Assembly Standing Committee on Governmental Organization

Thank you, everyone. The Assembly Governmental Organization Committee is called to order. I am Assemblymember Blanca Rubio, Chair of the Assembly Committee on Our Governmental Organizations. I would like to take this opportunity to welcome you to today's informational hearing.

The four tribal state gaming compacts before us today were executed between the Governor, between Governor Newsom, on behalf of the State of California and each federally recognized tribe. Today we will hear from the principal architects of the compacts, the Governor's office and the tribes themselves.

These negotiated compacts are the culmination of a lengthy negotiation process, compromises and careful consideration of requirements under the Indian Gaming Regulatory Act. I am pleased to see that the compact of the 25 year variety mirrors many of the recent compacts that have come before this committee in the area of regulatory oversight, labor and health and safety standards.

Additionally, two of the compacts have been revised to align with more recent agreements, thereby mitigating the risk of further litigation. In light of the Ninth Circuit's decision on the Chicken Rancheria versus the State of California. I just want to remind all interested parties that no formal vote will be taken today.

Today's hearing is for this committee to be briefed on the contents of the compact as they cannot be amended by the Legislature. AB 5- 1527 and SB 864 are the ratification bills for these four compacts. At some point, these ratification bills 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. We will first be briefed on the Shera Heights Indian Community of the Trinidad Rancheria Compact. And I would like to welcome Matthew Lee, senior advisor for tribal negotiations for Governor Newsom. Mr. Lee, welcome.

Appreciate this body's time during such a busy time of year. Thank you. Honorable Members, representatives of tribal governments and other Members of the public. Just to very briefly set the table to build on exactly what you just identified.

The framework here for these tribal state gaming compacts is set out by a federal law called the Indian Gaming Regulatory Act. Under that federal law, we can't just bargain for anything. In one of these compacts, there is a specific list of seven topics that are permissible subjects of negotiation.

And if we fail to bargain in good faith, the state exposes itself to the risk of potential litigation. And if that lawsuit is successful against us, the state can ultimately forfeit any regulatory role. We've recently seen that play out in the context of the case you identified, Madam Chair.

A case called Chicken Ranch that clarified that the state fails to bargain in good faith when it bargains for topics far outside that list of seven permissible topics.

So just to briefly set the table and provide some of that additional background, anytime we're in any of these negotiations, we are very, very careful to make sure that we are within the contours of those seven permissible topics, especially as they've been clarified since Chicken Ranch.

With this particular compact, I'm very pleased to say that we were able to do that and that the tribe and the state were able to reach an agreement. That agreement, as you correctly identified, is consistent with other recent compacts that this body has seen. 1200 gaming devices at up to three facilities.

Key terms to protect workers, including a tribal labor relations ordinance. Terms requiring the tribe to pay covered employees state minimum wage, protecting workers from harassment, retaliation and discrimination. There are terms to make sure that the state recovers its regulatory costs and also revenue sharing terms to address potential local impacts if the tribe operates more than 350 devices.

Happy to answer any questions or unpack any of those, but that is the short version that is consistent with other compacts that this body has already seen.

Thank you. Anyone in the audience in opposition? Okay. Any others in support? Any public comment? Okay. Hearing none. Thank you. Really appreciate the- the groundwork. I know we have three additional ones and so I know you've briefed us on this, so we'll move on to the next compact.

The next one is the Fourth Amendment to the tribal state compact between the State of California and the Picayune Rancheria of Chukchonsi Indians of California. Thank you.

Thank you again, Madam Chair. Just to go back to what I mentioned a moment ago about how if the state and the tribe fail to reach an agreement, they can wind up in litigation. Unfortunately, that's what has happened here. The state and the tribe are currently in federal court in the Eastern District of California.

While that lawsuit plays out in an orderly way, we don't intend to jam our counterparty and we certainly don't intend to jam the federal court. So we are coming here with an extension to the existing compact to preserve the status quo while that lawsuit plays out.

It also includes now the state's standard off track wagering appendix as well.

Thank you. Any questions? Any. Anyone in opposition? Anyone in support? Any public comments? Any questions from the committee? Thank you, Mr. Lee. Okay, next. Next we have the First Amendment to the tribal state compact between the State of California and the Pinoleville Pomo Nation of California. Mr. Lee.

Thank you again, Madam Chair. This is an amendment to update a compact that was originally negotiated in I believe 2011, taking effect in 2012. The tribe has never gained under this compact. As I understand it, the tribe is getting closer to actually operating a casino.

