BILL ANALYSIS Ó
AB 315
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB
315 (Bigelow)
As Amended August 20, 2015
2/3 vote. Urgency
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|ASSEMBLY: |77-0 |(April 30, |SENATE: |34-0 |(August 27, |
| | |2015) | | |2015) |
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(vote not relevant)
Original Committee Reference: AGRI.
SUMMARY: Ratifies the amended and restated tribal-state gaming
compact (Compact) entered into between the State of California
(State) and the United Auburn Indian Community (Tribe) executed
on August 14, 2015. Additionally, this bill provides that, in
deference to tribal sovereignty, certain actions are not deemed
projects for purposes of the California Environmental Quality
Act (CEQA); and, 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.
The Senate amendments delete the Assembly version of this bill,
and instead:
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1)Ratify a tribal-state gaming compact entered into in
accordance with the federal Indian Gaming Regulatory Act of
1988 (18 United States Code (U.S.C.) Sections 1166 to 1168,
inclusive, and 25 U.S.C. Section 2701 et seq.) between the
State of California and the Tribe, executed on August 14,
2015.
2)Authorizes the Tribe to operate a maximum of 3,500 gaming
devices at no more than two gaming facilities, and only on
those Indian lands held in trust for the Tribe as of the
execution date of this Compact, as described. The Tribe may
combine and operate in each gaming facility any forms and
kinds of gaming permitted under law, except to the extent
limited under Indian Gaming Regulatory Act (IGRA) and any
applicable regulations adopted pursuant to, this Compact, or
the Tribe's gaming ordinance.
3)Supersedes a 2004 amended compact (AB 687 (Núñez), Chapter 91,
Statutes of 2004) between the Tribe and the State of
California.
4)States once effective, this Compact shall be in full force and
effect for State law purposes until December 31, 2041.
5)Provides that, in deference to tribal sovereignty, certain
actions may not be deemed projects for purposes of the CEQA.
6)Contains an urgency clause, allowing this bill to take effect
immediately upon enactment.
EXISTING LAW:
1)Provides, under 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
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promoting tribal economic development, self-sufficiency, and
strong tribal governments. 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)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.
4)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. 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.
5)Authorizes the Governor, under the California Constitution, to
negotiate and conclude compacts, subject to ratification by
the Legislature.
AS PASSED BY THE ASSEMBLY, this bill would have repealed the
requirement that fairs provide an annual report of the number of
credential and courtesy pass admissions issued; repeal the
requirement that the California Department of Food and
Agriculture spend $100,000 for specified exhibits and $15,000
for a conference of fair exhibit judges.
FISCAL IMPACT: Currently, the Tribe contributes approximately
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$40.4 million per year to the General Fund and an additional $2
million annually to the Revenue Sharing Trust Fund (RSTF) for a
total to the State of $42.4 million in 2014.
Under this Compact, the Tribe will contribute $15 million per
year to the General Fund and the Tribe will have the ability to
direct up to $9 million of the $15 million to finance state and
local infrastructure projects on non-tribal lands in Placer
County (County) that benefit the Tribe and the surrounding
community. The Compact requires the Tribe to pay $18 million
annually to the RSTF - of that $18 million, the Tribe will also
have the ability to take a credit of up to $9 million per year
for non-gaming economic development investments and services to
the County and other local jurisdictions (e.g., fire, law
enforcement, public transit, renewable energy projects).
Furthermore, the Tribe shall pay annually $3 million into the
Special Distribution Fund (SDF) for state agency costs relating
to tribal gaming, including problem gambling programs, the
California Gambling Control Commission (CGCC), the Department of
Justice (DOJ) and the Office of the Governor; and other uses,
including grants to state and local agencies impacted by tribal
gaming, compensation for costs resulting from intra-tribal
disputes, and backfilling any shortfalls in the RSTF.
COMMENTS: On August 25, 2015, the Assembly Governmental
Organization Committee held an informational hearing on the
Amended and Restated tribal-state gaming compact between the
State of California and the Tribe.
Purpose of this bill: Ratifies a Compact between the Tribe and
the State, pursuant to the IGRA of 1988 was executed on August
14, 2015.
