BILL ANALYSIS Ó
AB 2515
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Date of Hearing: April 18, 2012
ASSEMBLY COMMITTEE ON GOVERNMENTAL ORGANIZATION
Isadore Hall, Chair
AB 2515 (Hall) - As Amended: March 29, 2012
SUBJECT : Tribal gaming: local agencies.
SUMMARY : Strengthens procedures governing the award of grants
from the Indian Gaming Special Distribution Fund (SDF) to ensure
that the funds are properly used to mitigate costs associated
with tribal gaming. Requires the Indian Gaming Local Community
Benefit Committee to adopt and approve a Conflict of Interest
Code. Specifically, this bill:
1) Requires grant application to the Indian Gaming Local
Community Benefit Committee to clearly show how the grant will
mitigate the impact of the specified casino.
2) Requires the Indian Gaming Local Community Benefit Committee
shall adopt and approve a Conflict of Interest Code. Any
existing Conflict of Interest Code shall be reviewed and amended
as necessary to bring it into compliance with the requirements
for local agencies as specified in existing law.
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.
2) 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
California Gambling Control Commission (CGCC) and the
Department of Justice (DOJ) in connection with the
implementation and administration of compacts.
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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.
f) Any other purpose specified by law.
3) 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
Commission, 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.
4) 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.
5) 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.
6) 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-compact Tribes (i.e.,
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.
FISCAL EFFECT : Unknown.
COMMENTS :
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In February of 2011, the Bureau of State Audits issued a report
on the Indian Gaming Special Distribution Fund (Report
2010-036). Existing law requires the State Auditor to conduct
an audit every three years regarding the allocation and use of
SDF moneys by grant recipients. The report examined the
allocation and expenditure of grants from the funds. It
concluded that local benefit committees have difficulty in
complying with grant requirements and related law. In many
instances, grant recipients were unable to quantify, or provide
evidence of, the impact of the casino. Some counties failed to
award local governmental entities that were proximate to the
casino operation, the minimum amounts that the law specifies for
those entities. Some members on the benefit committees in four
of seven counties reviewed also failed to file required
statements of economic interests.
Purpose of the bill : According to the author, this bill is in
response to a Bureau of State Audits report from February 2011,
titled "The Indian Gaming Special Distribution Fund (Report
2010-036).
The author states that the intent of this bill is to address
several of the Auditor recommendations stemming from its review
of the SDF and the benefit committees, including: 1) "More
rigorously review applications that are to be administered and
spent by an entity other than the local government that applies
for the funds. Specifically, benefit committees should require
that each grant application clearly show how the grant will
mitigate the impact of the casino on the applicant agency; and
2) Ensure that benefit committees' conflict-of-interest codes
comply with the political reform act by reviewing the act and
their codes, and changing the codes as necessary to meet the
act's requirements."
The author states, this bill will provide clarification of
existing law and provide direction to local benefit committees
who are attempting to implement the distribution of SDF grant
funds.
Background :
Local Benefit Committees : Existing law establishes Indian
Gaming Local Community Benefit Committees with specified local
government and tribal representation that are responsible for
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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.
Conflict of Interest Code : Existing law specifies that every
agency promulgate and adopt a Conflict of Interest Code which
will have the force of law and any violation is deemed a
violation of state law. Such a "code" shall require that each
designated employee, file statements disclosing reportable
investments, business positions, interests in real property and
income. It also sets forth specific circumstances under which
designated employees or categories of designated employees must
disqualify themselves from making, participating in the making,
or using their official position to influence the making of any
decision.
SDF Budget Actions : The Budget Act of 2003-04 appropriated $25
million from the SDF to local jurisdictions impacted by Indian
gaming. The Budget Acts of 2004-05, 2005-06, and 2006-07, each
appropriated $30 million from the SDF to local governments
impacted by Indian gaming. The Budget Act of 2007-08 included a
$30 million appropriation from the SDF to local governments
impacted by Indian gaming; however, the Governor blue-penciled
that appropriation. In 2008, AB 158 (Torrico), appropriated $30
million from the SDF to counties for mitigating Indian casino
impacts. 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. In 2011, AB 1417 (Hall), Chapter 736, Statutes of 2011,
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appropriated $9.1 million from the SDF to the CGCC to provide
grants to local agencies for the purpose of mitigating the
adverse impacts of tribal gaming.
The Governor's Budget for FY 2012-13 estimates a SDF fund
balance of $46 million for the current year. DOF will release a
report by the May Revise to update the fund balance projections
for the current year and the budget year.
It has been noted, in the past, that if the annual $30 million
appropriation were to continue for local mitigation grants, and
the SDF continues to be used to fund the $40 million annual RSTF
shortfall, estimates suggest that the SDF will have a shortfall
of approximately $37 million in 2012-13. Under the 2007 compact
amendments, the state is obligated to cover the RSTF annual
shortfall if the SDF cannot.
Prior legislation : AB 1417 (Hall), Chapter 736, Statutes of
2011. Appropriated $9.1 million from the SDF to the CGCC to
provide grants to local agencies for the purpose of mitigating
the adverse impacts of tribal gaming.
SB 856 (Senate Budget and Fiscal Review Committee), Chapter 719,
Statutes of 2010. Appropriated $30 million from the SDF to
restore $30 million in funding vetoed by the Governor in the
2007-08 Budget Act. The language would require the funds be
divided amongst the locals based on the amounts paid into the
SDF in the 2006-07 fiscal year.
SB 357 (Ducheny), Chapter 181, Statutes of 2009. Extends the
sunset date to January 1, 2021 for the law governing the method
of calculating the distribution of appropriations from the SDF
for grants to local government agencies impacted by tribal
gaming.
AB 158 (Torrico), Chapter 754, Statutes of 2008. Enacted
several recommendations proposed by the State Auditor relative
to the allowable allocation and uses of grants to local
government agencies to mitigate the impact of tribal gaming in
local jurisdictions. Appropriated $30 million from the Indian
Gaming Special Distribution Fund to be allocated by the
California Gambling Control Commission for local
projects that mitigate the impacts of tribal gaming.
AB 673 (J. Horton), Chapter 210, Statutes of 2003. Provides for
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allocation of funds from the SDF for the purpose of backfilling
shortfalls in the RSTF, and for a problem gambling prevention
program.
SB 621 (Battin), Chapter 858, Statutes of 2003. Establishes
priorities and procedures for funding to local governments from
the SDF for the purpose of mitigating impacts from tribal
casinos.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file
Opposition
None on file
Analysis Prepared by : Eric Johnson / G. O. / (916) 319-2531