BILL ANALYSIS Ó AB 307 Page 1 ASSEMBLY THIRD READING AB 307 (Nestande) As Amended March 29, 2011 Majority vote LOCAL GOVERNMENT 9-0 ----------------------------------------------------------------- |Ayes:|Smyth, Alejo, Bradford, | | | | |Campos, Davis, Gordon, | | | | |Hueso, Knight, Norby | | | ----------------------------------------------------------------- SUMMARY : Changes the definition of "public agency" for purposes of joint powers agreements (JPA) to include federally recognized Indian tribes. Specifically, this bill : 1)Changes the definition of "public agency" for purposes of JPAs to include federally recognized Indian tribes. 2)Prohibits any joint powers authority that includes a federally recognized Indian tribe from having the authority to authorize or issue bonds pursuant to the Marks-Roos Local Bond Pooling Act of 1985 unless the public improvements to be funded by the bonds will be owned and maintained by the joint powers authority or one or more of its public agency members, and the revenue streams pledged to repay the bonds derive from the joint powers authority or one or more of its public agency members. 3)Repeals provisions that authorize the Elk Valley Rancheria Tribal Council to enter into a JPA with the County of Del Norte and the City of Crescent City, or both. 4)Repeals provisions that authorize the Torres Martinez Desert Cahuilla Indians to enter into a JPA to participate in the Salton Sea Authority. 5)Repeals provisions that authorize the Hoopa Valley Business Council, as the governing body of the Hoopa Valley Indian Tribe, to enter into a JPA with the Humboldt County Association of Governments. EXISTING LAW : AB 307 Page 2 1)Authorizes, under the Joint Exercise of Powers Act of 1949, two or more public agencies (i.e. federal government, any state, any state department or agency, county, county board of education, county superintendent of schools, city, public corporation, public district, and regional transportation commission in any state) to enter into a JPA to exercise jointly any power common to the contracting agencies that it can do by itself. 2)Defines "public agency" to include, but not be limited to, the federal government or any federal department or agency, this state, another state or any state department or agency, a county, county board of education, county superintendent of schools, city, public corporation, public district, regional transportation commission of this state or another state, or any joint powers authority formed by any of these agencies pursuant to the Joint Exercise of Powers Act. 3)Authorizes the Elk Valley Rancheria Tribal Council to enter into a JPA with the County of Del Norte and the City of Crescent City, or both. 4)Authorizes the Torres Martinez Desert Cahuilla Indians to enter into a JPA to participate in the Salton Sea Authority. 5)Authorizes the Hoopa Valley Business Council, as the governing body of the Hoopa Valley Indian Tribe, to enter into a JPA with the Humboldt County Association of Governments. FISCAL EFFECT : None COMMENTS : California's JPAs are federations of federal, state, and local public agencies that jointly perform duties that each entity could perform on its own. California's JPAs collaborate to address public needs, such as financing public facilities, forming insurance pools, and enhancing planning and regulation. JPAs can be structured as an agreement between existing agencies or as a creation of a new, separate entity called a joint powers authority. In an opinion dated August 28, 1996, the California State Attorney General (AG) found that an Indian tribe does not meet any of the public agency definitions listed under the Joint AB 307 Page 3 Exercise of Powers Act, but rather is a "domestic dependent nation" separate and distinct from the United States. As a result, special legislation is necessary in order for individual tribes to enter into JPAs with legal public agencies. There is precedent for declaring Indian tribes to be public agencies for the purpose of participating in JPAs. Before the 1996 AG opinion, the Legislature designated Hoopa Valley Indian Tribe as a public agency for the purpose of entering into JPAs with the members of the Humboldt County Association of Governments. Subsequent to the AG's opinion, AB 959 (Kelley), Chapter 19, Statutes of 2001, authorized Torres Martinez Desert Cahuilla Indians to enter into a JPA to participate in the Salton Sea Authority, and AB 1172 (Berg), Chapter 39, Statutes of 2003, authorized Elk Valley Rancheria Tribal Council to enter into a JPA with Del Norte County and Crescent City to jointly finance and manage a regional wastewater treatment plant and later to enter into a JPA for purposes of forming the Border Coast Regional Airport Authority. The Marks-Roos Local Bond Pooling Act of 1985 (Marks-Roos) allows local governments, as a joint powers authority, to pool bonds to lower their overhead costs. Marks-Roos bonds were created to provide a flexible alternative method of financing needed public improvements, along with