BILL ANALYSIS                                                                                                                                                                                                    Ó



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          ASSEMBLY THIRD READING
          AB 1245 (V. Manuel Pérez) 
          As Amended  July 3, 2013
          2/3 vote.  Urgency 

           SUMMARY  :  Ratifies a tribal-state gaming compact (Compact)  
          entered into between the State of California and the Ramona Band  
          of Cahuilla.  Once effective (legislative ratification and  
          federal approval required), this Compact will be in full force  
          and effect for state law purposes until December 31, 2033.   
          Specifically,  this bill  ratifies:

          The tribal-state gaming compact between the State of California  
          (State) and the Ramona Band of Cahuilla (Tribe), located in  
          Riverside County, California, which was executed on June 10,  
          2013, and allows the operation of up to 750 gaming devices and  
          banking or percentage card games.  

          The Compact makes it explicit that the Tribe shall not be  
          authorized to operate the game known as roulette, whether or not  
          played with or on a mechanical, electro-mechanical, electrical,  
          or video device, or cards, or any combination of such devices,  
          or the operation of any game that incorporates the physical use  
          of a die or dice.  The Tribe will share up to 10% of their  
          revenue with tribes that are not gaming or that are otherwise  
          not substantially benefitting from gaming, as defined.  The  
          Compact requires regular audits of gaming operations and other  
          enforcement and public safety measures.  

          The Compact includes provisions to protect employees and patrons  
          as well as measures to protect the environment during the  
          construction and operation of gaming facilities.  It also funds   
             local programs to mitigate the effect of gaming activities  
          and addresses gambling addiction issues.  

          Contains an urgency clause allowing this bill to take effect  
          immediately upon enactment.
                     
           EXISTING LAW  :

          1)Provides, under the federal Indian Gaming Regulatory Act  
            (IGRA), for the negotiation and conclusion of compacts between  
            federally recognized Indian tribes and the state for the  
            purpose of conducting Class III gaming activities on Indian  
            lands within a state as a means of promoting tribal economic  








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            development, self-sufficiency, and strong tribal governments.   
            Existing law expressly authorizes a number of tribal-state  
            gaming compacts between the State and specified Indian tribes.
             
          2)Authorizes the conduct of Class III gaming activities to the  
            extent such activities are permitted by state law, a gaming  
            compact has been concluded by a federally recognized tribe and  
            the state, and the compact has been approved by the Secretary  
            of the Interior.  

          3)Limits, under IGRA, the operation of Class III gaming  
            activities to Indian lands acquired on or before October 17,  
            1988.  Existing law also provides for certain exceptions to  
            conduct gaming activities on Indian lands acquired after  
            October 17, 1988.

          4)Defines, under IGRA, Indian lands to mean all lands within the  
            limits of any Indian reservation, and any lands title to which  
            is either held in trust by the United States for the benefit  
            of any Indian tribe or individual or held by any Indian tribe  
            or individual subject to restriction by the United States  
            against alienation and over which an Indian tribe exercises  
            governmental power.

          5)Requires, under IGRA, the state to negotiate to conclude a  
            compact in good faith with an Indian tribe having jurisdiction  
            over the Indian lands upon which the Class III gaming activity  
            is to be conducted.  Existing law also provides the United  
            States district courts with jurisdiction over any cause of  
            action initiated by a tribal government alleging that the  
            state failed to negotiate in good faith to conclude a compact.  
             Furthermore, existing law prescribes the remedy, mediation  
            supervised by the courts, if it is found that the state failed  
            to negotiate in good faith to conclude a compact.

          6)Authorizes the Governor, under the California Constitution, to  
            negotiate and conclude     compacts, subject to ratification  
            by the Legislature.  In total, the State of California has  
            signed and ratified Tribal-State Gaming Compacts with 70  
            Tribes.  There are currently 59 casinos operated by 58 Tribes.

