BILL ANALYSIS �
Bill No: AB
1042
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Roderick D. Wright, Chair
2013-2014 Regular Session
Staff Analysis
AB 1042 Author: Hall
As Amended: May 8, 2013
Hearing Date: June 25, 2013
Consultant: Art Terzakis
SUBJECT
Indian Gaming Special Distribution Fund
DESCRIPTION
AB 1042 makes the following modifications to an existing
provision of law that requires the Department of Finance
(DOF), in consultation with the California Gambling Control
Commission (CGCC) to calculate the total revenue in the
Indian Gaming Special Distribution Fund (SDF) that will be
available for the current budget year for local government
agencies impacted by tribal gaming:
1)Requires DOF, in consultation with the CGCC, to calculate
and also provide a "recommendation" regarding the total
revenue in the SDF and to consider any anticipated
revenue from additional tribal gaming operations.
2)Additionally, requires DOF to include the following
information within its recommendation:
a) The total amount of payments projected to be
received into the SDF during the current and prior
budget years.
b) The total number of tribes and the name of each
tribe that make payments into the SDF.
c) The amount of appropriations made each budget year
in the previous 10 years from the SDF for local
government agencies impacted by tribal gaming.
EXISTING LAW
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Existing federal law, the Indian Gaming Regulatory Act of
1988, provides for the negotiation and execution of
compacts for the purpose of authorizing class III gaming on
Indian lands within a state. Additionally, the California
Constitution authorizes the Governor to negotiate and
conclude compacts, subject to ratification by the
Legislature.
Existing law establishes the Indian Gaming Special
Distribution Fund (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.
Existing law authorizes the Legislature to appropriate
money from the SDF as follows: (1) Grants for programs
designed to address gambling addiction; (2) Grants for the
support of state and local government agencies impacted by
tribal government gaming; (3) Compensation for regulatory
costs incurred by the CGCC and the Department of Justice
(DOJ) in connection with the implementation and
administration of compacts; (4) Payment of shortfalls that
may occur in the Indian Gaming Revenue Sharing Trust Fund
(RSTF); (5) Disbursements for the purpose of implementing
the terms of tribal labor relations ordinances promulgated
in accordance with the terms of the 1999 compacts; and, (6)
Any other purpose specified by law.
Existing law provides that the priority for funding from
the SDF is in the following descending order: (1) To make
payments of any shortfalls that may occur in the RSTF; (2)
Grants for programs designed to address gambling addiction;
(3) Compensation to the CGCC and DOJ for regulatory
functions that directly relates to Indian gaming; and, (4)
Grants for the support of local government agencies
impacted by tribal gaming.
Existing law, Government Code Section 12713, requires the
DOF, in consultation with the CGCC, to calculate the total
revenue in the SDF that will be available for the current
budget year for local government agencies impacted by
tribal gaming. The DOF is also required to include this
information in the May Budget revision.
Existing law establishes the RSTF in the State Treasury for
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the receipt and deposit of moneys derived from gaming
device license fees paid by Indian tribes with 1999
compacts. Money in that fund is available to the CGCC,
upon appropriation by the Legislature, for distribution to
non-compact tribes, according to the terms of the compacts.
Existing law requires the CGCC to annually determine the
aggregate amount necessary to make up the difference
between $1.1 million and the actual amount paid to each
eligible recipient Indian tribe during the Fiscal Year from
the RSTF. The CGCC must report the amount of the
deficiency to the Budget Committees in each house of the
Legislature. Upon appropriation by the Legislature, the
CGCC shall make payments to eligible recipient tribes, as
specified.
BACKGROUND
Purpose of AB 1042 : According to the author's office, this
measure is a follow-up to a California State Auditor's
report from February 2011, titled "The Indian Gaming
Special Distribution Fund" (Report 2010-036). In general,
the State Auditor 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's office states that this
measure is intended to provide more detail during the
budget process so that the Legislature is better informed
to determine the funding level for local mitigation grants.
The author's office points out that current law does not
require DOF to provide a specific recommendation as to how
the funds should be spent - it merely requires a
calculation of the total revenue in the SDF. It is the
author's belief that the SDF would be better served if a
specific recommendation was put forth by DOF, in
consultation with the CGCC. Such a recommendation would
assist in providing a long term sustainability of the SDF
and a baseline allocation to work from.
2013-14 Budget Bill: The Budget bill does not include
funding for mitigation grants to local government agencies
impacted by tribal gaming. According to DOF, the SDF
condition statement reflects a reserve of $6.7 million,
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which represents approximately one-quarter of budgeted
support expenditures. Recent compact revisions have
increased tribal payments into the SDF and the RSTF
significantly improving the long-term solvency of the SDF.
Unfortunately, the structural imbalance persists.
According to DOF, at the end of 2013-14, the SDF is
projected to: (a) have a $16.2 million balance (including a
prudent reserve of $6.7 million), (b) fall below the
recommended reserve level in 2014-15, and (c) have a
negative fund balance in 2015-16.
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 Me-Wuk
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.
PRIOR/RELATED LEGISLATION
AB 1426 (Government Organization), 2013-14 Session. Would
reorganize statutes pertaining to Indian gaming compacts
primarily by moving them to a newly created Title 16.5 on
Tribal Gaming in the Government Code. AB 1426 would also
make other minor, technical, nonsubstantive changes to
these provisions. (Pending on Senate floor)
AB 2515 (Hall), Chapter 704, Statutes of 2012. Modified
the procedures governing the award of local mitigation
grants from the SDF to require grant applications to the
Indian Gaming Local Community Benefit Committee to clearly
show how the grant will mitigate the impact of the
specified casino and appropriated $9.1 million from the
SDF.
AB 1417 (Governmental Organization), Chapter 736, Statutes
of 2011. As introduced, this measure would have
reorganized statutes pertaining to Indian gaming compacts
primarily by moving them to a newly created Title 16.5 on
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Tribal Gaming in the Government Code. AB 1417 was
subsequently gutted in this committee to become the vehicle
for the distribution of $9.1 million from the SDF to the
CGCC to provide grants to local agencies.
AB 1039 (Perea) 2011-12 Session. Would have declared the
intent of the Legislature to establish a fair and
proportionate system to award SDF grants. (Held in
Assembly Rules Committee)
AB 742 (Nestande) 2011-12 Session. Would have required
grant applicants applying for local mitigation funding from
the SDF to demonstrate how the grant will be used to
mitigate the impact of a casino and would have required all
local Indian Gaming Local Benefit Committees adopt a
conflict of interest code. AB 742 was gutted in this
committee (new author also - Bonnie Lowenthal), to prohibit
a single mining operation proposed in Riverside County at a
location that the Pechanga Tribe considers a most important
sacred place. (Held in Senate Rules Committee)
SB 856 (Budget and Fiscal Review), 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 State Auditor
relative to the allocation and use of SDF proceeds.
SB 288 (Battin), Chapter 13, Statutes of 2006.
Appropriated $20 million from the SDF for grants to local
jurisdictions impacted by tribal gaming.
SB 621 (Battin), Chapter 858, Statutes of 2003. Among
other things, established, until 1/1/2009, 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
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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
$50,568,788 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.
SUPPORT: As of June 21, 2013:
Barona Band of Mission Indians
California State Sheriffs' Association
Santa Ynez Band of Chumash Indians
Sycuan Band of Kumeyaay Indians
Table Mountain Rancheria
OPPOSE: None on file as of June 21, 2013.
FISCAL COMMITTEE: Senate Appropriations Committee