BILL ANALYSIS Ó
AB 795
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB
795 (Atkins)
As Amended September 4, 2015
2/3 vote. Urgency
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|ASSEMBLY: | |(June 1, 2015) |SENATE: |40-0 |(September 9, |
| | | | | |2015) |
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(vote not relevant)
Original Committee Reference: L. & E.
SUMMARY: Ratifies the tribal-state gaming compact (Compact)
entered into between the State of California (State) and the
Sycuan Band of the Kumeyaay Nation (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.
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 and the Tribe, executed on September 2, 2015, is hereby
ratified.
2)Authorize the Tribe to operate a maximum of 2,500 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.
3)Supersede a 1999 compact between the Tribe and the State.
4)State once effective, this Compact shall be in full force and
effect for State law purposes for 25 years following the
effective date.
5)Provide that, in deference to tribal sovereignty, certain
actions may not be deemed projects for purposes of the CEQA.
6)Contain an urgency clause, allowing the provisions of this
bill to take effect immediately upon enactment.
AS PASSED BY THE ASSEMBLY, this bill required the Department of
Industrial Relations (DIR) to submit a report to the Legislature
the amount of time it takes for wage claims to receive a
preliminary hearing date.
FISCAL EFFECT: Pursuant to the 1999 compact, the Tribe
currently pays $2.4 million annually into the Special
Distribution Fund (SDF) and $2.3 million annually into the
Revenue Sharing Trust Fund (RSTF). Under this Compact, it is
estimated that the Tribe will pay approximately $1 million
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annually (its pro rata share) into the SDF and approximately
$10.1 million annually into the RSTF or the Tribal Nation Grant
Fund (TNGF). Thus, the 60% credit referenced above will equate
to approximately $6.3 million per year. Therefore, the net
annual increase to the RSTF, assuming the Tribe maximizes its
offsets, would be approximately $1.5 million annually.
COMMENTS: On September 9, 2015, the Assembly Governmental
Organization Committee held an informational hearing on this
tribal-state gaming compact between the State and the Tribe.
Purpose of this bill: This bill ratifies the Compact entered
into between the State and the Tribe executed on September 2,
2015 and supersedes the 1999 compact between the Tribe and the
State.
The Compact authorizes the Tribe to operate a maximum of 2,500
gaming devices (slot machines) at not 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.
If the Tribe chooses to operate more than one gaming facility,
then one of the two gaming facilities shall have no more than
500 gaming devices and shall have a primary purpose other than
gaming authorized under the Indian Gaming Regulatory Act (IGRA).
Under the 1999 compact, the Tribe could not operate more than
2,000 gaming devices.
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 4.75% of its "Gross Gaming Revenue" from
the operation of gaming devices in excess of 350, to be shared
with non-gaming and limited gaming tribes so that the economic
benefits of gaming reach tribal governments that have chosen to
not operate a casino.
The Compact provides a framework for the sharing of gaming
revenue with San Diego County, local jurisdictions, and other
stated purposes. Specifically, the Tribe may take annual
credits of up to 60% (of the 4.75% of its Gross Gaming Revenue)
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for infrastructure improvements, fire prevention, law
enforcement, public transit, education, tourism and other
services including investments in renewable energy or water
conservation projects and non-gaming related economic
development and health care facilities that provide a mutual
benefit to the Tribe and the local community.
It should be noted that recent federal court decisions, such as
the Rincon decision (see below), have severely limited the
ability of the State to collect revenues for general purposes
from gaming tribes. As a result, many of the gaming tribes that
had executed compacts with Governor Schwarzenegger which
provided direct contributions of gaming revenue to the State's
General Fund, have sought to renegotiate or amend those deals in
a way that is consistent with this federal court decision.
According to the Governor's office, the terms of the new Compact
are consistent with provisions of more recent compacts related
to licensing, compliance enforcement and mitigation of
off-reservation gaming impacts but have been updated to reflect,
among other things, the evolving nature of financial markets, as
well as the professionalism of the Tribe's regulators and their
constructive relationship with state gaming regulators.
The Governor's Office contends that the terms of the Compact
reflect a continued commitment by the Tribe to revenue sharing
with non-gaming and limited gaming tribes through the RSTF and
TNGF, so that the economic benefits of gaming reach tribal
governments that have not chosen to operate a tribal casino.
Once effective (legislative ratification and federal approval
required), this Compact shall be in full force and effect until
December 31, 2040.
Brief History and Background:
The Sycuan Band of the Kumeyaay Nation is a federally recognized
tribe of Mission Indians from Southern California, near El Cajon
in San Diego County. There are 220 members of the Tribe,
approximately 160 of whom are voting members (over 18 years
old). A democratically elected, seven-member tribal council
governs the Tribe. Members of the Sycuan Tribal Council
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determine and administer laws, conditions and regulations for
the benefit of the Tribe.
