BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 795|
|Office of Senate Floor Analyses | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
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THIRD READING
Bill No: AB 795
Author: Atkins (D), et al.
Amended: 9/4/15 in Senate
Vote: 27 - Urgency
PRIOR VOTES NOT RELEVANT
NOTE: On September 9, 2015, the Senate Governmental
Organization Committee held an informational hearing on
the tribal-state gaming compact entered into betwee the
State of California and the Sycuan Band of the Kumeyaay
Nation.
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
Sycuan Band of the Kumeyaay Nation (hereafter "Tribe") executed
on September 2, 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.
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Senate Floor Amendments of 9/4/15 gut the contents of the
existing bill; add a new lead author (Atkins); add an urgency
clause; and, insert provisions pertaining to ratification of the
tribal gaming compact recently executed by the Governor and the
Sycuan Band of the Kumeyaay Nation.
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)Authorizes expressly 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
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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 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 entered into between the State of
California and the Sycuan Band of the Kumeyaay Nation executed
on September 2, 2015 and supersedes the 1999 compact between the
Tribe and the State of California. The 1999 compact authorizes
the Tribe to operate no more than 2,000 gaming devices (slot
machines). Under this Compact, the Tribe may operate a maximum
of 2,500 gaming devices at its current facility in San Diego
County.
The Tribe has agreed to pay the State its pro rata share of the
costs the State incurs for the performance of its duties under
the Compact as well as four and three quarters percent (4.75%)
of its "gross gaming revenue," to be shared with tribes that are
not gaming or that otherwise are not substantially benefiting
from gaming. Additionally, the Compact provides a framework for
the sharing of gaming revenue with the County of San Diego and
other local jurisdictions. Specifically, from its payments to
the Revenue Sharing Trust Fund (RSTF) or the Tribal Nation Grant
Fund (TNGF), the Tribe may take annual credits of up to sixty
percent (60%) for infrastructure improvements and fire, law
enforcement, public transit, education, tourism and other
services including investments in renewable energy or water
conservation projects and non-gaming related economic
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development and health care facilities that provide a mutual
benefit to the Tribe and the local community.
Pursuant to the 1999 compact, the Tribe currently pays
approximately $2.4 million annually into the Special
Distribution Fund (SDF) and $2.3 million annually into the RSTF.
Under this Compact, it is estimated that the Tribe will pay
approximately $1 million annually (its pro rata share) into the
SDF and approximately $10.1 million annually into the RSTF or
the TNGF. Thus, the RSTF will see an increase of revenue
estimated to be roughly $7.8 million per year. However, this
amount may be offset by up to $6.3 million per year that the
Tribe is authorized to redirect to specified infrastructure
projects and services that mutually benefit the local community,
the Tribe and the state.
Brief History of the Sycuan Band of the Kumeyaay Nation
The Sycuan Band of the Kumeyaay Nation is a federally recognized
tribe of Mission Indians from Southern California, near El
Cajon. The Tribe consists of 220 members, approximately 160 of
whom are voting members (over 18 years old). The Tribe opened
its first gambling facility, the Sycuan Bingo Palace, on its
reservation in 1983. In 1999, the Tribe entered into a
tribal-state gaming compact with the State of California which
has provided it with extensive economic opportunities, including
a profitable casino. The Tribe has a diversified business
portfolio which includes ownership interests in a variety of
businesses both on and off of the Sycuan Reservation, including
the historic U. S. Grant Hotel in downtown San Diego, the Marina
Gateway Hotel and Conference Center in National City, an
off-reservation golf course, and significant advertising
agreements with the San Diego Padres Major-League Baseball team
at PETCO Park. The Tribe is also an investor in the Hotel
Solamar near the ballpark.
Furthermore, the Tribe funds the training and staffing of a fire
station and police station in San Diego County. With respect to
the fire station that it funds, 90% of the calls for service are
off reservation, resulting in millions of dollars spent each
year benefitting off-reservation communities. The majority of
the police station's calls are for off-reservation services, as
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well, although at a lower percentage.
