BILL ANALYSIS �
AB 1042
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Date of Hearing: April 10, 2013
ASSEMBLY COMMITTEE ON GOVERNMENTAL ORGANIZATION
Hall III, Isadore, Chair
AB 1042 (Hall) - As Introduced: February 22, 2013
SUBJECT : Tribal gaming: Indian Gaming Special Distribution
Fund.
SUMMARY : Requires the Department of Finance, in consultation
with the California Gambling Control Commission (CGCC), to
provide a recommendation regarding the total revenue in the
Indian Gaming Special Distribution Fund (IGSDF or SDF) that will
be available each budget year for local government agencies
impacted by tribal gaming. DOF shall include this information
in the May budget revision.
EXISTING LAW :
1)Creates the IGSDF 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)Provides that the Department of Finance (DOF), in consultation
with the CGCC, shall calculate the total revenue in the IGSDF
that will be available for the current budget year for local
government agencies impacted by tribal gaming. DOF shall
include this information in the May budget revision.
3)Authorizes the Legislature to appropriate money from the IGSDF
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 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).
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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.
4)Establishes a method of calculating the distribution of
appropriations from the IGSDF 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.
5)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.
FISCAL EFFECT : Unknown.
COMMENTS :
Purpose of the bill : According to the author, this bill is a
follow-up to a Bureau of State Audits report from February 2011,
titled "The Indian Gaming Special Distribution Fund" (Report
2010-036).
The SDF was established as a component of the original
state-tribal compact agreements as signed in 1999. One of the
purposes of the Fund is to support local government mitigation
monies to local governments impacted by tribal government
gaming.
The author states that the current statute pertaining to the
DOF's and the CGCC's role in the process of determining
potential appropriations from the SDF for local mitigation
implies that there is a specific and precise means of
"calculating" the "total revenue" in the Fund which shall be
available for appropriation by the Legislature.
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Current law does not provide a specific recommendation but
merely a calculation of the total revenue in the SDF. The SDF
would be better served if a specific recommendation was put
forth by DOF, in consultation with the CGCC. The recommendation
would not only assist in providing a long term sustainability of
the Fund but would provide the Legislature with a baseline
allocation to work from.
The goal of the bill is to ensure solvency within the SDF while
allowing for a reasonable mitigation appropriation each year to
the communities surrounding the 21 tribes who continue to pay
into the SDF, as mandated in the existing 1999 compacts.
Over the last five years, when the SDF was perceived by DOF to
have a structural imbalance with expenditures exceeding
revenues, the amount of the annual SDF mitigation allocation has
been left for the Legislature to determine via legislation per a
Governor's signature.
According to the author, these local mitigation funds are vital
to many local communities and counties throughout the state, as
they support critically important allowable purposes such as
public safety, fire and transportation. In lean budgetary
years, local governments have depended on SDF allocations to
mitigate the costs associated with having tribal casinos within
their jurisdictions.
Lastly, the author points out, that the SDF is distinct from the
General Fund and the monies included in the Fund may not be used
for purposes other than specified tribal gaming-related purposes
as stated in current law.
Background :
Indian Gaming Special Distribution Fund : In 1999, anticipating
voter approval of Proposition 1A, the governor negotiated and
the Legislature approved legislation ratifying compacts with
many tribes. The State eventually entered into 61 of these
tribal-state gaming compacts (1999-model compacts). The
1999-model compacts later received final federal approval as
required by the IGRA, and they are effective until December 31,
2020. In consideration for the State's willingness to enter
into these compacts, the tribes agreed to provide to the State,
on a sovereign-to-sovereign basis, a portion of their revenues
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from gaming devices in the form of license and operation fees.
These fees provide money for two funds: the IGRSTF, which
distributes money to tribes that do not have compacts or that
have compacts and operate fewer than 350 gaming devices, and the
IGSDF. The SDF funds are to be used for purposes as stated
above in the analysis. The SDF has been consistently used to
cover shortfalls in the RSTF. Most recently, just over half of
the funds for the latest RSTF quarterly payment of $275,000 per
tribe were drawn from machine license fees, and the rest was
drawn from the SDF to cover the shortfall.
ISDF 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; (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.
ISDF 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 to 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, 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. AB 2515 (Hall), Chapter
704, Statutes of 2012, also appropriated $9.1 million from the
SDF for mitigation grants.
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Prior legislation : AB 2515 (Hall), Chapter 704, Statutes of
2012. Strengthens procedures governing the awarding of grants
from the SDF to ensure that the funds are properly used to
mitigate costs associated with tribal gaming. In addition,
appropriates $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.
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 bill required 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. Extended 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 SDF to
be allocated by the CGCC for local projects that mitigate the
impacts of tribal gaming.
SB 621 (Battin), Chapter 858, Statutes of 2003. Established
priorities and procedures for funding to local governments from
the SDF for the purpose of mitigating impacts from tribal
casinos. In addition, required DOF, in consultation with CGCC,
to calculate the total revenue in SDF that will be available for
the current budget year for local government agencies impacted
by tribal gaming. This information must be included in the May
Budget revision.
REGISTERED SUPPORT / OPPOSITION :
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Support
Barona Band of Mission Indians
Santa Ynez Band of Chumash Indians
Table Mountain Rancheria
Opposition
None on file
Analysis Prepared by : Eric Johnson / G. O. / (916) 319-2531