The Compact authorizes the Tribe to operate a maximum of 3,500
gaming devices at no more than two gaming facilities, and only
on those Indian lands held in trust for the Tribe as of the
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execution date of this Compact, as described. The Tribe may
combine and operate in each gaming facility any forms and kinds
of gaming permitted under law, except to the extent limited
under IGRA and any applicable regulations adopted pursuant to,
this Compact, or the Tribe's gaming ordinance.
This Compact supersedes a 2004 amended compact (AB 687 (Núñez),
Chapter 91, Statutes of 2004) between the Tribe and the State,
which expires in 2030. The 2004 amended compact replaced the
Tribe's initial compact signed in 1999 with Governor Gray Davis,
who negotiated gambling agreements with more than 60 tribes.
The 2004 amended compact allowed the Tribe to operate an
unlimited number of Class III slot machines in exchange for
payments, as defined, to the state General Fund for machines
added after ratification of the compact. Under the 1999
compact, the Tribe could not operate more than 2,000 gaming
devices.
According to the Governor's office, the terms of this new
Compact reflects a continued commitment by the Tribe to revenue
sharing with non-gaming and limited gaming tribes so that the
economic benefits of gaming reach tribal governments that have
not chosen to operate a tribal casino. Under the terms of this
compact, the Tribe will become one of the largest contributors
($18,000,000 annually) to the RSTF or the Tribal Nation Grant
Fund (TNGF).
The Compact also provide a framework for the sharing of gaming
revenue with the County and other local jurisdictions for fire,
law enforcement, public transit, education, tourism and other
services, and provide incentives for investments in renewable
energy projects, non-gaming related economic development
projects and health care facilities that provide a mutual
benefit to tribal members and local residents. In addition, up
to $9 million may be directed by the Tribe specifically to
finance infrastructure projects on non-Indian lands within the
County that benefit the Tribe and the surrounding community.
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The Governor's office contends that this Compact continues to
assure the protection of the health and safety of the casino
patrons, guests and employees and affirms the role of a
tribal-state association of gaming regulators to provide a
framework within which tribal and state gaming regulators can
exchange information and collaborate to ensure that the gaming
public has continued confidence in the integrity of casino
operations.
Once effective (legislative ratification and federal approval
required), this Compact will be in full force and effect for
State law purposes until 2041 following the effective date.
Brief History and Background: The Tribe is a federally
recognized Native America tribe consisting mostly of Miwok and
Maidu Indians indigenous to the Sacramento Valley region. The
historic Auburn Rancheria is located in the Sierra Nevada
foothills near Auburn, in the County, California. The Tribe has
approximately 425 members, about half of who are under 18 years
old. The Tribe is governed by its tribal council, which
consists of the chairperson, vice-chairperson, treasurer,
secretary and council member at large.
According to information provided by the Tribe, the Auburn
Rancheria was officially established in 1917 when the United
States government purchased 20 acres on the south side of Auburn
for a mixed group of Nisenan Maidu and Miwok Indians that had
been living at the site for many years. Many members fled to
join the Foothill Nisenan at the Auburn village and roundhouse
after being chased out of Sutter, Yuba and Sacramento counties
by American settlers in the late 1800s.
In 1935, 36 adult members of the Auburn Rancheria participated
in self-governance elections conducted by the Bureau of Indian
Affairs. In 1953, Congress enacted the Rancheria Act, which led
to the termination of federal recognition of the Auburn
Rancheria in 1967. Most of the tribe's land at the former
Auburn Rancheria was subsequently lost to tribal ownership.
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In 1991, the Auburn Indians reorganized and adopted a new tribal
constitution. In 1994, the Auburn Indian Recognition Act was
passed by Congress, restoring the tribe's federal recognition as
an Indian tribe, now called the Tribe. The Tribe signed a 1999
tribal-state gaming compact and acquired 50 acres in the Sunset
Industrial Area for a casino and 1,100 acres in Sheridan for
tribal housing. These parcels were taken into trust by the
federal government, and in 2003, the Thunder Valley Casino
Resort opened in Lincoln, CA.