The Tribe opened its first gambling facility, the Sycuan Bingo
Palace, on its reservation in 1983. In 1999, the Tribe and the
State entered into a gaming compact, which enabled the Tribe,
through revenues generated by its gaming operation, to improve
the governance, environment, education, health, safety, and
general welfare of its citizens; and to promote a strong tribal
government, self-sufficiency, and to provide essential
government services to its citizens.
The Tribe operates one of the more successful tribal casinos in
California. Under the current 1999 compact, the Tribe operates
2,000 Class III gaming devices and 58 table games (Blackjack,
Pai Gow, Sycuan-style craps, Poker). The Tribe also has
off-track betting parlor for wagering on horse racing. The
Sycuan Casino offers five different restaurants and a wide
variety of top quality musical and theatrical entertainment.
The Tribe's casino has become a premiere entertainment
destination in San Diego County.
The Tribe has a diversified business portfolio, including the
Sycuan Resort, which has a hotel, golf course and lighted tennis
facility. The Tribe owns the downtown San Diego landmark US
GRANT Hotel and the Marina Gateway Hotel and Conference Center
in National City. The Tribe has an extensive marketing and
advertising agreement with the San Diego Padres Major-League
Baseball team at PETCO Park, the team's home field. The Tribe
is also an investor in the Hotel Solamar near the ballpark. The
Tribe owns the UP Smoke Shop that is located on its reservation.
The Tribe has two wastewater treatment plants and "a sequential
batch reactor" used for their casino, administrative buildings,
and maintenance buildings. They also own and operate a modular
treatment plant and a water treatment facility that controls
their nitrate levels. In addition, the Tribe operates a small
medical clinic, dental office, a fire department and a tribal
police force.
The Tribe employs 2,700 people at its casino, golf course,
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hotel, and other properties.
In 2006, the State and Tribe negotiated amendments to the
Tribe's 1999 compact that provided for significant payments to
the State's General Fund. Governor Schwarzenegger executed the
compact amendments and the Legislature ratified them. However,
the 2006 compact amendments contained a provision requiring
ratification by the Tribe's General Council. Subsequently, the
Council voted against ratifying the compact amendments
therefore, the agreement was invalid. As a result, the Tribe's
gaming operation continues to be governed by the provisions of
the 1999 compact.
The Tribe states, "We are committed to improving the
environment, education status, and the health, safety and
general welfare of our members and the surrounding community."
The Tribe further declares, "The future of our Tribe's social
and economic advancement depends on promoting education of
Sycuan's future leaders. Education is important for the
revitalization, retention, and maintenance of traditional
knowledge that was passed on to our Tribe through ancestors."
Scope of Gaming Authorized and Financial Terms:
Scope of Class III Gaming Authorized: The Tribe is authorized
to operate up to 2,500 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 located within the boundaries of the Tribe's reservation
as those boundaries exist as of the execution date of this
Compact, as legally described, and on which Class III Gaming may
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lawfully be conducted under IGRA. If the Tribe chooses to
operate more than one gaming facility, then one of the two
gaming facilities shall have no more than 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 lost and other non-Indian
entities 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 Class III gaming authorized
by this Compact; or continue under this Compact, as defined.
Special Distribution Fund: The Tribe shall pay to the State on
a pro rata basis for costs the State incurs for the performance
of all its duties under this Compact as determined by the monies
appropriated in the annual Budget Act for the performance of
their duties under Class III Gaming compacts each fiscal year
for the California Gambling Control Commission (CGCC), the
California Department of Justice, the Office of the Governor and
the California Department of Alcohol and Drug Programs, Office
of Problem Gambling, or any agency or agencies the State
designates as a successor to them. The Tribe estimates it will
pay approximately $1 million annually into the SDF under the
defined formula.
Payments to the Revenue Sharing Trust Fund or Tribal Nation
Grant Fund: If the Tribe operates more than 350 gaming devices
at any time in a given calendar year, it shall thereafter,
including that calendar year, pay to the CGCC, for deposit into
the RSTF or the TNGF, 4.75% of its "Gross Gaming Revenue" from
the operation of gaming devices in excess of 350. "Gross Gaming
Revenue" is defined to mean means 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. The Tribe
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estimates that the total RSTF/TNGF annual contribution will be
approximately $10.1 million per year.
Credits Applied to RSTF or the TNGF Payments: The State agrees
to provide the Tribe with annual credits for up to 60% of the
payments otherwise due to the RSTF or TNGF for the following:
1) The costs of services provided by the Tribe or payments made
to the County, local jurisdictions, and non-profit and civic
organizations operating facilities or providing services within
the County for fire, emergency medical services, law
enforcement, public transit, education, tourism, and other
services and infrastructure improvements that in part serve
off-reservation needs of County residents. Such payments shall
be subject to approval by the State or State designated agency.
At least 20% of the annual credits shall be utilized for this
purpose; 2) Non-gaming economic development investments that
benefit the State and the Tribe because of their cultural,
social, or environmental value or diversify the sources of
revenue for the Tribe's general fund; 3) Investments by the
Tribe and any funds paid to the State for renewable energy
projects, as defined; 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.
