BILL NUMBER: SB 621 CHAPTERED 10/12/03 CHAPTER 858 FILED WITH SECRETARY OF STATE OCTOBER 12, 2003 APPROVED BY GOVERNOR OCTOBER 11, 2003 PASSED THE SENATE SEPTEMBER 12, 2003 PASSED THE ASSEMBLY SEPTEMBER 12, 2003 AMENDED IN ASSEMBLY SEPTEMBER 12, 2003 AMENDED IN ASSEMBLY SEPTEMBER 12, 2003 AMENDED IN ASSEMBLY SEPTEMBER 9, 2003 INTRODUCED BY Senators Battin and Burton (Principal coauthor: Assembly Member Jerome Horton) (Coauthors: Senators Ducheny and Hollingsworth) (Coauthors: Assembly Members Cohn, Benoit, Bogh, Dymally, Chavez, Frommer, Garcia, Longville, McCarthy, Plescia, and Reyes) FEBRUARY 20, 2003 An act to amend Section 12012.85 of, and to add Chapter 7.5 (commencing with Section 12710) to Part 2 of, the Government Code, relating to gambling, and making an appropriation therefor. LEGISLATIVE COUNSEL'S DIGEST SB 621, Battin. Indian gaming. (1) Existing law creates in the State Treasury the Indian Gaming Revenue Sharing Trust Fund and the Indian Gaming Special Distribution Fund for the receipt and deposit of moneys received by the state from Indian tribes pursuant to the terms of those gaming compacts and authorizes moneys in those funds to be used for certain purposes. This bill, until January 1, 2009, would establish the method of calculating the distribution of appropriations from the Indian Gaming Special Distribution Fund for grants to local government agencies impacted by tribal gaming. The bill would require a County Tribal Casino Account, as defined, to be created in the State Treasury for each county that contains a tribal casino, which would be funded according to a specified method. The bill would require the State Controller to divide the county tribal casino account, as specified, into individual tribal casino accounts, as specified. The bill would create in each county where Indian gaming is conducted an Indian Gaming Local Community Benefit Committee, as specified, to select grants projects, pursuant to certain grant application policies and procedures, and would require that the grants be administered by the county. By placing additional duties on the counties, this bill would impose a state-mandated local program. The bill would establish a set of priorities for the receipt of grant money. The bill would require that grants be affirmatively sponsored by a tribe paying into the Indian Gaming Special Distribution Fund, as specified. The bill would require an Indian Gaming Local Community Benefit Committee to submit to the Controller a list of approved projects, upon which the Controller would release the funds directly to the chosen local government entities. The bill would require counties to report to the Legislature regarding the use of grant moneys. By placing additional duties on the counties, this bill would impose a state-mandated local program. The bill would require the State Auditor to conduct an audit of the allocation and use of moneys from the Indian Gaming Special Distribution Fund. The bill would appropriate $25,000,000 from the Indian Gaming Special Distribution Fund to the Controller for distribution, pursuant to its provisions, to local government agencies impacted by tribal gaming. (2) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement, including the creation of a State Mandates Claims Fund to pay the costs of mandates that do not exceed $1,000,000 statewide and other procedures for claims whose statewide costs exceed $1,000,000. This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to these statutory provisions. Appropriation: yes. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. The Legislature finds and declares all of the following: (a) Pursuant to the tribal-state gaming compacts, only 28 tribal governments pay into the Indian Gaming Special Distribution Fund based on the number of gaming devices operated on September 1, 1999. (b) A county system of grants, based on the proportionate share that those 28 tribal governments actually pay into the Indian Gaming Special Distribution Fund, is the most efficient and fair method of distribution. (c) Those counties with tribal gaming from gaming tribes that do not contribute to the Indian Gaming Special Distribution Fund should be eligible to receive some funds from the Indian Gaming Special Distribution Fund. (d) Tribal governments must participate in the process of identifying and funding mitigation of impacts from tribal gaming through the grant process. SEC. 2. Section 12012.85 of the Government Code is amended to read: 12012.85. There is hereby created in the State Treasury a fund called the "Indian Gaming Special Distribution Fund" for the receipt and deposit of moneys received by the state from Indian tribes pursuant to the terms of tribal-state gaming compacts. These moneys shall be available for appropriation by the Legislature for the following purposes: (a) Grants, including any administrative costs, for programs designed to address gambling addiction. (b) Grants, including