The Tribe notes that in 2000, it signed a groundbreaking
memorandum of understanding with the County, which has been
recognized as meeting the local agreement requirement in
subsequent compact amendments.
In 2004, the Tribe and the State entered into an amendment to
the 1999 Compact, which, among other things, significantly
increased the gaming operation's earning potential and revenue
payments to the State. The compact allowed for unlimited
numbers of slot machines, but those numbers were based on
escalating flat fee per device over the Tribe's 2004-device
count of 1907. The 2004 Amended Compact also provided for a
payment of $2 million per year to the RSTF and payments to the
state's General Fund that amounted to $40.4 million in 2014.
The Tribe's current casino operation, known as the Thunder
Valley Casino Resort, has approximately 2,600 Class III gaming
devices (slot machines), offers 103 table games, a live poker
room with space for 240 players, 14 restaurants and bars, a
hotel, and both indoor and outdoor entertainment venues. The
casino resort complex also employs approximately 2,500 people.
Since opening Thunder Valley Casino Resort, the Tribe has been
able to open a K-8 school for tribal children, a pre-school,
foster care homes, and a program to support tribal elders. The
Tribe provides health care and wellness programs and free
college and skills training to its members.
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The Compact's preamble states that since the time that the State
and the Tribe entered into the 2004 amended compact,
circumstances in the overall economy and the casino gaming
market have changed and that the Tribe and the State desire to
enter into this Compact to ensure that the Tribe is the primary
beneficiary of the gaming operation and can continue to fund
essential tribal government services through gaming revenue.
In addition, in July 2011, the United States Supreme Court ruled
(Rincon v. Schwarzenegger) that payments to California's general
fund constituted an illegal tax on a Tribe. The court ruled
that since the California constitution already provided tribal
gaming exclusivity, the state was not giving something of value
in return for such payments. The "Rincon decision" has changed
the dynamics of tribal-state compact negotiations, as it limit a
state's ability to collect revenue for general fund purposes.
Specifically, the State cannot demand revenue sharing as a
condition for concluding a compact.
The Compact's preamble states that the Tribe and the State agree
that this Compact is designed to enhance the Tribe's economic
development and self-sufficiency and to protect the health,
safety and general welfare interests of the Tribe and its
citizens, the surrounding community, and the California public,
and to promote and secure long-term stability, mutual respect,
and mutual benefits.
Additionally, the Compact's preamble indicates that the State
and the Tribe recognize that the exclusive rights the Tribe
enjoys under this Compact provide a unique opportunity for the
Tribe to continue to engage in the gaming activities 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.
Furthermore, the Compact's preamble states that in consideration
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of the exclusive rights enjoyed by the Tribe to engage in the
gaming activities and to operate gaming devices as specified in
this Compact for an extended term with a substantial reduction
in payments, and the other meaningful concessions offered by the
State in good faith negotiations, and pursuant to IGRA, the
Tribe restates its intent, inter alia, to provide to the State,
on a sovereign-to-sovereign basis, and to local jurisdictions,
fair cost reimbursement and mitigation revenues from the gaming
devices operated pursuant to this Compact on a payment schedule,
as specified.
Key Provisions and Financial Terms of Compact:
Scope of Class III Gaming Authorized: The Tribe is authorized
to operate up to 3,500 gaming devices (slot machines), banking
or percentage 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.
Authorized Gaming Facility: The Tribe may establish and operate
not more than two gaming facilities, and only on those Indian
lands held in trust for the Tribe and on which gaming may
lawfully be conducted under IGRA. Those lands are legally
described in, and represented in a corresponding Appendix in the
Compact.
The gaming operations authorized under this Compact shall be
owned solely by the Tribe.