           FISCAL EFFECT  :  Unknown

           COMMENTS  :   









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            Background  :  As per the Compact's preamble, the Ramona Band of  
          Cahuilla's Reservation (Reservation) is located at the base of  
          Thomas Mountain, in Anza, California.  The Reservation was  
          created by a February 10, 1893 Executive Order issued pursuant  
          to the Mission Indian Relief Act, 26 Stat. 712 (1891), lies  
          within the aboriginal territory of the Cahuilla Indians which  
          the Tribe has occupied continuously since time immemorial, and  
          currently consists of the original 560 acres that the 1893 Order  
          reserved in federal trust for the exclusive use and benefit of  
          the Tribe and its members.  The Reservation is within the San  
          Bernardino National Forest, surrounded predominantly by U.S.  
          Forest Service and U.S. Bureau of Land Management lands, and has  
          no electric utility service.  

          The membership consists of 13 tribal members of which  
          approximately seven live on the Reservation.  The General  
          Council of the Ramona Band of Cahuilla is the governing body of  
          the Tribe with the power and authority to act on all government  
          and business matters.  And, in accordance with custom and  
          tradition, the General Council also elects the Tribal Council  
          and the Tribal Chairperson. 

          The Compact provides that the Tribe may engage in Class III  
          Gaming only on eligible Indian lands held in trust for the  
          Tribe, at a single gaming facility located within the boundaries  
          of the Ramona Band of Cahuilla as those boundaries exist as of  
          the execution date of this Compact, as described.  

          Additionally, the State and the Tribe recognize that the  
          exclusive rights that the Tribe will enjoy under this Compact  
          create a unique opportunity for the Tribe to operate a Class III  
          gaming facility in an economic environment free of competition  
          from the operation of gaming devices and banked card games on  
          non-Indian lands in California and that this unique economic  
          environment is of great value to the Tribe.

          In consideration of the exclusive rights enjoyed by the Tribe to  
          engage in the gaming activities and to operate up to 750 gaming  
          devices and the other meaningful concessions offered by the  
          State in good faith negotiations, and pursuant to IGRA, the  
          Tribe has agreed to provide the State, on a  
          sovereign-to-sovereign basis, and to local jurisdictions, fair  
          cost reimbursement and mitigation from revenues derived from the  
          gaming devices operated pursuant to this Compact on a specified  
          payment schedule.








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          The preamble states, that the Tribe and the State share an  
          interest in mitigating the off-reservation impacts of the gaming  
          facility, affording meaningful consumer and employee protections  
          in connection with the operations of the gaming facility, fairly  
          regulating the gaming activities conducted at the gaming  
          facility, and fostering a good-neighbor relationship.

          This Compact will afford the Tribe primary responsibility over  
          the regulation of its gaming facility and will enhance the  
          Tribe's economic development and self-sufficiency.  Furthermore,  
          the State and the Tribe have concluded that this Compact  
          protects the interests of the Tribe and its members, the  
          surrounding community, and the California public, and will  
          promote and secure long-term stability, mutual respect and  
          mutual benefits.  

           Key Provisions of the Compact  :

          1)Requires the Tribe, prior to the commencement of a "project,"  
            as defined, to follow certain procedures and enter into  
            specified agreements (e.g., environmental and  
            intergovernmental) for such undertakings and services that  
            mitigate the impacts of the gaming facility on affected  
            jurisdictions (County).

          2)On December 18, 2012, the Riverside County Board of  
            Supervisors approved a Memorandum of Understanding (MOU) with  
            the Tribe to address and mitigate significant effects to the  
            off-reservation environment which may occur as a result of a  
            gaming project on the Reservation.  The Tribe has agreed to  
            work with the County regarding compensation for law  
            enforcement, fire protection, emergency medical services, and  
            other public services provided by the County as a result of  
            the Tribe's gaming facility.

