BILL ANALYSIS �
AB 1042
Page 1
ASSEMBLY THIRD READING
AB 1042 (Hall)
As Amended May 8, 2013
Majority vote
GOVERNMENTAL ORGANIZATION 16-0 APPROPRIATIONS 17-0
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|Ayes:|Hall, Nestande, Bigelow, |Ayes:|Gatto, Harkey, Bigelow, |
| |Chesbro, Cooley, Gray, | |Bocanegra, Bradford, Ian |
| |Hagman, | |Calderon, Campos, |
| |Roger Hern�ndez, Jones, | |Donnelly, Eggman, Gomez, |
| |Jones-Sawyer, Levine, | |Hall, Ammiano, Linder, |
| |Medina, Perea, V. Manuel | |Pan, Quirk, Wagner, Weber |
| |P�rez, Salas, Waldron | | |
| | | | |
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SUMMARY : Requires the Department of Finance (DOF), in
consultation with the Gambling Control Commission (GCC), to
provide a recommendation regarding the anticipated revenue that
will be available in the Indian Gaming Special Distribution Fund
(SDF or IGSDF) from any additional tribal gaming operations. In
addition, this bill specifically requires DOF to provide to the
Legislature the following information during the annual budget
process:
1)The total amount of projected payments in accordance with all
ratified tribal gaming compacts.
2)The total amount of payments received into the SDF in the
prior year.
3)The total number of tribes that make payments into the SDF.
4)The name of each tribe that makes payments into the SDF.
5)The amount of appropriations made each budget year in the
previous 10 years from the SDF to local government agencies.
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.
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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).
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
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responsible for establishing all application policies and
procedures for grants from the casino accounts.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, costs of providing the required information during
the budget process should be minor and absorbable within
existing DOF resources.
COMMENTS :
Purpose of the bill : According to the author, this bill is a
follow-up to a California State Auditor (CSA) report from
February 2011, titled "The Indian Gaming Special Distribution
Fund" (Report 2010-036). In that audit, CSA generally found a
need for increased oversight over the use of the local
mitigation grants that are provided to certain local governments
in order to mitigate the impact of an Indian casino. The author
hopes that by requiring DOF to provide more detail during the
budget process, it will give the Legislature the information it
needs to determine the funding level for local mitigation
grants.
The author asserts that the current statute pertaining to the
DOF's and the GCC'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 SDF which shall be available for appropriation by
the Legislature.
Current law does not require DOF to provide a specific
recommendation for how the funds should be spent. It merely
requires a calculation of the total revenue in the SDF,
according to the author. The author believes that the SDF would
be better served if a specific recommendation was put forth by
DOF, in consultation with the GCC. 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.
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
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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
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
SDF. Unfortunately, the fee structure established in the 1999
compacts designed to support the $1.1 million payments to the
non-compact and limited gaming tribes does not generate a
sufficient level of funding necessary to support this
obligation, thus necessitating annual transfers (approximately
$33.5 million in 2012-13) from the SDF to address this
shortfall. The SDF funds are to be used for purposes as stated
above in the analysis.
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
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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.
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
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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.
Analysis Prepared by : Eric Johnson / G. O. / (916) 319-2531
FN: 0000898