Under the 1999 compact, the Tribe operates 2,000 Class III
gaming devices and 58 table games and employs 2,700 people at
its casino, golf course, hotel, and other properties. The Tribe
also offers an off-track betting parlor for its customers.
Pursuant to the 1999 compact, the Tribe currently pays $ 2.4
million into the SDF and $2.3 into the RSTF annually.
In 2006, the State and Tribe negotiated amendments to the 1999
Sycuan compact that provided for significant payments to the
State's General Fund in exchange for more gaming devices.
Governor Schwarzenegger executed the compact amendments, the
Legislature ratified the amended compact, and the U.S.
Department of the Interior published a notice in the Federal
Register that the amended compact was "deemed-approved."
However, the 2006 amended compact contained a provision
requiring ratification by the Tribe's general membership.
Subsequently, the Tribal membership voted NOT to ratify the
compact amendments and therefore, they never went into effect.
As a result, Sycuan's gaming operation continues to be governed
by the provisions of the 1999 compact.
Key Components of this Compact
Scope of Class III Gaming Authorized and Financial Terms. Under
this Compact, the Tribe may operate a maximum of 2,500 gaming
devices, banking or percentage card games, and any devices or
games that are authorized under state law to the California
State Lottery, provided that the Tribe will not offer such games
through use of the Internet unless others in the state not
affiliated with or licensed by the California State Lottery are
permitted to do so under state and federal law. 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 engage in Class III
Gaming only on eligible Indian lands held in trust for the
Tribe, located within the boundaries of the Tribe's reservation
and trust lands as those boundaries exist as of the execution
date of this Compact, as legally described in the Compact. If
the Tribe chooses to operate more than one gaming facility, then
one of the two gaming facilities shall have no more than five
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hundred (500) gaming devices and shall have a primary purpose
other than gaming authorized under IGRA.
Exclusivity. 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 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 below 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.
Payments to the SDF. The Tribe shall pay to the State on a pro
rata basis the costs the State incurs for the performance of all
its duties under this Compact, as established by the monies
appropriated in the annual Budget Act for the performance of
their duties under the Class III Gaming Compacts each fiscal
year for the California Gambling Control Commission (CGCC), the
California Department of Justice, the Office of the Governor,
the California Department of Public Health Programs, Office of
Problem Gambling, the State Controller, the Department of Human
Resources, and the Financial Information System for California,
or any agency or agencies the State designates as a successor to
them. The Tribe's pro rata share of the State's costs in any
given year this Compact is in effect shall 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
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pro rata share."
Payments to the RSTF or TNGF. If the Tribe operates more than
three hundred fifty (350) gaming devices at any time in a given
calendar year, it shall thereafter, including in that calendar
year, pay to CGCC, for deposit into the RSTF or the TNGF, four
and three quarters percent (4.75%) of its "gross gaming revenue"
from the operation of gaming devices in excess of three hundred
fifty (350).
"Gross Gaming Revenue" is defined as the win from gaming
activities, which is the difference between gaming wins and
losses before deducting costs and expenses or deducting
incentives or adjusting for changes in progressive jackpot
liability accruals. Generally, the difference between patron
wagers and the payouts made on winning wagers.
Credits Applied to RSTF or the TNGF. The State agrees to
provide the Tribe with annual credits for up to sixty percent
(60%) of the payments otherwise due to be paid into the RSTF or
TNGF for the following:
1)Payments by the Tribe to San Diego County, local
jurisdictions, and nonprofit and civic organizations operating
facilities or providing services within the County for fire,
law enforcement, emergency medical services, public transit,
education, tourism, and other services and infrastructure
improvements intended to serve off-reservation needs of County
residents - such payments shall be subject to approval by the
County or local jurisdiction in the County and at least twenty
percent (20%) of the annual credits must be utilized for the
above stated purposes;
2)Non-gaming related capital investments and economic
development projects by the Tribe on or off tribal trust lands
that the State or State designated agency agrees provides
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;
3)Investments in, and any funds paid to the State in connection
with, renewable energy projects that, in part, serve the
gaming facility, to include facilities that incorporate
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charging stations for electric or other zero-emission vehicles
that are available to patrons and employees of the gaming
facility;
4)Payments to support capital improvements and operating
expenses for facilities within California that provide health
care services to tribal members, Indians, and non-Indians;
and,
5)Investments by the Tribe for water treatment and conservation
projects.