          3)Stipulates that the gaming operation or business operation  
            authorized under this compact shall be owned solely by the  
            Tribe and limits the Tribe to the operation of 750 gaming  
            devices on eligible Indian lands held in trust for the Tribe  
            at a single gaming facility located within the boundaries of  
            the Reservation.

          4)In addition to any Class II games, the Tribe is authorized to  
            operate gaming devices (slot machines), banking or percentage  








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            card games, and any devices or games that are authorized under  
            state law to the California State Lottery.  The Tribe may not  
            operate roulette games (table or mechanical) or any game that  
            incorporates the physical use of a die or dice.  The Tribe  
            shall not engage in Class III Gaming that is not expressly  
            authorized in the compact.

          5)Provides that the Tribe is not required to make payments to  
            the State Gaming Agency for deposit into the Revenue Sharing  
            Trust Fund (RSTF) or the Tribal Nation Grant Fund, if it  
            operates 350 or fewer gaming devices. 

          6)If the Tribe operates more than 350 gaming devices at any time  
            in a given calendar year it must pay 10% of its Net Win from  
            the operation of those devices in excess of 350 to the State  
            Gaming Agency for deposit into RSTF or the Tribal Nation Grant  
            Fund.  The Compact outlines quarterly payment terms, as  
            specified. 

          7)Requires the Tribe to pay into the Special Distribution Fund  
            (SDF), on a pro rata basis, the actual and reasonable  
            regulatory costs the State incurs for the performance of all  
            its duties under this Compact.  The Tribe's pro rata share  
            will be calculated using the following equation: 

               The maximum number of Gaming Devices operated in the  
               Gaming Facility for the previous fiscal year as  
               determined by the State Gaming Agency, divided by the  
               maximum number of Gaming Devices operated by all  
               federally recognized tribes in California pursuant to  
               tribal-state Class-III Gaming compacts during the  
               previous fiscal year, multiplied by Costs, equals the  
               Tribe's pro rata share.

          8)Includes Eco-Resort Standards for development of a gaming  
            project consistent with the Tribe's desire to limit  
            environmental impacts through the use of green building  
            materials and renewable energy.

           Additional Provisions of the Compact  :

           Patron Protections  - The Tribe agrees to binding arbitration  
          before a single arbitrator, who shall be a retired judge, for  
          disputes over patron injuries and gambling.  Also, provides that  
          the Tribe agrees to waive sovereign immunity in order to be  








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          compelled in federal or state court to abide by the resolution  
          of arbitration.  
          
           Environmental Protections  - The Tribe must prepare a Tribal  
          Environmental Impact Report (TEIR) and negotiate mitigation of  
          any off-reservation impacts.  The Tribe's failure to prepare an  
          adequate TEIR when required shall be deemed a breach of this  
          compact and furthermore shall be grounds for issuance of an  
          injunction or other appropriate equitable relief.  Also,  
          provides for binding arbitration if an intergovernmental  
          agreement with the County of Riverside is not entered into  
          within 75 days of the submission of the final TEIR.
          
           Employee Protections  - The Tribe has agreed to participate in  
          the state's workers' compensation system and unemployment  
          insurance program and to consent to the jurisdiction of the  
          state agencies and courts enforcing all of those standards.
           
           Enhanced Audit and Compliance Review Procedures  - In addition to  
          providing for an annual independent audit, the Compact allows  
          the state to conduct its own annual audit and compact compliance  
          review.

           Inspection and Testing of Gaming Devices  - Gaming devices will  
          have to be tested, approved and certified by an independent  
          gaming test laboratory and the tribal gaming agency to ensure  
          that they are being operated according to specified technical  
          standards.  The State Gaming Agency would be authorized to  
          annually conduct up to four random inspections of slot machines  
          in operation to confirm that the gaming devices are operating in  
          conformance with these standards. 