Exclusivity: This Compact provides that in the event the
exclusive right of Indian tribes to operate Class III gaming in
California pursuant to the California Constitution is nullified
by the enactment, amendment, or repeal of a state statute or
constitutional provision or the conclusive and dispositive
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judicial construction of a statute or the State Constitution by
a California appellate court after the effective date of this
Compact, that gaming devices may lawfully be operated by
non-Indian entities, the Tribe shall have the right to: 1)
terminate this Compact, in which case the Tribe will lose the
right to operate Class III gaming authorized by this Compact or
2) continue under this Compact with entitlement to a reduction
of the rates specified following conclusion of negotiations, to
provide for a) compensation to the State for the reasonable
costs of regulation, as defined; b) reasonable payments to local
governments impacted by tribal government gaming; c) grants for
programs designed to address gambling addiction; and, d) such
assessments as may be permissible at such time under federal
law.
Gaming Ordinance and Regulations: All gaming activities
conducted under this Compact shall, at a minimum, comply with:
1) a gaming ordinance duly adopted by the Tribe and approved in
accordance with IGRA, 2) all rules, regulations, procedures,
specifications, and standards duly adopted by the National
Indian Gaming Commission (NIGC), the Tribal Gaming Agency, and
CGCC, and 3) the provisions of this Compact, as specified.
Payments to the SDF: The Tribe shall pay annually $3 million
into the SDF for the following purposes:
1)To cover its pro rata share of state agency costs relating to
tribal gaming, including problem gambling programs, the CGCC,
the DOJ and the Office of the Governor; and
2)Other uses of the SDF, including grants to state and local
agencies impacted by tribal gaming, compensation for costs
resulting from intra-tribal disputes, and backfilling any
shortfalls in the RSTF.
During each year in which this Compact is in effect, the Tribe's
pro rata share of the State's regulatory costs will be deducted
from the Tribe's quarterly revenue contribution to the State.
The Tribe's pro rata share payment will be paid into the SDF, as
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specified. At the time, each quarterly payment is due, the
Tribe shall submit to the State a report, prepared and certified
by an authorized representative of the gaming operation, as
defined.
Revenue Contribution into the General Fund: The Tribe shall pay
to the State annually a revenue contribution of $15 million but
will receive a credit of up to $9 million per year in exchange
for payments to the County (see below).
Credits to the Tribe for Revenue Contribution Payments: The
State agrees to provide the Tribe with an annual credit for up
to $9 million of the payments otherwise due for the following
purposes: payments by the Tribe to the County, State agency
and/or other local jurisdictions for purposes of financing
infrastructure projects, including but not limited to
construction, repair, maintenance and improvements of structures
and facilities, on non-Indian lands in the County that benefit
the Tribe's gaming operation and the surrounding community.
Payments into Revenue Sharing Trust Fund or the Tribal Nation
Grant Fund. The Tribe shall pay $18 million annually to the
CGCC, for deposit into the RSTF or the TNGF. The State may only
deposit Compact payments into the TNGF, when the RSTF is fully
funded,
Credits Applied to RSTF or the TNGF: The State agrees to
provide the Tribe with an annual credit for up to $9 million of
the payments otherwise due to be paid into the RSTF or TNGF for
the following:
1)Payments by the Tribe to the County and local jurisdictions
operating facilities or providing services within the County
for purposes of improved fire, law enforcement, public
transit, education, tourism, and other services and
infrastructure improvements that serve off-reservation needs
of the County residents as well as those of the Tribe and not
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otherwise required, as defined. Such payments shall be
subject to approval by the County or local jurisdiction in the
County;
2)Payments by the Tribe to reimburse the County for any loss of
property tax revenues, sales tax revenues to the County that
would otherwise be due for retail sales at the Tribe's gaming
facility or transient occupancy tax at the Tribe's hotel if it
were not located on Indian lands. Such reimbursements shall
be subject to approval by the County;
3)Payments to support operating expenses and capital
improvements for non-tribal governmental agencies or
facilities operating within the County;
4)Non-gaming related capital investments and economic
development projects by the Tribe that provide mutual benefits
to the Tribe and the State because, for instance, they have
particular cultural, social or environmental value, or
diversify the sources of revenue for the Tribe's general fund;
5)Investments in, and any funds, including excise taxes, paid to
the State, including excise taxes, in connection with,
renewable energy projects that, in part, serve the gaming
facility, to include facilities that incorporate charging
stations for electric or other zero-emission vehicles that are
available to patrons and employees of the gaming facility.
