BILL ANALYSIS Ķ
AB 1020
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Date of Hearing: May 4, 2011
ASSEMBLY COMMITTEE ON GOVERNMENTAL ORGANIZATION
Isadore Hall, Chair
AB 1020 (Chesbro) - As Amended: March 31, 2011
SUBJECT : Tribal gaming: compact ratification.
SUMMARY : Ratifies a new tribal-state gaming compact entered
into between the State of California and the Habematolel Pomo of
Upper Lake, executed on March 17, 2011. Specifically, this
bill :
1) Repeals the ratification of the tribal-state gaming compact
entered into between the State of California and the Habematolel
Pomo of Upper Lake, executed on September 2, 2009, and
would ratify a new tribal-state gaming compact entered into
between the State of California and the Habematolel Pomo of
Upper Lake, executed on March 17, 2011.
2) Requires that related revenue contributions be deposited
into designated funds, except as specified, and would also
provide that, in deference to tribal sovereignty, certain
actions may not be deemed projects for purposes of the
California Environmental Quality Act (CEQA).
3) By imposing additional duties on a lead agency with regard
to the implementation of CEQA requirements, this bill would
increase the service provided by a local agency, thereby
creating a state-mandated local program.
EXISTING LAW:
1) Provides, under the Indian Gaming Regulatory Act (IGRA), for
the negotiation and conclusion of compacts between federally
recognized Indian tribes and the state for the purpose of
conducting class III gaming activities on Indian lands within a
state as a means of promoting tribal economic development,
self-sufficiency, and strong tribal governments.
2) Authorizes the conduct of class III gaming activities to the
extent such activities are permitted by state law, a gaming
compact has been concluded by a federally recognized tribe and
the state, and the compact has been approved by the Secretary of
the Interior.
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3) Limits the operation of class III gaming activities to
Indian lands acquired on or before October 17, 1988. Provides
for certain exceptions to conduct gaming activities on Indian
lands acquired after October 17, 1988.
4) Defines Indian lands to mean all lands within the limits of
any Indian reservation, and any lands title to which is either
held in trust by the United States for the benefit of any Indian
tribe or individual or held by any Indian tribe or individual
subject to restriction by the United States against alienation
and over which an Indian tribe exercises governmental power.
5) Requires the state to negotiate to conclude a compact in
good faith with an Indian tribe having jurisdiction over the
Indian lands upon which the class III gaming activity is to be
conducted.
6) Provides the United States district courts with jurisdiction
over any cause of action initiated by a tribal government
alleging that the state failed to negotiate in good faith to
conclude a compact.
7) Prescribes the remedy, mediation supervised by the courts,
if it is found that the state failed to negotiate in good faith
to conclude a compact.
8) CEQA requires a lead agency to prepare, or cause to be
prepared, and certify the completion of, an environmental impact
report on a project, as defined, that it proposes to carry out
or approve that may have a significant effect on the
environment, as defined, or to adopt a negative declaration if
it finds that the project will not have that effect.
9) Authorizes the Governor, under the California Constitution,
to negotiate and conclude compacts, subject to ratification by
the Legislature.
FISCAL EFFECT : Unknown.
COMMENTS :
The Habematolel Pomo of Upper Lake is a federally recognized
tribe of Pomo Indians in Lake County, California. The Tribe's
reservation, the Upper Lake Rancheria, is 119 acres and located
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near the town of Upper Lake in northwestern California. The
Tribe has 216 enrolled members. The Tribe is governed by an
elected, seven-member tribal council.
The Habematolel Pomo operate their own housing, environmental,
and educational programs, including computer classes and GED
preparation. The United States Department of Interior
determined that the Tribe has met the conditions of the restored
lands exception under Indian Gaming Regulatory Act (IGRA), and
on November 13, 2008 accepted 11.24 acres of land in the County
of Lake in trust for the benefit of the Tribe, thus making this
11.24 acre parcel of land eligible for gaming.
This compact will supersede a 2009 compact the Tribe signed with
Governor Arnold Schwarzenegger. The State and Tribe executed a
tribal-state class III gaming compact on September 2, 2009,
which was ratified by the California Legislature with the
passage of SB89 (Chesbro, Statutes of 2010), and subsequently
submitted to the United States Department of the Interior for
approval.
On August 17, 2010, the United States Department of the Interior
disapproved the 2009 Compact in light of the decision of the
United States Court of Appeals for the Ninth Circuit in Rincon
Band of Luiseno Mission Indians of the Rincon Reservation v.
Schwarzenegger (9th Cir. 2010) 602 F.3d 1019 ("Rincon"). The
basis for the Department of Interior rejection was that the
Compact, was unfair to the tribe and that it violated IGRA by
requiring revenue sharing payments to the state General Fund and
to the extent to which revenue sharing and variations on tribal
gaming exclusivity constituted 'meaningful concessions' under
IGRA. The rejection letter stated, "The Department is committed
to upholding IGRA and cannot approve a compact where the State
imposes a tax, fee, charge, or other assessment on a
tribally-owned gaming facility in violation of lGRA, as set
forth above. See § 25 D.S.C. 2710(d)(8)."
