BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                            



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                                 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.
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           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  

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             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  

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          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  

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             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  

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             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  

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             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.


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           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

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