeli. Once again, welcome. Feel free to begin.

Thank you, Mr. Chairman. Before I go over this compact with the Middletown Rancheria, I want to thank Tribal Chair Simon and his negotiation team for all their work on this and a couple prior iterations. Since I provided background earlier on the Indian Gaming Regulatory Act and the Graton Rancheria Compact. Specifically, I'm going to focus on the particular provisions here for Middletown Rancheria that differ from those from the Graton Rancheria Compact. As some of you may recall, the state and Middletown Rancheria signed a compact in April 2021 that was intended to replace its 1999 compact that the tribe currently operates under. That compact was disapproved by the Department of Interior. The state and tribe revised the compact to address concerns Interior had raised, but that compact was again disapproved by Interior in 2022. This new compact is modeled on the California compacts that Interior approved last year and also addresses the issues raised in the 9th Circuit Chicken Ranch decision that I mentioned earlier. As an initial matter, Middletown Rancheria is a limited gaming tribe. That means that it operates less than 350 slot machines. This entitles it to the annual distribution of 1.1 million from the revenue-sharing trust fund. The tribe's new compact maintains the tribe's eligibility for this distribution and for grants from the Tribal Nation Grant Fund if it operates under 350 devices. If the tribe operates 350 or more slot machines up to the maximum of 1200, it will no longer be eligible for the $1.1 million distribution. But it also would have no obligation to pay into the revenue-sharing trust fund. The tribe currently operates a single casino, but the compact would allow it to expand to two gaming facilities. Middletown Rancheria committed to paying into the special distribution fund its prorata share of the state's regulatory costs. In recognition of its prior prepayment of fees for unused gaming licenses, Middletown Rancheria's compact provides for a credit against its special distribution fund obligation. In addition, as a limited gaming tribe. Its payment obligation may be reduced or eliminated entirely when there are sufficient funds in the special distribution fund, Middletown Rancheria committed to paying its employees at least equivalent to the state's minimum wage rate and to maintaining and complying with the Tribal Labor Relations Ordinance. The TLRO in this compact is the same as that in the prior two compact iterations for Middletown and will replace the tribe's TLRO from its 1999 compact. The TLRO takes effect when the tribe employs 250 or more people at its gaming-related 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 state and tribe agreed to lower insurance amounts for torts and employment practices. Liability the tribe will be obligated to maintain a general liability policy for $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. As for the Graton Rancheria Compact, the local mitigation component of Middletown Rancheria's Compact resembles that approved by the Department of Interior. For other tribes, 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 its gaming facilities and mitigating those impacts through distributions from the Impact Mitigation Fund to local governments, emergency services, and charitable organizations. I'll end by noting that this compact is the culmination of extensive work by the tribe in the state to replace Middletown Rancheria's 1999 compact and facilitate the tribe's ongoing development. I'll be happy to answer any questions about it.

Thank you very much. Mr. Voegeli, any questions or comments? Seeing none from the panel, we appreciate your time.

Thank you, Chairman.

Thank you. We'll now move on to Chairman Jose Simon III, chairman of the Middletown Rancheria Pomo Indians, who I believe is on Zoom. Let me just tell the members here, Mr. Chairman also is a public servant in Lake County who serves on the County Board of Supervisors for Lake County and a good friend. And Mr. Chairman, it's nice to see you again. Please feel free to begin.

Good morning, Committee Members and Committee Chair Dodd. Yes, good to see you again. And just to follow up on that, the first Native American elected in Lake County's history to a county office. So very proud to represent our tribal folks here in Lake County. But I want to thank you this morning for taking the time to hear about the Middletown Rancheria's Compact. Mr. Voegeli did an excellent job of walking through the process that we've been through over the past two years, and I want to thank the Governor's Office and his negotiating team for being so amenable to working through this even during some of the pandemic times. The Middletown Rancheria is here on its third iteration of our compact. We worked hard to make sure that the third time is the charm and we're going to move through this process and hopefully get the support of everyone on the Committee and the Legislator as we move forward. I was the chairman in 1999 which signed the original compact and we have made a lot of strides as a tribal organization here in our local community. We not are only one of the largest employers in South County, but we are also committed to always helping our surrounding communities by donations, fire department, sheriff department and many other organizations as we move forward, especially focusing on our local high school and education here in our local environment. Our Middletown Rancheria is located in the south end of Lake County. We have 267 tribal members. We are a tribe that has been established basically since time memoriam about 12,000 years. It can be traced back in the southern Lake County area. We create jobs, we try and fund economic development for the tribal membership, bring programs such as insurance, elder programs, education and others to our tribal membership. As we use our gaming funds, our government gaming funds to move the tribe forward. The negotiations will allow the Middletown Rancheria to do some expansion that is much needed here. It will allow us to have a solidified 25 years so we can negotiate with our banking partners as we move our property forward and create more jobs and opportunity in south Lake County. Today, we are looking to diversify not only in the gaming industry but also on the tribal side with this compact moving through the process and being approved by DOI, the Department of Interior, and we appreciate all the partnership that we have across Indian country. Just as our former great and chair said, there are large tribes and small tribes in this state and I know that we do a good job working together. I want to thank Chairman Sarris for the work that they will be doing going forward, helping smaller tribes move their tribes forward and help their people. But the Middletown Rancheria cannot express the thanks from the Governor's Office in working through this process to help to get us to this point. Today is a good day. I want to thank all the committee members and I'll be prepared to answer any questions that may be asked to me. So thank you very much, Senator Dodd.

Thank you, Mr. Chair. Any questions or comments? All this testimony has been very complete. We really appreciate all you've done and I will suggest to you that we hope that the third time is a charm as well. Thank you very much for being here. We're going to move now is Mr. Yedidia. He won't be speaking on this issue here. So what we're going to do is begin with any witnesses here in the room. Seeing none. Moderator can we please check, open the lines and see if anybody's wishing to testify?

And once again, if you'd like to testify at this time, please press one, then zero on your touchstone phone. Again, the one, then zero. If you'd like to take this opportunity to testify. And once again, we're showing no lines in queue.

Thank you. Moderator having heard all the public testimony, members, are there any final questions or comments? Seeing none. That concludes the informational hearing on the Middletown compact. I want to thank Chairman Simon for being here and wish you the best of luck with your compact.

Thank you, Chair Dodd.

Thank you. Thank you for all the individuals who called in. Well, there was no individuals that called in to participate. I'm all on script here, though. If you were not able to testify via the teleconference service, please submit your comments or suggestions in writing to the Senate Governmental Organization Committee. Thanks everybody here for your patience and cooperation. We have concluded the agenda. The Senate Governmental Organization Committee is adjourned.