any administrative costs, for the support of state and local government agencies impacted by tribal government gaming. (c) Compensation for regulatory costs incurred by the State Gaming Agency and the Department of Justice in connection with the implementation and administration of tribal-state gaming compacts. (d) Payment of shortfalls that may occur in the Indian Gaming Revenue Sharing Trust Fund. This shall be the priority use of moneys in the Indian Gaming Special Distribution Fund. (e) Disbursements for the purpose of implementing the terms of tribal labor relations ordinances promulgated in accordance with the terms of tribal-state gaming compacts ratified pursuant to Chapter 874 of the Statutes of 1999. No more than 10 percent of the funds appropriated in the Budget Act of 2000 for implementation of tribal labor relations ordinances promulgated in accordance with those compacts shall be expended in the selection of the Tribal Labor Panel. The Department of Personnel Administration shall consult with and seek input from the parties prior to any expenditure for purposes of selecting the Tribal Labor Panel. Other than the cost of selecting the Tribal Labor Panel, there shall be no further disbursements until the Tribal Labor Panel, which is selected by mutual agreement of the parties, is in place. (f) Any other purpose specified by law. (g) Priority for funding from the Indian Gaming Special Distribution Fund is in the following descending order: (1) An appropriation to the Indian Gaming Revenue Sharing Trust Fund in an aggregate amount sufficient to make payments of any shortfalls that may occur in the Indian Gaming Revenue Sharing Trust Fund. (2) An appropriation to the Office of Problem and Pathological Gambling within the State Department of Alcohol and Drug Programs for problem gambling prevention programs. (3) The amount appropriated in the annual Budget Act for allocation between the Division of Gambling Control and the California Gambling Control Commission for regulatory functions that directly relates to Indian gaming. (4) An appropriation for the support of local government agencies impacted by tribal gaming. SEC. 3. Chapter 7.5 (commencing with Section 12710) is added to Part 2 of Division 3 of Title 2 of the Government Code, to read: CHAPTER 7.5. GRANTS OF INDIAN GAMING REVENUE TO LOCAL GOVERNMENT AGENCIES 12710. This chapter establishes the method of calculating the distribution of appropriations from the Indian Gaming Special Distribution Fund for grants to local government agencies impacted by tribal gaming. 12711. (a) It is the intent of the Legislature to establish a fair and proportionate system to award grants from the Indian Gaming Special Distribution Fund for the support of local government agencies impacted by tribal gaming. It is also the intent of the Legislature that priority for funding shall be given to local government agencies impacted by the tribal casinos that contribute to the Indian Gaming Special Distribution Fund. (b) It is the intent of the Legislature that in the event that any compact between any tribe and the state takes effect on or after the effective date of this chapter, or that any compact between any tribe and the state that took effect on or before May 16, 2000, is renegotiated and reexecuted at any time after its initial effective date, money provided to the state by a tribe pursuant to the terms of these compacts shall be applied on a pro rata basis to the state costs for the regulation of gaming and for problem gambling prevention programs in the Office of Problem and Pathological Gambling within the State Department of Alcohol and Drug Programs. (c) It is the intent of the Legislature that if any compact between any tribe and the state takes effect on or after the effective date of this chapter, or if any compact between any tribe and the state that took effect on or before May 16, 2000, is renegotiated and reexecuted at any time after its initial effective date, any revenue sharing provisions of that compact that requires distributions to nongaming or noncompact tribes shall result in a decrease in the amount that the Legislature appropriates pursuant to this chapter. 12712. As used in this chapter: (a) "County Tribal Casino Account" means an account consisting of all moneys paid by tribes of that county into the Indian Gaming Special Distribution Fund after deduction of the amounts appropriated pursuant to the priorities specified in Section 12012.85. (b) "Individual Tribal Casino Accounts" means an account for each individual tribal casino that has paid money into the Indian Gaming Special Distribution Fund. The individual tribal casino account shall be funded in proportion to the amount that the individual tribe has paid into the Indian Gaming Special Distribution Fund. (c) "Local jurisdiction" means any city, county, or special district. 