6)Payments (not including direct or indirect state or federal
funding) to support capital improvements and operating
expenses for facilities within California that provide health
care services to tribal members, Indians, and non-Indians; and
7)Grants to Indians of Maidu or Miwok descent, who are not
members of the Tribe, for educational, cultural or vocational
purposes, or to other federally recognized tribes for
governmental or general welfare purposes.
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Revenue Contribution Reports: The Tribe shall submit to the
State a report, prepared and certified by an authorized
representative of the gaming operation. The report must
include: 1) calculation of the maximum number of gaming devices
operated each day, 2) the Net Win calculation, 3) the amount due
the SDF, 4) calculation of the amount due to the RSTF/TNGF, and
5) the total amount of the quarterly payment.
Additional Compact Components:
Licensing Requirements and Procedures: All persons in any way
connected with the gaming operation or gaming facility are
required to be licensed or to submit to a background
investigation under IGRA. The licensing process provided for in
this Compact shall involve joint cooperation between the tribal
gaming agency and CGCC. In addition, every gaming employee
must obtain, and thereafter maintain current, a valid tribal
gaming license, as specified. Furthermore, this Compact allows
the CGCC, if it is reasonably necessary, to review materials and
information received by the tribal gaming agency in connection
with the licensing of a gaming employee.
Tribal Environmental Impact Report: The Tribe is required to
prepare a "Tribal Environmental Impact Report" (TEIR) to measure
off-reservation environmental impacts including an evaluation of
energy consumption prior to initiating the development of a
project for a facility. A completed TEIR shall be filed with
the County, the DOJ, and the State Clearinghouse.
Employee Protections: This Compact provides that, in lieu of
participating in the State's workers' compensation system, the
Tribe may create and maintain a system that provides redress for
employee work-related injuries through insurance or
self-insurance. The Tribe's system must include a specified
scope of coverage as well as a means of enforcement against the
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Tribe. The Tribe is also required to provide benefits
comparable to those mandated for comparable employees under
state law. The Tribe will participate in unemployment
compensation, and state tax withholding. No later than the
effective date of this Compact, the Tribe will advise the State
of its election to participate in the statutory workers'
compensation system or, alternatively, will forward to the State
all relevant ordinances and documents establishing its own
system.
Patron Protections (injuries and gambling): This Compact
provides that the Tribe must attempt to resolve patron disputes
filed within seven days of the play or operation of a Class III
game, including refusal to pay any alleged winnings. If a
patron is dissatisfied with the resolution, the Tribe shall
inform the patron in writing with 15 days of his or her right to
seek binding arbitration. Binding arbitration shall be settled
by a retired judge, in accordance with the streamlined
arbitration rules and procedures of Judicial Arbitration and
Mediation Services (JAMS). The Tribe agrees to wave its
sovereign immunity in order to be compelled in federal or state
court to abide by the resolution of arbitration. The Tribe has
agreed to maintain commercial general liability insurance of no
less than $10 million per occurrence for bodily injury, property
damage, and personal injury.
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 or state governmental gaming test
laboratory to ensure they are being operated according to
specified technical standards. Also, requires the tribal gaming
agency to maintain adequate records that demonstrate compliance
with software and hardware specifications. The CGCC would be
authorized 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.
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Regulations for Operation, Management and Minimum Standards. In
order to foster statewide uniformity of regulation of Class III
Gaming operations throughout the state, rules, regulations,
standards, specifications, and procedures of the tribal gaming
agency in respect to any matter encompassed in the Compact shall
be consistent with regulations adopted by the CGCC, as defined.
The Tribe must comply with CGCC-8, which mandates Minimum
Internal Control Standards (MICS) no less stringent than the
National Indian Gaming Commission MICS.