And as we went back and collectively looked at this compact, we realized that it was perhaps out of date compared to the existing state of the law in this area and to the state's more recent compacts.

So we were able to very grateful to the tribe for coming together with us in a collaborative spirit to essentially update this compact to bring it into line with the current State of the law and our more recent compacts.

What that looks like in concrete terms is there are certain terms that Chicken Ranch specifically said we can't bargain for in a compact. Things like onerous environmental review provisions, family law requirements, excessively broad tort requirements, things like that.

So we have updated those terms by deleting the compact's environmental review provisions, deleting the family law requirements and substantially narrowing the tort protections for casino patrons required under this compact. We also updated the compact's revenue sharing terms to be more in line with our recent compacts.

What that means concretely is there is one fund called the special distribution fund that the tribe pays into on a pro rata basis based on the number of gaming devices it operates that is meant to chiefly defray the state's regulatory costs.

The tribe also agreed to pay into an impact mitigation fund similar to Trinidad if it operates over 350 devices to mitigate impacts to local governments. And then finally there was a very in the weeds financial reporting, financial source disclosure provision that our more recent compacts exempt tribal governments as well as other governments.

And we have also updated that here. So the short version here is that we have updated this 15 year old compact, 14 year old compact to be more in line with more recent compacts that this body has seen.

Thank you very much. Any questions or comments from the public? Anyone in opposition? Any others in support? Any questions from the committee? Thank you. Thank you. Then the next and last one, we do have someone testifying.

So we have the first amendment to the tribal state compact between the State of California and the Sycuan Band of Kumeyaay Nation. Mr. Lee will go and then Mr. Cody Martinez, the Chairman of Sycuan Band of Kumeyaay Nation will be on Zoom. Thank you, Mr. Lee.

Thank you. Thank you again. Madam Chair. This is a situation where going back to the ninth circuit's decision in Chicken Ranch after that decision, I think it is natural and understandable for the state and tribal governments to not necessarily always agree about precisely what that decision might mean for their specific compact.

Against that backdrop, I'm very grateful to the tribe and to Chairman Martinez because as a result of a collaborative dispute resolution process, we were able to reach an agreement about how to amend this compact in light of Chicken Ranch, broadly similar to some of the amendments I mentioned to Pinoleville and that the core Chicken Ranch topics, those four topics I mentioned, environmental review and family law, are out and the scope of torts and the related scope of gaming facility are substantially narrowed.

In addition to that, as part of our collaborative resolution of this potential dispute, the tribe agreed not to challenge certain compact provisions even in future litigation. Those are certain definitions in the compact's revenue terms.

The state, for its part, agreed to an extension of the compact through 2060, which I believe, if I'm getting my dates right, is a 20 year extension beyond the current end date.

The state also agreed that if the state ever legalized new forms of Class 3 gaming, that it would bargain in good faith to address those new forms of Class 3 gaming. That is also a term that it is is in many of our more recent compacts, but was not in this one.

So just want to express my gratitude to the tribe and to Chairman Martinez for having reached this agreement. Happy to answer any questions.

Thank you. Can we put Mr. Cody Martinez, the Chairman, on Zoom, please?

Can you hear me?

Yes, we can. There you go. And we see you too.

Thank you. Good afternoon, Madam Chair, Members of the Committee. My name is Cody Martinez. I'm the elected Chairman of the Sycuan of the Kumeyaay Nation in eastern San Diego County.

I would like to take a brief time to make brief comments before the committee today and start by thanking everyone for their time this afternoon. We would also like to thank the governor's office and Mr. Matthew Lee for working with the tribe during this process of negotiations for our new amended compact.

The Sycuan Tribe collectively employs over 3,000 people in our region, with over 90% of our team members being none Indian. This November, we celebrate 42 years of Indian gaming operations, beginning with high stakes Indian bingo in the year 1983.

Sycuan was a pioneer in this industry and we feel that our operation is a model of success for the Indian Gaming Regulatory Act. With the support of the Legislature, the Sycuan Band is looking forward to continue to operating our casino resort for many more years to come.

Again, I want to thank you for your time for allowing me these brief comments. Thank you.

Thank you, Mr. Chairman. Any others in the audience in support? Anyone in opposition? Any additional comments or any questions from any member of the committee? Okay. Hearing none. I thank you, Chairman, for your brief presentation. If there's no other comments, then we'll go ahead and adjourn. Thank you.