           Minimum Internal Control Standards (MICS)  - The Tribe must adopt  
          and comply with standards that meet or exceed the federal  
          National Indian Gaming Commission standards.  The MICS are  
          incorporated in this Compact as an appendix (Appendix C), which  
          shall be updated periodically by the State Gaming Agency and  
          Tribal Gaming Agency, to ensure the MICS keep up with changing  
          technology and industry standards. 

           Problem Gambling  - The Tribal Gaming Agency must establish a  
          program to mitigate pathological and problem gaming by  
          implementing measures that train supervisors and floor employees  
          on identifying and managing problem gambling.  Additionally, the  
          Tribe must include a responsible gaming message in advertising,  








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          provide signage and education materials at conspicuous locations  
          aimed at preventing problem gambling, establish self-exclusion  
          and involuntary exclusion programs, and adopt a code of conduct  
          derived from the American Gaming Association's code. 

           Labor Relations  - Provides that the gaming activities authorized  
          by this compact may only commence after the Tribe has adopted an  
          ordinance identical to the Tribal Labor Relations Ordinance  
          (TRLO), referenced as Appendix D of the Compact, and the gaming  
          activities may only continue as long as the Tribe maintains the  
          ordinance.  If the Tribe employs 250 or more persons in a tribal  
          casino facility, then the provisions of the TLRO become  
          effective.  The TLRO provides for a secret ballot election.  

           Tobacco and Alcohol Provisions  - The Tribe agrees to provide a  
          non-smoking area in the gaming facility that exists as of the  
          effective date of this Compact and to utilize a ventilation  
          system throughout the gaming facility that exhausts tobacco  
          smoke to the extent reasonably feasible and not to offer or sell  
          tobacco to anyone that is under 18 years of age.  Makes it  
          explicit that the purchase, sale, and service of alcoholic  
          beverages shall be subject to state law. 

           Prohibitions Regarding Minors  - The Tribe shall prohibit persons  
          under the age of 21 years from being present in any room or area  
          in which gaming activities are being conducted unless the person  
          is en route to a nongaming area of the gaming facility, or is  
          employed at the Gaming Facility in a capacity other than as a  
          gaming employee.

           Exclusivity  - In the event the exclusive right of Indian tribes  
          to operate Class III Gaming in California pursuant to Article  
          IV, Section 19(f) of the California Constitution is lost and  
          other non-Indian entities legally are able to engage in Class  
          III Gaming the Tribe shall have the right to terminate this  
          Compact, in which case the Tribe will lose the right to operate  
          gaming devices and other Class III Gaming authorized by this  
          Compact; or continue under this Compact.

           Effective Date  - This Compact shall not be effective unless and  
          until it is ratified by the Legislature and notice of approval  
          or constructive approval is published in the Federal Register as  
          provided by IGRA.  Once effective, this Compact shall be in full  
          force and effect for state law purposes until December 31, 2033.  
           Also, if this Compact does not take effect by July 1, 2014, it  








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          shall be deemed null and void.
           
          Additional Background Information  :

           Indian Gaming Regulatory Act  :  In 1988, Congress enacted the  
          Indian Gaming Regulatory Act (IGRA) to provide a statutory basis  
          for the operation and regulation of gaming on Indian lands.   
          IGRA provides that an Indian tribe may conduct gaming activity  
          on Indian lands if the activity "is not specifically prohibited  
          by federal law and is conducted within a State which does not  
          prohibit such gaming activity."

          The statute divides gaming activities into three classes (Class  
          I, Class II, and Class III), each subject to different  
          regulations.  Class III Gaming includes such things as slot  
          machines, casino games and banked card games such as black jack  
          and baccarat.  Class III Gaming may only be conducted under  
          terms of a compact negotiated between an Indian tribe and a  
          state.  Class II Gaming is defined to include bingo and card  
          games that are explicitly authorized by the laws of the state,  
          or that are not explicitly prohibited by the laws of the state  
          and are played at any location in the state, so long as the card  
          games are played in conformity with those laws and regulations.