The Governor's office reports that currently, "the State is
seeking review of the Rincon decision by the United States
Supreme Court and any review of the Rincon decision by the
Supreme Court and any potential federal court review of the
Department of the Interior's disapproval of the 2009 Compact
could take a significant amount of time, with uncertain
outcome."
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The Governor office further states, "in light of the Tribe's
significant needs and investment of resources in furtherance of
its proposed gaming project and the limited economic
opportunities for the Tribe in light of its geographic location,
the State and the Tribe decided to enter into a new compact
rather than await the outcome of the Rincon case and any
potential federal court review of the August 17, 2010, decision
of the Department of the Interior."
On March 22, 2011, the Governor and the Habematolel Pomo of
Upper Lake signed a new tribal-state gaming compact. According
to the Governor's Office," the compact funds programs in local
communities that mitigate the impact of gaming activities and
address gambling addiction. It includes provisions to protect
employees and patrons, and measures that the tribe must take to
protect the environment during the construction and operation of
gaming facilities. The compact allows the operation of a
maximum of 750 slot machines, and up to 15 percent of the
casino's net win from them will go to local communities, as well
as gambling mitigation and regulation provisions. The compact
requires regular audits of gaming operations, and supersedes the
2009 compact between the tribe and the State of California."
The compact will run through December 31, 2031
Under the terms of the compact, the Tribe may engage in Class
III Gaming only on eligible Indian lands at a single Gaming
Facility located within the boundaries of an 11.24-acre parcel,
as the boundaries exist as of the execution date of the Compact.
This Compact will afford the Tribe primary responsibility over
the regulation of its Gaming Facility.
The main difference between this compact and the 2009 Compact is
the amount for revenue sharing requirements between the State
and the Tribe and no revenue payments will be paid into the
General Fund.
This compact is intended to assist the Habematolel Pomo of Upper
Lake in restoring its tribal land base, improve the Tribe's
socio-economic status, assist in economic self-sufficiency and
to promote the stability and security of the Tribe and families.
The casino is expected to create approximately 145 or more jobs
in Lake County.
Other provisions of the compact include :
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Authorized and Permitted Class III Gaming : The Tribe is
authorized to operate only the following Gaming Activities under
the terms and conditions set forth in this Compact: (1) Gaming
Devices. (2) Any banking or percentage card games. (3) Any
devices or games that are authorized under state law to the
California State Lottery, provided that the Tribe will not offer
such games through use of the Internet unless others in the
State are permitted to do so under state and federal law.
Nothing shall be construed to preclude the Tribe from offering
class II gaming or preclude the negotiation of a separate
compact governing the conduct of off-track wagering at the
Tribe's Gaming Facility.
Patron protections : The Tribe agrees to binding arbitration
before a retired judge for disputes over patron injuries and
gambling.
Environmental protections : The Tribe must prepare an
environmental impact report and negotiate mitigation of any
off-reservation impacts with the County.
Employee protections : The Tribe has granted employees the right
to collectively bargain. The Tribe has agreed to participate in
the state's worker's compensation system and unemployment
insurance program, to comply with federal and state occupational
health and safety standards and to consent to the jurisdiction
of the state agencies and courts enforcing all of those
standards. The Tribe also has agreed to enhanced employment
discrimination provisions.
Revenue Contribution : The Tribe shall pay quarterly to the
Special Distribution Fund (SDF) created by the Legislature, in
accordance with the following schedule:
Number of Gaming Devices inPercentage of Average
Quarterly Device Base Gaming Device Net Win
1-350 0%
351-600 7%
601-750 15%
The payment specified herein has been negotiated between the
parties as a fair contribution, based upon the Tribe's market
conditions, its circumstances, and the rights afforded under
this Compact.
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Revenue Sharing Trust Fund : The Tribe agrees that it will pay
into the Revenue Sharing Trust Fund (RSTF) on January 30 of the
following year for distribution on an equal basis to Non-Gaming
and Limited Gaming Tribes the following amounts:
Number of Gaming Devices Operated Annual Payment
1-350 $0 per Gaming Device
351-750 $900 per Gaming Device
Enhanced audit and compliance review procedures : In addition to
providing for an annual independent audit, the amended compact
allows the state to conduct its own annual audit and compact
compliance review.
Inspection of slot machines : Slot machines will have to be
tested, approved and certified by an independent gaming test
laboratory and the tribal gaming agency to ensure that they are
being operated according to specified technical standards. The
California Gambling Control Commission (CGCC) would be
authorized to annually conduct up to four random inspections of
slot machines in operation to confirm that the slot machines are
operating in conformance with these standards.