Compliance Enforcement: It is the responsibility of the tribal
gaming agency to conduct on-site gaming regulation and control
in order to enforce the terms of this Compact, IGRA, any
applicable NIGC and CGCC regulations, and the tribal gaming
ordinance with respect to gaming operation and facility
compliance, and to protect the integrity of the gaming
activities, the reputation of the Tribe and the gaming operation
for honesty and fairness, and the confidence of patrons that
tribal government gaming in California meets the highest
standards of regulation and internal controls. To meet those
responsibilities, the tribal gaming agency shall adopt and
enforce regulations, procedures, and practices. The tribal
gaming agency shall investigate any reported violation of this
Compact and shall require the gaming operation to correct the
violation upon such terms and conditions as the tribal gaming
agency determines are necessary.
Labor Provisions: This Compact recognizes the fact that the
Tribe entered into a collective bargaining agreement with a
labor organization (Hotel Employees and Restaurant Employees
Union) before the enactment of its Tribal Labor Relations
Ordinance (TLRO), which governs the organizational and
representational rights of the employees at the gaming facility.
Since the Tribe has renewed that collective bargaining
agreement, the parties agree that no change in the TLRO is
necessary to address employee rights. This Compact also
specifies the existence of such a long-standing positive
relationship between the Tribe and Unite HERE is a critical
component of the terms and conditions of this Compact.
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Intergovernmental Agreement with the County. The Compact states
that the Memorandum of Understanding made as of January 18,
2000, and as amended in July 2003, by and between the County and
the Tribe constitutes an Intergovernmental Agreement within the
meaning of Section 10.8.8 of the Compact (Intergovernmental
Agreement), and covers all projects commenced during the term of
this Compact unless the County and Tribe agree otherwise.
Alcohol Provisions: 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: 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 non-gaming area of the gaming facility, or is
employed at the Gaming Facility in a capacity other than as a
gaming employee.
Protection of the Public: The Tribe will not conduct Class III
Gaming in a manner that endangers the public health, safety, or
welfare; provided that nothing herein shall be construed to make
applicable to the Tribe any state laws or regulations governing
the use of tobacco.
Health and Safety Standards: The Tribe has agreed to adopt and
comply with State public health standards for food and beverage
handling and federal water quality and safe drinking standards
applicable to California.
Building Codes and Fire Safety: This Compact requires
facilities to meet or exceed the California Building Code and
the Public Safety Code applicable to the County. The Tribe must
submit to fire safety inspections by the state, and to rectify
deficiencies, lest be subject to court order prohibiting
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occupancy of the portion of the gaming facility with the
deficiencies.
Emergency Services Accessibility and Possession of Firearms:
The Tribe must make reasonable provisions for adequate emergency
fire, medical, and related relief and disaster services for
patrons and employees. Also, prohibits the possession of
firearms by any person in the gaming facility at all times
except for federal, state, or local law enforcement personnel,
or tribal law enforcement or security personnel, as authorized.
Effective Date: This Compact shall not be effective unless and
until all of the following have occurred: 1) The Compact is
ratified by statute in accordance with state law; and 2) Notice
of approval or constructive approval is published in the Federal
Register.
Term: Once effective, this Compact shall be in full force and
effect for State law purposes until December 31, 2041.
Amendments and Renegotiations: The terms and conditions of this
Compact may be amended at any time by the mutual and written
agreement of both parties during the term of this Compact
provided that each party voluntarily consents to such
negotiations in writing. No sooner than 18 months before the
termination of this Compact, either party may request the other
party to enter into negotiations to extend the term of this
Compact or to enter into a new Class III compact. Any
amendments to this Compact shall be deemed to supersede,
supplant and extinguish all previous understandings and
agreements on the subject.
Additional Background Information:
Rincon Decision: In 2004, the Rincon Band of Mission Indians
sued the State of California in federal court after negotiations
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for a new gambling agreement with then-Governor Schwarzenegger
fell apart. The Tribe believed the Governor was violating
federal law by insisting that tribes pay money into the state's
General Fund in exchange for more slot machines.
In July 2011, the United States Supreme Court declined to review
a Ninth Circuit Court's decision that ruled the state could not
require the Rincon Band tribe to pay a percentage of slot
machine revenue into California's General Fund for more gaming
devices. The Ninth Circuit had affirmed a lower court decision
that the new financial concessions were nothing more than a
state tax on tribal casino revenues, which is prohibited by
IGRA. The court concluded that a "non-negotiable, mandatory
payment of 10% of net win into the State treasury for
unrestricted use yields public revenue and is [therefore] a tax
and that the court was therefore required to consider the
State's demand as evidence of bad faith under IGRA's statutes."