the benefit of reduced borrowing costs through the use of bond pools. These bonds do not require voter approval, and instead are approved by resolution of the joint powers authority. The joint powers authority is required when approving the resolution to issue bonds at a regular meeting that: 1) the authority reasonably expects the public improvement is to be located within the boundaries of one or more local agencies of the authority; 2) a local agency within whose boundaries the public improvement is to be located has approved the financing and make a finding of significant public benefit; and, 3) notice is sent to the AG and the California Debt and Investment Advisory Commission. This bill would prohibit any joint powers authority that includes a federally recognized Indian tribe from having the authority to authorize or issue bonds pursuant to the Marks-Roos Local Bond Pooling Act of 1985, unless the public improvements to be funded by the bonds will be owned and maintained by the joint powers authority or one or more of its public agency members, including the federally recognized Indian tribe, and AB 307 Page 4 the revenue streams pledged to repay the bonds derive from the joint powers authority or one or more of its public agency members, including the federally recognized Indian tribe. In the March 2000 primary, Proposition 1A was approved by voters. Proposition 1A amended the California Constitution to allow the Governor to negotiate and enter into gaming compacts with Indian tribes, subject to ratification by the Legislature. In anticipation of the passage of Proposition 1A, the Governor, in 1999, negotiated and the Legislature approved ratifying compacts with many Indian tribes. These compacts received federal approval and are effective until December 31, 2020. As part of the 1999 compacts, the Indian tribes agreed to provide to the state a portion of their revenues from gaming devices in the form of license and operation fees. These fees provide money for two funds: the Indian Gaming Revenue Sharing Trust Fund (IGRSTF), which distributes money to tribes that do not have compacts or that have compacts and have fewer than 350 gaming devices, and the Indian Gaming Special Distribution Fund (IGSDF), which finances various state and local government activities. Each tribe under these compacts deposits a percentage of its average net wins into IGSDF. Between 2003 and 2010, the Governor negotiated, the Legislature ratified, and the federal government approved six additional compacts and amendments to 12 of the original compacts. The post-1999 compacts and amendments do not have those Indian tribes contributing to IGSDF, but do allow Indian tribes to work directly with local governments to address casino impacts. State law specifies the money deposited into IGSDF is available for appropriation by the Legislature to address four needs in the following priorities: a) supporting IGRSTF; b) funding problem-gambling prevention programs managed by the Department of Alcohol and Drug Programs; c) paying the operating costs for the Indian gaming regulatory functions of the Gambling Control Commission and Department of Justice; and, d) supporting local governments impacted by tribal gaming. Once the money is appropriated for local governments using a nexus test, the money is divided among eligible counties to use for mitigation projects according to a specified methodology. In the 2008-09 fiscal year, the Legislature allocated a total of $30 million for 25 counties, who issued 185 grants. At the AB 307 Page 5 county-level, there are Indian Gaming Local Community Benefit Committees, who evaluate the grant applications and award the money. Any money that is not awarded reverts back to IGSDF. The priority uses of IGSDF, as specified in statute, are: 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. The author states, today, many tribal governments have the resources and sophistication to engage in large-scale economic development, infrastructure construction, and broad-based community services beyond their tribal membership. The author also says many public agencies in the state have sought to include tribal governments in JPAs in recent years, but special legislation is necessary for each of these individual JPA opportunities. According to the author, this bill would allow Indian tribes and public agencies to enter into JPAs affecting local issues without having to come to the Legislature each time. As noted earlier, JPAs are formed for a variety of public service reasons, spanning groundwater resource management programs to agricultural associations. Allowing public agencies to enter into JPAs with Indian tribes without seeking special legislation from the Legislature could mean Indian tribes become more easily and integrally woven into the network of social services provided to local communities. The powers of JPAs are limited to the powers in common of all the individual members of the JPA. Indian tribes would easily fit into any number of JPAs because Indian tribes