Minimum internal control standards (MICS): The Tribe must adopt
and comply with standards that meet or exceed the federal
National Indian Gaming Commission standards. The MICS are
incorporated into the compact as an appendix, which shall be
updated periodically by the CGCC and the Tribal Gaming Agency,
to ensure the MICS keep up with changing technology and industry
standards.
Building and Safety Standards : The casino must meet or exceed
the California Building Code and Public Safety Code as
applicable to Lake County.
Problem gambling : The Tribe must train supervisors and floor
employees on identifying and managing problem gambling, include
a responsible gaming message in advertising, provide signage and
education materials at conspicuous locations aimed at preventing
problem gambling and adopt a code of conduct derived from the
American Gaming Association's code.
Labor provisions : If the Tribe employs 250 or more persons in a
tribal casino facility, then the provisions of the Tribal Labor
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Relations Ordinance (TLRO) become effective. TLRO provides for
a secret ballot election.
When Will Compact Become Effective? The compact is not
effective until it is ratified in accordance with state law, and
notice of approval by the US Secretary of the Interior is
published in the Federal Register. Upon all the necessary
approvals, the compact will be valid until December 31, 2031
Intergovernmental Agreement and MOU : In June 2006, the Tribe
entered into an enforceable written mitigation agreement
(Intergovernmental Agreement and MOU) with Lake County that
includes provisions for the mitigation of any significant effect
on the off-reservation environment, as specified, as well as
compensation for public services, including law enforcement,
fire protection, emergency medical services, wastewater
services, and transportation enhancements.
UNITE HERE Memorandum of Agreement : On September 15, 2009, the
Habematolel Pomo of Upper Lake negotiated a MOU with the Hotel
Employee and Restaurant Employee Union (UNITE HERE), recognizing
HERE's ability to organize eligible employees of the casino.
Otherwise, the compact has the same Tribal Labor Relations
Ordinance from the 1999 compacts.
Revenue Sharing Trust Fund : The Tribe will continue to receive
the $1.1 annual payment from the Revenue Sharing Trust Fund
established in the 1999 compacts, if the tribe operates less
than 350 gaming devices. A tribe operating under 350 gaming
devices is considered a "non-compact" tribe and is eligible for
revenue payments from gaming tribes under the 1999 compacts.
In support : The County of Lake writes, "The County has
established an exemplary government-to-government relationship
with the Tribe as a result of the Upper Lake area gaming
project. The cooperative working relationship we have enjoyed
with this tribe, from day one, has set a new standard in Lake
County and is truly a model for others to emulate. The Tribe
has gone well beyond the County's expectations in its
extraordinary efforts to include County officials and the
community at-large in the preparation and planning of its gaming
project, over a period of several years. The County, through
its agencies and officers, continues to meet regularly with the
Tribe to ensure the local community interests are adequately
accounted for within the project.
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The County further states, foremost in these planning efforts is
the existing Memorandum of Understanding (MOU) between the
County and the Tribe that ensures the County's interests are
taken into consideration throughout the Tribe's project. The MOU
sufficiently provides for many mitigation measures including: 1)
Payment by the Tribe to the County of a payment in lieu of
Property tax; 2) Wastewater mitigation measures; 3) Water
mitigation measures; 4) Health and safety mitigation measures;
5) Fire and safety mitigation measures; and 6) Security and law
enforcement mitigation measures.
UNITE HERE states, the Tribe has executed an enforceable
organizing agreement that will ensure the organizing rights of
the permanent work force. With unemployment hovering around a
staggering 20%, many urgently needed new jobs in Lake County are
dependent upon this Compact and we are very hopeful that the
Tribe will be able to move forward at the earliest possible
date."
Prior legislation : AB 122 (Coto), Chapter 3, Statutes of 2010.
Ratified a tribal-state gaming compact between the State of
California and the Pinoleville Pomo Nation, executed on March
10, 2009.
SB 89 (Committee on Budget and Fiscal Review), Chapter 1,
Statutes of 2010. Ratifies the tribal-state gaming compact
between the State of California and the Habematolel Pomo of
Upper Lake, executed on September 2, 2009.
AB 3072 (Price), Chapter 334, Statutes of 2008. Ratified the
first amendment to a tribal-state gaming compact entered into
between the State of California and the Shingle Springs Band of
Miwok Indians, executed on June 30, 2008.
SB 106 (Wiggins), Chapter 37, Statutes of 2007. Ratified a new
compact between the state and the Yurok Tribe of the Yurok
Reservation (Yurok).
SB 174 (Ducheny), Chapter 39, Statutes of 2007. Ratified the
first compact amendment to the compact between the state and
Sycuan.
SB 175 (Ducheny), Chapter 38, Statutes of 2007. Ratified the
first compact amendment to the compact between the state and
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Morongo.