The Rincon decision has changed the dynamics of tribal-state
compact negotiations in California.
Pauma Band of Luiseno Mission Indians Lawsuit: In 2010, the
Pauma Band of Luiseno Mission Indians ceased payments to the
State and brought suit against the State in federal court
claiming that the State acted in bad faith by misrepresenting
significant information relative to the number of gaming
machines available for licensure. Prior to its 2004 amended
compact, the Tribe was paying approximately $315,000 a year to
the state (into the SDF and RSTF) under terms of its 1999
compact. The payment rose to $7.75 million a year (initially
for securitizing the proposed transportation bond and
subsequently deposited directly into the general fund) under the
tribe's 2004 amended compact. In 2013, the court sided with
Pauma and, thus, the state no longer receives payments from the
Pauma Tribe. The State has appealed that decision.
As noted above, the 2004 Pauma compact amendments were
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negotiated at the same time as the current Tribe compact, both
of which were ratified by the same bill (AB 687). Both compacts
provided for fixed payments to the state for securitizing
transportation bonds. The Rincon decision as well as the Pauma
case, have limited some of the state's options when negotiating
and renegotiating compact agreements.
SDF: Existing law creates the 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 and authorizes the Legislature to appropriate money
from the SDF for the following purposes: 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 CGCC and the DOJ in connection with the
implementation and administration of compacts; 4) payment of
shortfalls that may occur in the Indian Gaming 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. The distribution formula "sunsets" on January
1, 2021.
RSTF: Existing law also creates in the State Treasury the RSTF
for the receipt and deposit of moneys derived from gaming device
license fees that are paid into the RSTF pursuant to the terms
of specified tribal-state gaming compacts for the purpose of
making distributions to non-compacted tribes (e.g.,
federally-recognized non-gaming and tribes that operate casinos
with fewer than 350 slot machines). Revenue in the RSTF is
available to CGCC, upon appropriation by the Legislature, for
making distributions of $1.1 million annually to non-compact
tribes. The RSTF was created as part of the 1999 compacts,
which, in conjunction with the passage of Proposition 1A (2000),
created gaming compacts with approximately 60 California tribes.
Non-compact tribes are considered third-party beneficiaries of
the 1999 compacts.
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TNGF: The TNGF was created in the Graton Rancheria compact [AB
517 (Hall), Chapter 12, Statutes of 2012], as a new destination
for gaming revenue for distribution of funds to non-gaming and
limited-gaming tribes, upon application of such tribes for
purposes related to effective self-governance, self-determined
community, and economic development. The fund is designed to be
fluid and payments are intended to be made to non-gaming tribes
on a "need" basis, upon application by non-gaming tribes. The
TNGF currently does not receive funding.
Prior legislation: AB 475 (Bigelow), Chapter 8, Statutes of
2015. Ratified the tribal-state gaming compact entered into
between the State and the Jackson Rancheria Band of Miwuk
Indians, executed on February 1, 2015.
SB 1356 (De León), Chapter 314, Statutes of 2014. Ratified the
amendment to the tribal-state gaming compact entered into
between the State and the Viejas Band of Kumeyaay Indians,
executed on August 12, 2014.
SB 1224 (Correa), Chapter 300, Statutes of 2014. Ratified the
tribal-state gaming compact entered into between the State and
the Karuk Tribe, executed on December 4, 2013.
AB 1245 (V. Manuel Pérez), Chapter 462, Statutes of 2013.
Ratified the tribal-state gaming compact entered into between
the State and the Ramona Band of Cahuilla Indians located in
Riverside County, executed on June 10, 2013.
AB 277 (Hall), Chapter 51, Statutes of 2013. Ratified two new
compacts entered into between the State and the following
tribes: North Fork Rancheria, executed on August 31, 2012, and
the Wiyot Tribe, executed on March 20, 2013.
