BILL ANALYSIS Ó
AB 1417
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 1417 (Hall)
As Amended August 31, 2011
Majority vote
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|ASSEMBLY: | |(May 26, 2011) |SENATE: |35-0 |(September 7, |
| | | | | |2011) |
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(vote not relevant)
Original Committee Reference: G.O.
SUMMARY : Appropriates $9.1 million from the Indian Gaming
Special Distribution Fund (SDF) to the California Gambling
Control Commission (CGCC) to provide grants to local agencies
for the purpose of mitigating the adverse impacts of tribal
gaming.
The Senate amendments delete the Assembly version of the bill,
and instead appropriate $9,100,000 from the SDF to the CGCC to
provide grants to local agencies, as specified.
EXISTING LAW :
1) Creates the SDF in the State Treasury for the receipt of
revenue contributions made by tribal governments pursuant to the
terms of the 1999 model Tribal-State Gaming Compacts and
authorizes the Legislature to appropriate money from the SDF for
the following purposes: a) grants for programs designed to
address gambling addiction; b) grants for the support of state
and local government agencies impacted by tribal government
gaming; c) compensation for regulatory costs incurred by the
CGCC and the Department of Justice (DOJ) in connection with the
implementation and administration of compacts; d) payment of
shortfalls that may occur in the Indian Gaming Revenue Sharing
Trust Fund (RSTF); e) disbursements for the purpose of
implementing the terms of tribal labor relations ordinances
promulgated in accordance with the terms of the 1999 compacts;
and, f) any other purpose specified by law.
2) Establishes a method of calculating the distribution of
appropriations from the SDF for grants to local government
agencies impacted by tribal gaming. This method includes a
requirement that the State Controller, in consultation with the
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CGCC, deposit funds into County Tribal Casino Accounts and
Individual Tribal Casino Accounts based upon a process that
takes into consideration whether the county has tribes that pay,
or not pay, into the SDF. The distribution formula "sunsets" on
January 1, 2021.
3) Establishes an Indian Gaming Local Community Benefit
Committee in each county in which gaming is conducted, specifies
the composition and responsibilities of that committee, and
requires that committee to make the selection of grants from the
casino accounts. Among other things, the committee is
responsible for establishing all application policies and
procedures for grants from the casino accounts.
4) Requires the State Auditor to conduct an audit every three
years and report its findings to the Legislature
regarding the allocation and use of SDF grant monies.
5) Creates in the State Treasury the RSTF for the receipt and
deposit of moneys derived from gaming device license fees that
are paid into the RSTF pursuant to the terms of specified
tribal-state gaming compacts for the purpose of making
distributions to non-compacted Tribes (e.g.,
federally-recognized non-gaming and tribes that operate casinos
with fewer than 350 slot machines). Revenue in the RSTF is
available to CGCC, upon appropriation by the Legislature, for
making distributions of $1.1 million annually to non-compact
tribes.
AS PASSED BY THE ASSEMBLY , this bill reorganized statutes
pertaining to Indian gaming compacts primarily by moving
them to a newly created Title 16.5 on Tribal Gaming in the
Government Code. This bill also made other technical,
non-substantive changes.
FISCAL EFFECT : According to the Senate Appropriations
Committee, appropriates $9.1 million from the SDF (Special fund)
to the CGCC to provide grants to local agencies for the purpose
of mitigating the adverse impacts of tribal gaming.
COMMENTS : This bill was substantially amended in the Senate and
the Assembly-approved provisions of this bill were deleted.
Purpose of the bill : According to the author, this bill ensures
a statewide appropriation of $9.1 million from the Indian Gaming
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Special Distribution Fund (SDF) for local mitigation monies for
fiscal year 2011-2012. The author points out, under current law
this appropriation is made via a Special Fund (SDF) not the
General Fund.
As a function of the original 1999 tribal-state compacts, these
local mitigation funds are important to many local communities
and counties throughout the state, as they support critically
important allowable purposes such as public safety, fire and
transportation. In this lean budgetary year, local governments
are depending on this money to mitigate the costs associated
with having casinos within their jurisdictions.
This $9.1 million appropriation represents a reasonable request
to provide local mitigation funds to communities surrounding the
21 tribes who still pay into the SDF as provided by the existing
1999 compacts - as well as other many other communities
throughout the state pursuant the longstanding statutory
allocation formula.
Indian Gaming Special Distribution Fund (SDF) : The Indian
Gaming Special Distribution Fund (SDF) was created by the 1999
Tribal State Compacts and is currently financed by 21 tribal
governments that operated more than 200 gaming devices as of
September 1, 1999. The California Government Code specifies
that the money deposited into the SDF is available for
appropriation by the Legislature to address four needs,
prioritized as follows: 1) Supporting the RSTF to ensure that
it can distribute $1.1 million annually to each tribe that does
not have a compact or that has a compact and operates fewer than
350 devices; 2) Funding problem-gambling prevention programs
managed by the Department of Alcohol and Drug Programs; 3)
Paying the operating costs for the Indian gaming regulatory
functions of the CGCC and the Department of Justice (DOJ); and,
4) Supporting local governments impacted by tribal gambling.
SDF contributing tribes : 1) Barona Band of Mission Indians; 2)
Big Sandy Band of Mono Indians; 3) Big Valley Rancheria; 4)
Bishop Paiute Tribe; 5) Cabazon Band of Mission Indians; 6)
Cahuilla Band of Indians; 7) Chicken Ranch Rancheria; 8) Colusa
Indian Community; 9) Hopland Band of Pomo Indians; 10) Jackson
Rancheria Band of Miwuk Indians; 11) Mooretown Rancheria; 12)
Redding Rancheria; 13) Robinson Rancheria; 14) Santa Rosa
Rancheria; 15) Santa Ynez Band of Chumash Indians; 16) Soboba
Band of Luiseno Indians; 17) Sycuan Band of Kumeyaay Indians;
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18) Table Mountain Rancheria; 19) Tule River Indian Tribe; 20)
Twenty-Nine Palms Band of Mission Indians; and, 21) Tyme Maidu
Tribe Berry Creek Rancheria.