12713. The Department of Finance, in consultation with the California Gambling Control Commission, shall calculate the total revenue in the Indian Gaming Special Distribution Fund that will be available for the current budget year for local government agencies impacted by tribal gaming. The department shall include this information in the May budget revision. 12714. (a) A County Tribal Casino Account is hereby created in the treasury for each county that contains a tribal casino. (b) The amount to be deposited into each eligible county's County Tribal Casino Account shall be calculated in the following way: (1) (A) For counties that do not have gaming devices subject to an obligation to make contributions to the Indian Gaming Special Distribution Fund, the total amount to be appropriated by the Legislature for grants to local government agencies impacted by tribal gaming shall be multiplied by 5 percent. (B) The amount determined pursuant to subparagraph (A) shall be divided by the aggregate number of gaming devices located in those counties that do not have gaming devices subject to an obligation to make contributions to the Indian Gaming Special Distribution Fund. (C) The amount determined pursuant to subparagraph (B) shall be multiplied by the number of gaming devices located in each county for which an appropriation is being calculated that are not subject to an obligation to make contributions to the Indian Gaming Special Distribution Fund. (D) The amount determined pursuant to subparagraph (C) shall be deposited into the County Tribal Casino Account for the county for which the appropriation was calculated. (2) (A) For counties that have gaming devices subject to an obligation to make contributions to the Indian Gaming Special Distribution Fund, the total amount to be appropriated by the Legislature for grants to local government agencies impacted by tribal gaming shall be multiplied by 95 percent. (B) The amount determined pursuant to subparagraph (A) shall be divided by the aggregate number of gaming devices located in those counties that have gaming devices subject to an obligation to make contributions to the Indian Gaming Special Distribution Fund. (C) The amount determined pursuant to subparagraph (B) shall be multiplied by the number of gaming devices located in each county for which an appropriation is being calculated that are subject to an obligation to make contributions to the Indian Gaming Special Distribution Fund. (D) The amount determined pursuant to subparagraph (C) shall be deposited into the County Tribal Casino Account for the county for which the appropriation was calculated. 12715. (a) The Controller, acting in consultation with the California Gambling Control Commission, shall divide the County Tribal Casino Account for each county that has gaming devices that are subject to an obligation to make contributions to the Indian Gaming Special Distribution Fund into a separate account for each tribe that operates a casino within the county. These accounts shall be known as Individual Tribal Casino Accounts, and funds may be released from these accounts to make grants selected by an Indian Gaming Local Community Benefit Committee pursuant to the method established by this section to local jurisdictions impacted by tribal casinos. Each Individual Tribal Casino Account shall be funded in proportion to the amount that each individual tribe paid in the prior fiscal year to the Indian Gaming Special Distribution Fund. (b) (1) There is hereby created in each county in which Indian gaming is conducted an Indian Gaming Local Community Benefit Committee. The selection of all grants from each Individual Tribal Casino Account or County Tribal Casino Account shall be made by each county's Indian Gaming Local Community Benefit Committee. In selecting grants, the Indian Gaming Local Community Benefit Committee shall follow the priorities established in subdivision (g). This committee has the following additional responsibilities: (A) Establishing all application policies and procedures for grants from the Individual Tribal Casino Account or County Tribal Casino Account. (B) Assessing the eligibility of applications for grants from local jurisdictions impacted by tribal gaming operations. (C) Determining the appropriate amount for reimbursement from the aggregate county tribal account of the demonstrated costs incurred by the county for administering the grant programs. The reimbursement for county administrative costs may not exceed 2 percent of the aggregate county tribal account in any given fiscal year. (2) The Indian Gaming Local Community Benefit Committee shall be composed of seven representatives, consisting of the following: (A) Two representatives from the county, selected by the county board of supervisors. (B) Three elected representatives from cities located within four miles of a tribal casino in the county, selected by the county board of supervisors. In the event that there are no cities located within four miles of a tribal