All excess authorized credits that cannot be applied in any one
year because they would exceed the sixty percent (60%) may be
applied as an annual credit in all following years that this
Compact is in effect, in the same percentages, until completely
exhausted.
Quarterly Contribution Report. 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. The report must include: (a) calculation of
the maximum number of gaming devices operated each day, (b) the
gross gaming revenue calculation, (c) the amount due the SDF,
(d) calculation of the amount due to the RSTF/TNGF, and (e) the
total amount of the quarterly payment.
Additional Compact Elements
Gaming Ordinance and Regulations. Provides that 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 the State
Gaming Agency, and (3) the provisions of this Compact, as
specified.
Licensing Requirements and Procedures. Provides that
all persons in any way connected with the gaming operation
or gaming facility who are required to be licensed or to
submit to a background investigation under IGRA, and any
others required to be licensed under this Compact,
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including, without limitation, all gaming employees, gaming
resource suppliers, financial sources, and any other person
having a significant influence over the gaming operation,
must be licensed by the Tribal Gaming Agency and cannot
have had any determination of suitability denied or revoked
by the CGCC. Also, every gaming employee must obtain, and
thereafter maintain current, a valid tribal gaming license,
as specified.
Minimum Internal Control Standards (MICS). Requires the
Tribe to adopt and comply with standards that meet or
exceed the federal NIGC 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.
Patron Disputes. Provides that the Tribe (through its
tribal gaming agency) must attempt to resolve patron
disputes within three days of the play or operation of any
game, including refusal to pay to a patron any alleged
winnings from any gaming activities. If a patron is
dissatisfied with the resolution, the Tribe shall inform
the patron in writing with 15 days of the right to
resolution of the dispute by the Tribal Gaming Agency. If
dissatisfied with the resolution, the patron has the right
to seek resolution in either the Sycuan Tribal Court system
or before a three-member tribal claims commission
consisting of a representative of the tribal government and
at least one non-tribal commissioner. The Tribal Gaming
Agency shall conduct an appropriate investigation, provide
to the patron a copy of its procedures concerning patron
complaints, and render a decision in accordance with
industry practice. The decision shall be issued within 60
days of the patron's request. Any party dissatisfied with
the award of the Sycuan Tribal Court or tribal claims
commission may, at the party's election, appeal to the
Intertribal Court of Southern California Court of Appeals,
provided that the party making the election must bear all
costs and expenses associated with the appeal regardless of
the outcome. The Tribe agrees to wave its sovereign
immunity in connection with the jurisdiction of the Sycuan
Tribal Court, the tribal claims commission or Intertribal
Court of Southern California and in any suit in state or
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federal court to enforce or execute a judgment based upon
the award of the tribal court, claims commission or
appellate court.
Public and Workplace Liability. Requires the Tribe to
obtain and maintain a commercial general liability
insurance policy which provides coverage of no less than
$10 million. Also, requires the Tribe to adopt a Tort
Liability Ordinance stipulating that California tort law
governs claims. In addition, the Compact provides that
California tort law shall apply to specified claims if the
Tribe fails to adopt a Tort Liability Ordinance.
Environmental Protections. Requires the Tribe to
prepare a Tribal Environmental Impact Report (TEIR) and
negotiate mitigation of any off-reservation impacts prior
to initiating the development of a project for a facility.
The Compact provides procedures regarding the (1) Notice of
Preparation of Draft TEIR, (2) Notice of Completion of
Draft TEIR, and (3) Issuance of Final TEIR. 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. A completed TEIR must be filed with San
Diego County, the Department of Justice, the State
Clearinghouse and the State Gaming Agency. Also, projects
that have been initiated under the terms of the 1999
compact shall be subject to the relevant terms and
conditions of the 1999 compact. Additionally, projects
commenced prior to the existing mitigation agreements
(January of 2012) between the Tribe and San Diego County
regarding development of the Tribe's other properties
remain in effect and are not subject to the TEIR provisions
of this Compact. If those agreements expire and are not
renegotiated (or negotiations fail), then the TEIR
provisions of the Compact become applicable to those
properties, as well.