          IGRA was enacted against a legal background in which Indian  
          tribes and individuals generally are exempt from state taxation  
          within their own territory.  IGRA provides that with the  
          exception of assessments permitted under the statute, to defray  
          the state's costs of regulating gaming activity, IGRA shall not  
          be interpreted as conferring upon a state authority to impose  
          any tax, fee, charge, or other assessment upon an Indian tribe  
          to engage in Class III activity.  Nor may a state refuse to  
          enter into negotiations based on the lack of authority to impose  
          such a tax, fee, charge, or other assessment.  

          When a tribe requests negotiations for a Class III compact, IGRA  
          requires the state to negotiate with the Indian tribe in good  
          faith.  IGRA provides a comprehensive process to prevent an  
          impasse in compact negotiations, which is triggered when a tribe  
          files suit alleging that the state has refused to negotiate or  
          has failed to negotiate in good faith.

           Compact Negotiation and Ratification  : The California State  
          Constitution, as amended by Proposition 1A of March 2000,  
          permits Indian tribes to conduct and operate slot machines,  








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          lottery games, and banked and percentage card games on Indian  
          land.  These gambling activities can only occur if:  1) the  
          Governor and an Indian tribe reach agreement on a compact, 2)  
          the Legislature approves the compact, and 3) the federal  
          government approves the compact. 

          The Governor is the designated state officer responsible for  
          negotiating and executing, on behalf of the State, tribal-state  
          gaming compacts with federally recognized Indian tribes located  
          within the State of California.  Following completion of  
          negotiations, the Governor shall submit a copy of any executed  
          tribal-state compact to both houses of the Legislature for  
          ratification and shall submit a copy of the executed compact to  
          the Secretary of State and it then must be approved and  
          published in the Federal Register by the U.S. Secretary of the  
          Interior.  
           
          Related legislation  :  AB 277 (Hall) of the current legislative  
          session.  Ratifies tribal-state gaming compacts entered into  
          between the State and the North Fork Rancheria Band of Mono  
          Indians of California, executed on August 31, 2012, and the  
          State of California and the Wiyot Tribe, executed on March 20,  
          2013. (Pending the Governor's signature)

          SB 668 (Fuller) of the current legislative session.  Ratifies  
          the tribal-state gaming compact entered into between the State  
          and the Fort Independence Indian Community of Paiute Indians,  
          executed on February 28, 2013.  (Pending in the Senate)

          Prior legislation  :  AB 1267 (Hall), Chapter 6, Statutes of 2013.  
           Ratified the amendment to a tribal-state gaming compact entered  
          into between the State and the Shingle Springs Band of Miwok  
          Indians, executed on November 15, 2012.

          AB 517 (Hall), Chapter 12, Statutes of 2012.  Ratified the  
          tribal-state gaming compact entered into between the State and  
          the Federated Indians of Graton Rancheria of Sonoma County,  
          executed on March 27, 2012.  

          AB 787 (Chesbro), Chapter 340, Statutes of 2012.  Ratified the  
          amendment to the tribal-state gaming compact entered into  
          between the State and the Coyote Valley Band of Pomo Indians,  
          executed on July 25, 2012.

          AB 1418 (Hall), Chapter 412, Statutes of 2011.  Ratified a  








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          revised tribal-state gaming compact between the State and  
          Pinoleville Pomo Nation, authorizing the Tribe to commence Class  
          III Gaming with up to 900 gaming devices, executed on August 8,  
          2011.  Required contributions to the SDF and the RSTF, as  
          specified, instead of requiring revenue contributions to the  
          General Fund.

          AB 1020 (Chesbro), Chapter 27, Statutes of 2011.  Ratified a  
          revised compact between the State and the Habematolel Pomo of  
          Upper Lake executed by Governor Brown on March 17, 2011.   
          Authorized the Tribe to operate up to 750 gaming devices with up  
          to 15% of the Net Win from those gaming devices be paid to the  
          SDF and RSTF, instead of requiring revenue contributions to the  
          General Fund.