casino in the county, other local representatives may be selected upon mutual agreement by the county board of supervisors and a majority of the tribes paying into the Indian Gaming Special Distribution Fund in the county. When there are no cities within four miles of a tribal casino in the county, and when the Indian Gaming Local Community Benefit Committee acts on behalf of a county where no tribes pay into the Indian Gaming Special Distribution Fund, other local representatives may be selected upon mutual agreement by the county board of supervisors and a majority of the tribes operating casinos in the county. (C) Two representatives selected upon the recommendation of a majority of the tribes paying into the Indian Gaming Special Distribution Fund in each county. When an Indian Gaming Local Community Benefit Committee acts on behalf of a county where no tribes pay into the Indian Gaming Special Distribution Fund, the two representatives may be selected upon the recommendation of the tribes operating casinos in the county. (c) Sixty percent of each individual tribal casino account shall be available for nexus grants on a yearly basis to cities and counties impacted by tribes that are paying into the Indian Gaming Special Distribution Fund, according to the four-part nexus test described in paragraph (1). Grant awards shall be selected by each county's Indian Gaming Local Community Benefit Committee and shall be administered by the county. Grants may be awarded on a multiyear basis, and these multiyear grants shall be accounted for in the grant process for each year. (1) A nexus test based on the geographical proximity of a local government jurisdiction to an individual tribal land upon which a tribal casino is located shall be used by each county's Indian Gaming Local Community Benefit Committee to determine relative priority for grants, using the following criteria: (A) Whether the local government jurisdiction borders the tribal lands on all sides. (B) Whether the local government jurisdiction partially borders tribal lands. (C) Whether the local government jurisdiction maintains a highway, road, or other thoroughfare that is the predominant access route to a casino that is located within four miles. (D) Whether all or a portion of the local government jurisdiction is located within four miles of a casino. (2) Fifty percent of the amount specified in subdivision (c) shall be awarded in equal proportions to local government jurisdictions that meet all four of the nexus test criteria in paragraph (1). If no eligible local government jurisdiction satisfies this requirement, the amount specified in this paragraph shall be made available for nexus grants in equal proportions to local government jurisdictions meeting the requirements of paragraph (3) or (4). (3) Thirty percent of the amount specified in subdivision (c) shall be awarded in equal proportions to local government jurisdictions that meet three of the nexus test criteria in paragraph (1). If no eligible local government jurisdiction satisfies this requirement, the amount specified in this paragraph shall be made available for nexus grants in equal proportions to local government jurisdictions meeting the requirements of paragraph (2) or (4). (4) Twenty percent of the amount specified in subdivision (c) shall be awarded in equal proportions to local government jurisdictions that meet two of the nexus test criteria in paragraph (1). If no eligible local government jurisdiction satisfies this requirement, the amount specified in this paragraph shall be made available for nexus grants in equal proportions to local government jurisdictions meeting the requirements of paragraph (2) or (3). (d) Twenty percent of each individual tribal casino account shall be available for discretionary grants to local jurisdictions impacted by tribes that are paying into the Indian Gaming Special Distribution Fund. These discretionary grants shall be made available to all local jurisdictions in the county irrespective of any nexus to impacts from any particular tribal casino, as described in paragraph (1) of subdivision (c). Grant awards shall be selected by each county's Indian Gaming Local Community Benefit Committee and shall be administered by the county. Grants may be awarded on a multiyear basis, and these multiyear grants shall be accounted for in the grant process for each year. (e) Twenty percent of each individual tribal casino account shall be available for discretionary grants to local jurisdictions impacted by tribes that are not paying into the Indian Gaming Special Distribution Fund. These grants shall be made available to local jurisdictions in the county irrespective of any nexus to impacts from any particular tribal casino, as described in paragraph (1) of subdivision (c), and irrespective of whether the impacts presented are from a tribal casino that is not paying into the Indian Gaming Special Distribution Fund. Grant awards