BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 668| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- UNFINISHED BUSINESS Bill No: SB 668 Author: Fuller (R), et al. Amended: 6/27/13 Vote: 27 - Urgency SENATE FLOOR : 37-0, 4/29/13 AYES: Anderson, Beall, Berryhill, Block, Calderon, Cannella, Corbett, Correa, De León, DeSaulnier, Emmerson, Evans, Fuller, Gaines, Galgiani, Hancock, Hernandez, Hill, Hueso, Huff, Jackson, Knight, Lara, Leno, Lieu, Monning, Nielsen, Padilla, Pavley, Price, Roth, Steinberg, Walters, Wolk, Wright, Wyland, Yee NO VOTE RECORDED: Liu, Vacancy, Vacancy ASSEMBLY FLOOR : 70-0, 7/1/13 - See last page for vote SUBJECT : Tribal gaming: compact ratification SOURCE : Author DIGEST : This bill ratifies the tribal-state gaming compact (Compact) entered into between the State of California and the Fort Independence Indian Community of Paiute Indians, executed on February 28, 2013; and provides that, in deference to tribal sovereignty, certain actions are not deemed projects for purposes of the California Environmental Quality Act (CEQA). Stipulates, except as expressly provided, that none of the provisions shall be construed to exempt a city, county, or city and county, or the Department of Transportation from CEQA requirements. CONTINUED SB 668 Page 2 Assembly Amendments add an urgency clause. ANALYSIS : Existing law: 1. Provides, under the 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 development, self-sufficiency, and strong tribal governments. 2. Expressly authorizes a number of tribal-state gaming compacts between the State of California and specified Indian tribes. 3. 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. 4. Limits the operation of Class III gaming activities to Indian lands acquired on or before October 17, 1988. Provides for certain exceptions to conduct gaming activities on Indian lands acquired after October 17, 1988. 5. Defines 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 U.S. against alienation and over which an Indian tribe exercises governmental power. 6. Requires 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. Provides the U.S. 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. Prescribes the remedy, mediation supervised by the courts, if it is found that the CONTINUED SB 668 Page 3 State failed to negotiate in good faith to conclude a compact. 7. Authorizes the Governor, under the California Constitution, to negotiate and conclude compacts, subject to ratification by the Legislature. This bill ratifies the Compact between the State of California and the Fort Independence Indian Community of Paiute Indians (Tribe) executed on February 28, 2013, and allows the operation of up to 800 gaming devices (slot machines) and any 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. 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. Additionally, the land for the Compact is and has been in trust for the tribe since 1915. Once effective (legislative ratification and federal approval required), this Compact will be in full force and effect for state law purposes until December 31, 2034. Background As per the Compact's preamble, the Fort Independence Community of Paiute Indians is a federally recognized Indian tribe listed in the Federal Register as the Fort Independence Indian Community of Paiute Indians of the Fort Independence Reservation, California. The Tribe has originally and continuously inhabited the Owens Valley and Eastern California since time immemorial and the Tribe's current reservation was established on October 28, 1915, by President Woodrow Wilson's Executive Order, number 2264, creating a permanent home for the Tribe on 360 acres of land adjacent to Oak Creek in CONTINUED SB 668 Page 4 Independence, California. The Tribe is committed to improving the environment, education status, and the health, safety and general welfare of its members and local residents. 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 slot machines 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 800 slot machines 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 slot machines operated pursuant to this Compact on a specified payment schedule. 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 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. 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 800 slot machines on eligible Indian lands held in trust for the Tribe CONTINUED SB 668 Page 5 at a single gaming facility located within the boundaries of the Fort Independence Indian Reservation. 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 slot machines. If the Tribe operates more than 350 slot machines at any time in a given calendar year it must pay 10% of its net win to the State Gaming Agency for deposit into RSTF or the Tribal Nation Grant Fund. The Compact outlines quarterly payment terms, as specified. Requires the Tribe to pay into the Special Distribution Fund, 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 estimates that this will equal $465.00 per device for regulatory fees. 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." 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 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 CONTINUED SB 668 Page 6 intergovernmental agreement with the County of Inyo or the Town of Independence 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 slot machines . Slot machines 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. Authorizes the State Gaming Agency to annually conduct up to four random inspections of slot machines in operation to confirm that the slot machines 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 D), 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, 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 CONTINUED SB 668 Page 7 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 C 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. (The Alcoholic Beverage Control Act) Prohibitions regarding minors . Requires the Tribe to 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, 2034. If this Compact does not take effect by July 1, 2015, it shall be deemed null and void. CONTINUED SB 668 Page 8 FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: No SUPPORT : (Verified 7/1/13) California Labor Federation Fort Independence Indian Community of Paiute Indians Santa Ynez Band of Chumash Indians United Auburn Indian Community of the Auburn Rancheria UNITE-HERE, AFL-CIO ARGUMENTS IN SUPPORT : The United Auburn Indian Community of the Auburn Rancheria writes that "this compact approves gaming on land that the tribe has had in trust for almost 100 years. Ft. Independence plans to play by the rules and stay on its reservation land and within its ancestral territory." The California Labor Federation and UNITE-HERE, AFL-CIO state, "The Fort Independence Tribe has agreed to respect the rights of the tribal gaming employees to seek union representation. We applaud their willingness to join the other California gaming tribes who support enforceable worker rights." ASSEMBLY FLOOR : 70-0, 7/1/13 AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Bigelow, Bloom, Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian Calderon, Campos, Chau, Chávez, Chesbro, Conway, Cooley, Dahle, Dickinson, Eggman, Fong, Fox, Beth Gaines, Garcia, Gatto, Gomez, Gonzalez, Gordon, Gorell, Gray, Grove, Hagman, Harkey, Roger Hernández, Holden, Jones, Jones-Sawyer, Levine, Linder, Lowenthal, Mansoor, Medina, Melendez, Mitchell, Morrell, Mullin, Muratsuchi, Nazarian, Nestande, Olsen, Pan, Patterson, Perea, V. Manuel Pérez, Quirk, Quirk-Silva, Rendon, Salas, Skinner, Stone, Ting, Wagner, Waldron, Weber, Wilk, Williams, John A. Pérez NO VOTE RECORDED: Daly, Donnelly, Frazier, Hall, Logue, Maienschein, Wieckowski, Yamada, Vacancy, Vacancy MW:k 7/2/13 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE CONTINUED SB 668 Page 9 **** END **** CONTINUED