are not limited by state laws and have more flexibility in what they can accomplish than federal, state, and local agencies, which are all constrained by regulations and statutes. Would allowing Indian tribes to join JPAs at their discretion create an unbalanced and inequitable relationship with public agencies because Indian tribes would have all the benefits and powers of a public agency while preserving sovereign immunity? The question remains whether, as a sovereign nation, Indian tribes would be subject to the same liabilities as public agencies while serving on the JPA because, unless authorized by AB 307 Page 6 Congress, the jurisdiction of state governments and the application of state laws do not extend to Indian lands. The Legislature may wish to ask how Indian tribes will benefit by being partners in JPAs. It could be as simple as their wanting to act as good neighbors and provide capital and input to regional concerns and projects. It also could be that most Indian tribes' members and employees live off tribal lands and partnering with local agencies to provide public services is a direct way of helping their own constituents. The sponsor of this bill, United Auburn Indian Community, says, "Tribal governments are mature governmental agencies that are experienced in running schools, housing programs, health care systems, natural resource protection services, and other public-benefit programs." The money in IGSDF derived from the 1999 Indian gaming compacts is not much and is not distributed to all counties. The list of priorities the Indian Gaming Local Community Benefit Committees have to follow does not always match up to the needs of a local government agency wanting to partner with an Indian tribe. Thus, allowing Indian tribes to participate in JPAs would be a more stable source of revenue and support for local governments wanting not only to mitigate the impacts of gaming, but also those wanting to meet the other social services needs of the community at large. Prior governors when vetoing bills granting specific Indian tribes JPA authorizations have said Memorandums of Understanding (MOU) are a better way for Indian tribes to partner with local agencies. However, MOUs between local agencies and Indian tribes do not allow tribes to be full and complete partners with the local agencies. The Coachella Valley Association of Governments (CVAG) is a joint powers authority made up of 10 cities and the County of Riverside. Three Indian tribes have joined the joint powers authority through MOUs, but cannot be given full membership. CVAG wants to have these three Indian tribes as full members based on their successful, but limited, partnership. The Legislature, however, may wish to consider whether it wants to deviate from the precedent established by the original language of the Joint Exercise of Powers Act and allow Indian tribes to be deemed a public agency for purposes of JPAs. AB 307 Page 7 AB 847 (Berg, 2008), which would have allowed the Tribal Council of the Yurok Tribe to enter into a JPA with public agencies for the purposes of projects and activities for the preservation and restoration of fisheries in the Klamath River Basin, did not make it out of the Senate Local Government Committee. Governor Schwarzenegger vetoed AB 1884 (Maze, 2008), which would have allowed the Tule River Tribal Council to enter into a JPA with the City of Porterville to develop commercial property in the vicinity of the Porterville Airport. AB 1962 (Berg, 2006) was vetoed by the Governor with the veto message expressing concern about ambiguous language and a lack of specifics about the scope of the Yurok Tribe's participation in a JPA. The Governor also vetoed AB 2762 (Levine, 2006), which would have allowed 17 federally recognized Indian tribal governments to enter into a joint powers agreement to participate in the Southern California Association of Governments. In 2005, Governor Schwarzenegger vetoed AB 1747 (Wolk, 2005), which would have allowed the Rumsey Band of Wintun Indians to join a JPA in Yolo County. More recently, in 2010 Governor Schwarzenegger vetoed AB 2166 (Chesbro, 2010), which sought to allow the Smith River Rancheria Tribal Council to enter into a JPA to participate in the Border Coast Regional Airport Authority. AB 798 (Chesbro, 2011), a similar bill, allows the Smith River Rancheria Tribal Council to enter into a JPA with the County of Del Norte, the City of Crescent City, or both. Support arguments: Supporters, the United Auburn Indian Community, say allowing federally recognized Indian tribes to join JPAs with local agencies will allow Indian tribes to join their non-tribal counterparts in advancing the public good. Opposition arguments: Opponents might say allowing federally recognized Indian tribes to reap the benefits of being a public agency without potentially having to be subject to the liabilities of a public agency is unfair and inequitable. Analysis Prepared by : Jennifer Klein Baldwin / L. GOV. / (916) 319-3958 AB 307 Page 8 FN: 0000229