SB 903 (Padilla), Chapter 40, Statutes of 2007. Ratified the
first compact amendment to the compact between the state and
Pechanga.
SB 941 (Padilla), Chapter 226, Statutes of 2007. Ratified the
first compact amendment to the compact between the state and San
Manuel.
SB 957 (Torlakson), Chapter 41, Statutes of 2007. Ratified the
first compact amendment to the compact between the state and
Agua Caliente.
SB 470 (Ducheny), Chapter 527, Statutes of 2006. Ratifies the
first amendment to the compact between the state and the Quechan
Tribe of the Fort Yuma Reservation (Quechan).
SB 1117 (Burton), Chapter 856, Statutes of 2004. Ratified two
new and two amended compacts entered into between the state and
the following tribes: Coyote Valley Band of Pomo Indians (new
compact); Fort Mojave Indian Tribe (new compact); Buena Vista
Rancheria of Me-Wuk Indians (amended compact); and, Ewiiaapaayp
Band of Kumeyaay Indians (amended compact).
AB 687 (Nuņez), Chapter 91, Statutes of 2004. Ratified
amendments to five compacts entered into between the state and
the following tribes: Pala Band of Mission Indians; Pauma Band
of Luiseno Mission Indians of the Pauma and Yuima Reservation;
Rumsey Band of Wintun Indians; United Auburn Indian Communities;
and, Viejas Group of Kumeyaay Indians. Provides for the
issuance of bonds in an amount not to exceed $1.5 billion by the
California Infrastructure and Economic Development Bank and
requires the net proceeds of the sale of the compact assets to
be deposited in the Traffic Congestion Relief Fund and the
Transportation Deferred Investment Fund.
SB 930 (Burton) Chapter 802, Statutes of 2003. Ratified a
compact between the state and the Torres-Martinez Desert
Cahuilla Indians.
SB 411 (Ducheny), Chapter 790, Statutes of 2003. Ratified
compacts between the state and the La Posta Band of Diegueno
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Mission Indians and the Santa Ysabel Band of Diegueno Mission
Indians in San Diego County.
Proposition 1A. Adopted by the People of California on March 7,
2000. Modifies the prohibition against casinos and lotteries in
the California Constitution to authorize the Governor to
negotiate compacts, subject to legislative ratification, for the
operation of slot machines, lottery games, and banking and
percentage card games by federally recognized Indian tribes on
Indian lands in California, in accordance with federal law.
Authorizes slot machines, lottery games, and banking and
percentage card games to be conducted and operated on Indian
lands subject to the compacts.
AB 1385 (Battin), Chapter 874, Statutes of 1999. Designates the
Governor as the state officer responsible for negotiating and
executing compacts between the state and federally recognized
Indian tribes located in the state. Ratifies 57 compacts and
creates two special funds in the State Treasury (SDF and RSTF)
for the deposit of revenues derived from Indian gaming and
gaming device licensing fees.
Proposition 5. Adopted by the People of California on November
3, 1998. Specified the terms and conditions of mandatory
compacts between state and tribal governments for class III
gambling on Indian lands. Amended California law to allow slot
machines and banked card games at tribal casinos. Provided for
contributions to trust funds benefiting non-gaming tribes,
statewide emergency medical care programs, and programs
benefiting communities near tribes. Allowed tribes to retain a
monopoly on authorized gambling. Proposition 5 was found to be
unconstitutional because it amended a provision of the
Government Code and did not amend the Constitution. The
proposition was invalidated in its entirety, save the final
sentence of Government Code Section 98005, containing the
state's consent to federal suits brought by California tribes
pursuant to IGRA.
SB 287 (Burton), Chapter 409, Statutes of 1998. Ratified 11
compacts negotiated between the State of California and Indian
tribes that permitted class III video gaming devices on tribal
lands and established a process for ratifying other compacts.
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SB 8 (Lockyer), Chapter 867, Statutes of 1997. Repealed the
Gaming Regulation Act and enacted the Gambling Control Act of
1997. Established CGCC and charges it with, among other things,
the authority to issue, deny, revoke, suspend, or impose
conditions, restrictions, or limitations on licenses, permits,
or approvals to ensure that unsuitable or unqualified persons
are not involved in the operation of gambling. Establishes the
Bureau of Gambling Control (formerly known as the Division of
Gambling Control) within the Department of Justice and charges
it with, among other things, the authority to investigate the
background and qualifications of licensees and enforce the laws
related to gambling.
REGISTERED SUPPORT / OPPOSITION :
Support
Congressman Mike Thompson
County of Lake
Habematolel Pomo of Upper Lake
Kitchell Contractors
Northshore Fire Protection District
UNITE HERE
Opposition
None on file
Analysis Prepared by : Eric Johnson / G. O. / (916) 319-2531