Labor Provisions. 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 C
of the Compact, and the gaming activities may only continue
as long as the Tribe maintains the ordinance. If the Tribe
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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. The new TLRO
proscribed by this Compact is modeled after the Tribe's
1999 TLRO with several modifications. The new TLRO
provides for union neutrality. The Tribe will not oppose a
union organization but can advocate the benefits of working
for the Tribe. A labor union must issue a Notice of Intent
or Organize (NOIO). For a period of 365 days following
delivery of a NOIO, the union shall not engage in strikes,
picketing, boycotts, attack websites, or other economic
activity at or in relation to the tribal casino or related
facility. During the 365 days after the Tribe received the
NOIO, the union must collect dated and signed authorization
cards and complete the secret ballot election. Failure to
complete the secret ballot election within 365 days shall
preclude the union from delivering another NOIO for a
period of two years (730 days). After the certification
that 30% of the employees have expressed an interest in the
union, a notice of election shall be issued and the
election shall be concluded within 30 calendar days
thereafter. Secret ballot elections shall be held at the
workplace and at least one neutral location. Employees may
mail in ballots provided they are received by election day.
Mediation for any collective bargaining agreement impasse
shall be made in conjunction with the Federal Mediation and
Conciliation Service (FMCS). The mediation process is
modeled on the Agricultural Labor Relations Act and
authorizes the mediator to resolve the impasse. According
to the Administration, the appeals procedures have been
streamlined significantly in comparison to the Tribe's 1999
TLRO. Disputes are presented to an arbitrator with
expertise in labor law and appropriate challenges to the
arbitrator's decision may be presented to a state superior
court.
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. Provides that
slot machines will have to be tested, approved and
certified by an independent gaming test laboratory or state
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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 State Gaming Agency 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.
Prohibitions Regarding Minors. Provides that the Tribe
shall prohibit persons under the age of eighteen (18) 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.
Health and Safety Standards. Provides that the Tribe
has agreed to adopt and comply with tribal health standards
for food and beverage handling that are no less stringent
than State public health standards. Also, the Tribe has
agreed to comply with federal water quality and safe
drinking water standards applicable in California.
Problem Gambling. Requires the gaming operation to
establish a program, approved by the Tribal Gaming Agency,
to mitigate pathological and problem gaming by implementing
specified measures.
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).
Tobacco Provisions. Provides that the Tribe agrees to
provide a non-smoking area in the gaming facility and to
utilize a ventilation system throughout the gaming facility
that exhausts tobacco smoke to the extent reasonably
feasible under state-of-the-art technology existing as of
the date of the construction or significant renovation of
the gaming facility, and further agrees not to offer or
sell tobacco to anyone under 18 years of age.
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Emergency Services Accessibility and Possession of
Firearms. Provides that 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.
Workers' Compensation. Provides that the Tribe agrees
to participate in the state's workers' compensation program
with respect to employees at the casino. All disputes
arising from the workers' compensation laws shall be heard
by the State Workers' Compensation Appeals Board pursuant
to the California Labor Code. The Tribe acknowledges the
jurisdiction of the Board in such manners. Furthermore,
the Tribe agrees that it will participate in the state's
unemployment compensation program for providing benefits
and unemployment compensation disability benefits to
employees at the casino. The Tribe shall withhold all
taxes due to the state, except for Tribal members living on
the Tribe's reservation, and forward such amounts to the
state.
Effective Date. Provides that this Compact shall not be
effective unless and until all of the following have
occurred: (a) the Compact is ratified by statute in
accordance with state law and (b) notice of approval or
constructive approval is published in the Federal Register.
Once effective, this Compact shall be in full force and
effect until December 31, 2040.
Amendment by Agreement. Provides that 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. Any amendments
to this Compact shall be deemed to supersede, supplant and
extinguish all previous understandings and agreements on
the subject.
Additional Relevant Background Information
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Indian Gaming Regulatory Act (IGRA)
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."