shall be selected by each county's Indian Gaming Local Community Benefit Committee and shall be administered by the county. Grants may be awarded on a multiyear basis, and of these multiyear grants shall be accounted for in the grant process for each year. (1) Grants awarded pursuant to this subdivision are limited to addressing service-oriented impacts and providing assistance with one-time large capital projects related to Indian gaming impacts. (2) Grants shall be subject to the sponsorship of the tribe that operates the particular Indian gaming facility and the recommendations of the Indian Gaming Local Community Benefit Committee for that county. (f) For each county that does not have gaming devices subject to an obligation to make payments to the Indian Gaming Special Distribution Fund, funds may be released from the county's County Tribal Casino Account to make grants selected by the county's Indian Gaming Local Community Benefit Committee pursuant to the method established by this section to local jurisdictions impacted by tribal casinos. These grants shall be made available to local jurisdictions in the county irrespective of any nexus to any particular tribal casino. These grants shall follow the priorities specified in subdivision (g). (g) The following uses shall be the priorities for the receipt of grant money from Individual Tribal Casino Accounts: law enforcement, fire services, emergency medical services, environmental impacts, water supplies, waste disposal, behavioral, health, planning and adjacent land uses, public health, roads, recreation and youth programs, and child care programs. (h) All grants from Individual Tribal Casino Accounts shall be made only upon the affirmative sponsorship of the tribe paying into the Indian Gaming Special Distribution Fund from whose individual tribal casino account the grant moneys are available for distribution. Tribal sponsorship shall confirm that the grant application has a reasonable relationship to a casino impact and satisfies at least one of the priorities listed in subdivision (g). A grant may not be made for any purpose that would support or fund, directly or indirectly, any effort related to opposition or challenge to Indian gaming in the state, and, to the extent any awarded grant is utilized for any prohibited purpose by any local government, upon notice given to the county by any tribe from whose Individual Tribal Casino Account the awarded grant went toward that prohibited use, the grant shall terminate immediately and any moneys not yet used shall again be made available for qualified nexus grants. (i) A local government jurisdiction that is a recipient of a grant from an Individual County Tribal Casino Account or a County Tribal Casino Account shall provide notice to the public, either through a slogan, signage, or other mechanism, which states that the local government project has received funding from the Indian Gaming Special Distribution Fund and which further identifies the particular Individual Tribal Casino Account from which the grant derives. (j) (1) Each county's Indian Gaming Local Benefit Committee shall submit to the Controller a list of approved projects for funding from Individual Tribal Casino Accounts. Upon receipt of this list, the Controller shall release the funds directly to the local government entities for which a grant has been approved by the committee. (2) Funds not allocated from an individual tribal casino account by the end of each fiscal year shall revert back to the Indian Gaming Special Distribution Fund. 12716. Each county which administers grants from the Indian Gaming Special Distribution Fund shall provide an annual report to the Legislature by April 1st of each year detailing the specific projects funded by all grants in their jurisdiction. 12717. The State Auditor shall conduct an audit every three years regarding the allocation and use of moneys from the Indian Gaming Special Distribution Fund by the recipient of the grant moneys. The State Auditor shall report its findings to the Legislature and to all other appropriate entities. 12718. This chapter shall remain in effect only until January 1, 2009, and as of that date is repealed, unless a later enacted statute that is enacted before January 1, 2009, deletes or extends that date. SEC. 4. The sum of twenty-five million dollars ($25,000,000) is hereby appropriated from the Indian Gaming Special Distribution Fund to the Controller for distribution to local government agencies impacted by tribal gaming pursuant to the provisions of Chapter 7.5 (commencing with Section 12710) of Part 2 of Division 3 of Title 2 of the Government Code. SEC. 5. Notwithstanding Section 17610 of the Government Code, if the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code. If the statewide cost of the claim for reimbursement does not exceed one million dollars ($1,000,000), reimbursement shall be made from the State Mandates Claims Fund.