          AB 122 (Coto), Chapter 3, Statutes of 2010.  Ratified the  
          tribal-state gaming compact entered into between the State and  
          the Pinoleville Pomo Nation executed by the Governor on March  
          10, 2009.

          SB 106 (Wiggins), Chapter 37, Statutes of 2007.  Ratified a new  
          compact between the State and the Yurok Tribe of the Yurok  
                                                                   Reservation.  

          SB 174 (Ducheny), Chapter 39, Statutes of 2007.  Ratified the  
          first compact amendment to the compact between the State and  
          Sycuan Band of the Kumeyaay Nation.

          SB 175 (Ducheny), Chapter 38, Statutes of 2007.  Ratified the  
          first compact amendment to the compact between the State and the  
          Morongo Band of Mission Indians.

          SB 903 (Padilla), Chapter 40, Statutes of 2007.  Ratified the  
          first compact amendment to the compact between the State and the  
          Pechanga Band of Luiseño Indians.

          SB 941 (Padilla), Chapter 226, Statutes of 2007.  Ratified the  
          first compact amendment to the compact between the State and the  
          San Manuel Band of Serrano Mission Indians.

          SB 957 (Torlakson), Chapter 41, Statutes of 2007.  Ratified the  
          first compact amendment to the compact between the State and the  
          Agua Caliente Band of Cahuilla Indians.

          SB 470 (Ducheny), Chapter 527, Statutes of 2006.  Ratified the  








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          first amendment to the compact between the State and the Quechan  
          Tribe of the Fort Yuma Reservation. 

          SB 1117 (Burton), Chapter 856, Statutes of 2004.  Ratified two  
          new and two amended compacts entered into between the State and  
          the following tribes:  Coyote Valley Band of Pomo Indians (new  
          compact); Fort Mojave Indian Tribe (new compact); Buena Vista  
          Rancheria of Me-Wuk Indians (amended compact); and, Ewiiaapaayp  
          Band of Kumeyaay Indians (amended compact).

          AB 687 (Núñez), Chapter 91, Statutes of 2004.  Ratified  
          amendments to five compacts entered into between the State and  
          the following tribes:  Pala Band of Mission Indians; Pauma Band  
          of Luiseno Mission Indians of the Pauma and Yuima Reservation;  
          Rumsey Band of Wintun Indians; United Auburn Indian Communities;  
          and, Viejas Group of Kumeyaay Indians.  Provides for the  
          issuance of bonds in an amount not to exceed $1.5 billion by the  
          California Infrastructure and Economic Development Bank and  
          requires the net proceeds of the sale of the compact assets to  
          be deposited in the Traffic Congestion Relief Fund and the  
          Transportation Deferred Investment Fund.

          SB 930 (Burton), Chapter 802, Statutes of 2003.  Ratified a  
          compact between the State and the Torres-Martinez Desert  
          Cahuilla Indians.

          SB 411 (Ducheny), Chapter 790, Statutes of 2003.  Ratified  
          compacts between the State and the La Posta Band of Diegueno  
          Mission Indians and the Santa Ysabel Band of Diegueno Mission  
          Indians in San Diego County.

          AB 1385 (Battin), Chapter 874, Statutes of 1999.  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.  Ratifies 57 compacts and  
          creates two special funds in the State Treasury (SDF and RSTF)  
          for the deposit of revenues derived from Indian gaming and  
          gaming device licensing fees.   

          SB 287 (Burton), Chapter 409, Statutes of 1998.  Ratified 11  
          compacts negotiated between the State and Indian tribes that  
          permitted Class III gaming devices on tribal lands and  
          established a process for ratifying other compacts.

           








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          Analysis Prepared by  :    Eric Johnson / G. O. / (916) 319-2531


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