IGRA distinguishes between three classes of gaming (Class I,
Class II, and Class III) and provides for different forms of
regulation for each class. Class I gaming includes "social
games" for minor prizes or "traditional forms of Indian gaming."
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. 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.
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.
Before 2000, The California Constitution prohibited Class III
gaming. In 2000, California voters approved Proposition 1A
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which had been proposed by the Governor and passed by the
Legislature. Proposition 1A amended the California Constitution
to permit the State to negotiate compacts with federally
recognized Indian tribes for certain Class III gaming
activities. Because non-Indian parties were still forbidden
from operating gaming facilities, Proposition 1A granted Indian
tribes a "constitutionally protected monopoly on most types of
Class III games in California."
Rincon Decision
The U.S. Supreme Court in July 2011 refused to consider the
decision of the Ninth Circuit Court rejecting a Class III
Tribal-State Gaming Compact negotiated by Governor
Schwarzenegger with the Rincon Band of Luiseno Mission Indians.
The issue of this case's impact on Indian gaming throughout the
country has been a topic of great debate.
As noted, IGRA authorizes states to receive compensation for
costs related to tribal gaming such as regulation and gaming
addiction, and to offset the effects of casinos on surrounding
communities. However, states are prohibited from assessing
taxes on tribal casino revenues, so unjustified payments to a
state's General Fund are no longer permissible unless the tribes
are getting something in return for the required payments, such
as those authorized by IGRA.
Another vehicle for state receipt of casino payments above those
payments must be in exchange for some benefit deemed "exclusive"
to the tribe. To this end, it is fact that a number of other
state (Governors) have attempted to create "exclusive grants" in
favor of compact signatory tribes in return for payments to the
state treasuries.
Rincon challenged the legality of California's "second
generation" compacts pursuant to which the signatory tribes
would be entitled to increase their slot machine count in return
for paying percentages of the new slot machine revenue to the
state's General Fund. 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
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prohibited by IGRA.
Rincon had refused to sign the amended compact which already had
been executed by several other tribes choosing instead to demand
that it be given the expanded gaming opportunity without making
the new financial concessions. The Ninth Circuit 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 court noted that "the State could rebut the presumption of
bad faith by demonstrating that the revenue demanded was to be
used for the public interest, public safety, criminality,
financial integrity, and adverse economic impacts on existing
activities, but the State's need for general tax revenue was
insufficient to demonstrate good faith."
Prior/Related Legislation
AB 1540 (Gray, 2015) ratifies the tribal-state gaming compact
entered into between the State of California and the Santa Ynez
Band of Chumash Indians, executed on August 26, 2015. (Enrolled
and presented to the Governor on 9/3/2015)
AB 315 (Bigelow, 2015) ratifies the amended and restated
tribal-state gaming compact entered into between the State of
California and the United Auburn Indian Community, executed on
August 14, 2015. (Enrolled and presented to the Governor on
9/3/2015)
AB 475 (Bigelow, Chapter 8, Statutes of 2015) ratified the
tribal-state gaming compact entered into between the State of
California and Jackson Rancheria Band of Miwuk Indians, executed
on February 1, 2015.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: No
SUPPORT: (Verified9/8/15)
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Agua Caliente Band of Chauilla Indians
Asian Business Association of San Diego
Barona Band of Mission Indians
Barrio Station
Congressman Juan Vargas
Downtown San Diego Partnership
La Mesa Chamber of Commerce
Mental Health America of San Diego County
Ronald McDonald House Charities of San Diego
San Diego City Councilman Scott Sherman
San Diego County Building and Construction Trades Council,
AFL-CIO
San Diego Police Officers Association
San Diego Regional Chamber of Commerce
San Diego Rescue Mission
San Diego Tourism Authority
San Ysidro Chamber of Commerce
Santa Ynez Band of Chumash Indians
State Building and Construction Trades Council, AFL-CIO
Sycuan Band of the Kumeyaay Nation
Urban Corps of San Diego County
OPPOSITION: (Verified9/8/15)
None received
Prepared by:Arthur Terzakis / G.O. / (916) 651-1530
9/8/15 16:58:25
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