AB 1267 (Hall), Chapter 6, Statutes of 2013. Ratified the
amended tribal-state gaming compact entered into between the
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State and the Shingle Springs Band of Miwok Indians, executed on
November 15, 2012.
SB 668 (Fuller), Chapter 67, Statutes of 2013. Ratified the
tribal-state gaming compact entered into between the State and
the Fort Independence Indian Community of Paiute Indians,
executed on February 28, 2013.
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. Repealed those
provisions ratifying the tribal-state gaming compact entered
into between the State and Pinoleville Pomo Nation, executed on
March 9, 2009, and instead ratified the tribal-state gaming
compact entered into between the State and the Pinoleville Pomo
Nation, executed on August 8, 2011. Ratification of this
revised compact authorized the Tribe to operate up to 900 slot
machines with up to 15% of the casino's net win from the slots
will go to local communities and gambling mitigation and
regulation provisions, instead of requiring revenue
contributions be made to the General Fund as provided by the
2009 compact.
AB 1020 (Chesbro), Chapter 27, Statutes of 2011. Repealed the
ratification of the tribal-state gaming compact entered into
between the State and the Habematolel Pomo of Upper Lake,
executed on September 2, 2009, and instead ratified a new
tribal-state gaming compact entered into between the State and
the Habematolel Pomo of Upper Lake, executed on March 17, 2011.
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Ratification of this revised compact authorized the Habematolel
Pomo of Upper Lake to operate up to 750 slot machines with up to
15% of the net-win from those gaming devices being paid to the
SDF and the RSTF, instead of requiring revenue contributions be
made to the General Fund as provided by the 2009 compact.
SB 89 (Budget and Fiscal Review Committee), Chapter 1, Statutes
of 2010. Ratified the tribal-state gaming compact entered into
between the State and the Habematolel Pomo of Upper Lake,
executed on September 2, 2009.
AB 122 (Coto), Chapter 3, Statutes of 2009. Ratified the
tribal-state gaming compact entered into between the State and
the Pinoleville Pomo Nation, executed on March 10, 2009.
AB 3072 (Price), Chapter 334, Statutes of 2008. Ratified the
first amendment to a tribal-state gaming compact entered into
between the State and the Shingle Springs Band of Miwok Indians,
executed on June 30, 2008.
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 38, Statutes of 2007. Ratified the
first compact amendment to the compact between the State and
Sycuan.
SB 175 (Ducheny), Chapter 39, Statutes of 2007. Ratified the
first compact amendment to the compact between the State and
Morongo.
SB 903 (Padilla), Chapter 40, Statutes of 2007. Ratified the
first compact amendment to the compact between the State and
Pechanga.
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SB 941 (Padilla), Chapter 226, Statutes of 2007. Ratified the
first compact amendment to the compact between the State and San
Manuel.
SB 957 (Torlakson), Chapter 41, Statutes of 2007. Ratified the
first compact amendment to the compact between the State and
Agua Caliente.
SB 470 (Ducheny), Chapter 527, Statutes of 2006. Ratified the
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. Also, provided for the
issuance of bonds in an amount not to exceed $1.5 billion by the
California Infrastructure and Economic Development Bank and
required 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.
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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.
Proposition 1A, adopted by the people of California on March 7,
2000. Modified the prohibition against casinos and lotteries in
the California Constitution to authorize the Governor to
negotiate compacts, subject to legislative ratification, for the
operation of slot machines, lottery games, and banking and
percentage card games by federally recognized Indian tribes on
Indian lands in California, in accordance with federal law.
Authorized slot machines, lottery games, and banking and
percentage card games to be conducted and operated on Indian
lands subject to the compacts.
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. Also, ratified 57 compacts
and created two special funds in the State Treasury (SDF and
RSTF), as specified.
SB 287 (Burton), Chapter 409, Statutes of 1998. Ratified 11
compacts negotiated between the State and Indian tribes that
permitted class III video gaming devices on tribal lands and
established a process for ratifying other compacts.
Analysis Prepared by:
Eric Johnson / G.O. / (916) 319-2531 FN:
0001663
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