Local Benefit Committees : Existing law establishes Indian
Gaming Local Community Benefit Committees with specified local
government and tribal representation that are responsible for
establishing SDF grant application policies and procedures,
determining grant eligibility, and selecting grants from
Individual Tribal Casino Accounts or County Tribal Casino
Accounts based on "nexus test criteria" that mainly takes into
consideration the geographical proximity of an applicant local
government jurisdiction to the tribal casino.
All grants from Individual Tribal Casino Accounts are required
to be made only upon the affirmative sponsorship of the tribe
paying into the SDF from whose Individual Tribal Casino Account
grants are available for distribution. Priority uses for the
receipt of grant money from Individual Tribal Casino Accounts
are as follows: law enforcement; fire services; emergency
medical services; environmental impacts; water supplies; waste
disposal; behavioral; health; planning and adjacent land use;
public health; roads; recreation and youth programs; and,
childcare programs.
SDF budget actions : Appropriations have been made from the SDF
for local community grants in prior years as follows: $25
million in 2003-04; $30 million in 2004-05, 2005-06, 2006-07,
2007-08, 2008-09, and 2010-11. In 2010, SB 856 (Senate Budget
and Fiscal Review Committee), appropriated $30 million from the
SDF to restore $30 million in funding vetoed by the Governor in
the 2007-08 Budget Act. The bill required the funds be divided
amongst the locals based on the amounts paid into the SDF in the
2006-07 fiscal year.
Government Code Section 12713 provides that the Department of
Finance, in consultation with the GCCC, 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
of Finance then includes the information in the May Revision of
the state budget. The projected balance of the SDF as of June
30, 2012 is estimated to be $43.7 million and due to the
structural imbalance with expenditures exceeding revenues, the
fund is expected to have a negative balance by FY 2013-14.
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Therefore, no money was appropriated in the May Revision for
local government mitigation grants this year. In addition,
under current law, the General Fund is obligated to cover the
RSTF annual shortfall if the SDF cannot.
Bureau of State Audits (BSA) : In July 2007, the Bureau of
State Audits reported instances where the grant funds provided
to local governments to mitigate the effects of gaming were used
inappropriately or for entirely unrelated purposes.
In February of 2011, BSA conducted a follow-up audit and found
that local benefit committees still have trouble complying with
the distribution requirements. The audit found that in 2008-09,
of the $30 million appropriated by the Legislature for local
mitigation grants, local governments could not provide evidence
that $3.2 million in grant funding was used to mitigate the
impact of a casino. The auditor further concluded that nearly
25% of the benefit committee members in the seven counties
reviewed failed to provide a statement of economic interest.
Legislative Analyst's concerns : The Legislative Analyst Office,
in its review of the 2009-10 budget, concluded that local grants
have outlived their usefulness due to the major changes in the
revenue stream to the SDF. As a result of several compact
renegotiations by the previous administration, many tribes no
longer contribute to the SDF. These tribes instead have
separate obligations under their new compacts to enter into
enforceable agreements with local jurisdictions to mitigate the
effects of their casinos on nearby counties. It is the LAO's
conclusion, therefore, that the current allocation formula is
inappropriate and outdated.
Prior legislation : SB 856 (Budget and Fiscal Review Committee),
Chapter 719, Statutes of 2010. Among other things, appropriated
$30 million from the SDF to restore funding deleted from the
Budget Act of 2007 for grants to mitigate the impact of tribal
gaming on local governments.
AB 158 (Torrico), Chapter 754, Statutes of 2008. Enacted
several recommendations proposed by the California State Auditor
relative to the allocation and uses of proceeds from the SDF.
SB 288 (Battin) Chapter 13, Statutes of 2006. Appropriated $20
million from the SDF for grants to local jurisdictions impacted
by tribal gaming. Also made a statement of intent that this
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appropriation be used for workload associated with specified
Indian gaming compacts.
SB 621 (Battin), Chapter 858, Statutes of 2003. Among other
things, established, until January 1, 2009, priorities and
procedures for specified funding to local governments from the
SDF for mitigating impacts from tribal casinos. Also,
appropriated $25 million from the SDF to mitigate the impact of
tribal gaming on local governments.
AB 673 (J. Horton), Chapter 210, Statutes of 2003. Specified
that money in the SDF may be used to make payment of shortfalls
that may occur in the RSTF and specified that payment for those
shortfalls in the RSTF shall be the priority use of moneys in
the SDF. Also, established a mechanism by which funds
may be transferred from the SDF to the RSTF pursuant to
specified provisions of the tribal-state compacts and
appropriated the sum of $50,568,787.99 for the purpose of making
payments to eligible Indian tribes for the preceding fiscal
year. In addition, established and provided for the funding of
the Office of Problem and Pathological Gambling in the
Department of Alcohol and Drug Programs.
AB 1385 (Battin), Chapter 874, Statutes of 1999. Among other
things, ratified 57 tribal-state gaming compacts and created two
special funds in the State Treasury (SDF and RSTF) for the
deposit of revenues derived from Indian gaming and gaming device
licensing fees. Also, designated the Governor as the state
officer responsible for negotiating and executing compacts
between the state and federally recognized Indian tribes located
in the state.
Analysis Prepared by : Eric Johnson / G. O. / (916) 319-2531
FN: 0002595