It is estimated that the 60% credit will equate up to
approximately $6.3 million per year. The current contribution
by the Tribe to the RSTF under the 1999 compact is $2.3 million.
It is estimated that, even considering the 60% credit the Tribe
receives back for off-reservation infrastructure projects, the
net amount it will pay under this Compact to the RSTF/TNGF is
approximately $4.1 million per year, or nearly double what it is
currently paying under the 1999 compact.
All excess authorized credits that cannot be applied in any one
year because they would exceed the 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.
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Cost Reimbursement and Mitigation to Local Governments: Before
the commencement of a project, and no later than the issuance of
the Final Tribal Environmental Impact Report (TEIR) to the
County, the Tribe shall offer to commence
government-to-government negotiations with the County, and upon
the County's acceptance of the Tribe's offer, shall negotiate
with the County on a government-to-government basis and shall
enter into enforceable written agreements with the County with
respect to: 1) Timely mitigation of any significant effect on
the off-reservation environment, as defined; 2) Compensation for
law enforcement, fire protection, emergency medical services and
any other public services to be provided by the County to the
Tribe for the purposes of the Tribe's gaming operation as a
consequence of the project; 3) Reasonable compensation for
programs designed to address gambling addiction; and 4)
Mitigation of any effect on public safety attributable to the
project, including any compensation to the County as a
consequence thereof.
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: 1) calculation of
the maximum number of gaming devices operated each day, 2) the
Gross Gaming Revenue calculation reflecting the quarterly gross
gaming revenue from the operation of all gaming devices in the
facility, 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.
Amendment by Agreement: 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 as
defined, 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.
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Additional Compact Components:
1)Gaming Ordinance and Regulations - all gaming activities
conducted under this Compact shall, at a minimum, comply a)
with a gaming ordinance duly adopted by the Tribe and approved
in accordance with IGRA, b) with all rules, regulations,
procedures, specifications, and standards duly adopted by the
National Indian Gaming Commission (NIGC), the Tribal Gaming
Agency, and the CGCC, and c) with the provisions of this
Compact.
2)Tribal Ownership, Management, and Control of Gaming Operation
- the gaming operation authorized under this Compact shall be
owned solely by the Tribe.
3)Licensing Requirements and Procedures - 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, 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 CGCC. Every gaming employee
shall obtain, and thereafter maintain current, a valid tribal
gaming license, as provided. The parties intend that the
licensing process provided for in this Compact shall involve
cooperation between the Tribal Gaming Agency and CGCC, as
described.
4)Environmental Protections - the Tribe is required to prepare a
TEIR to measure off-reservation environmental impacts
including an evaluation of energy consumption prior to
initiating the development of a project for a facility. The
Compact provides procedures regarding the following: a) Notice
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of Preparation of Draft TEIR; b) Notice of Completion of Draft
TEIR; and c) Issuance of Final TEIR. A completed TEIR shall
be filed with San Diego County, the Department of Justice, and
the State Clearinghouse. Projects that have commenced prior
to the effective date of this Compact, including the hotel
expansion project, will be subject to the relevant terms and
conditions of the Tribe's 1999 Compact then in effect. The
Compact provides that existing mitigation agreements between
the Tribe and San Diego County regarding development at 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.
5)Employee Protections - the Tribe agrees that it will
participate in the State's workers' compensation program with
respect to employees employed at the gaming facility.
Disputes arising from the workers' compensation laws shall be
heard by the Workers' Compensation Appeals Board pursuant to
the California Labor Code and hereby consents to the
jurisdiction of the State Workers' Compensation Appeals Board
and the courts of the State of California for purposes of
enforcement. Furthermore, the Tribe agrees that it will
participate in the State's program for providing unemployment
compensation benefits and unemployment compensation disability
benefits with respect to employees employed at the casino,
which participation shall include compliance with the
provisions of the California Unemployment Insurance Code, and
the Tribe consents to the jurisdiction of the State agencies
charged with the enforcement of that Code and of the courts of
the State of California for purposes of enforcement.
6)Participation in State Statutory Programs Related to
Employment - as a matter of comity, with respect to persons,
including nonresidents of California, employed at the gaming
operation or gaming facility, the Tribe shall withhold all
taxes due to the State as provided in the California
Unemployment Insurance Code except for tribal members and
shall forward such amounts to the State. The Tribe shall file
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with the Franchise Tax Board a copy of any information return
filed with the Secretary of the Treasury, as
provided in the California Revenue and Taxation Code and the
regulations, except those pertaining to tribal members living
on the Tribe's reservation.
7)Cooperation with Tribal Gaming Agency - the CGCC shall meet
periodically with the Tribal Gaming Agency and cooperate in
all matters relating to the enforcement of the provisions of
this Compact and its Appendices.
8)Audit and Compact Compliance Review - in addition to providing
for an annual independent audit, the Compact allows the state
to conduct its own annual audit and compact compliance review.
The Tribe shall provide to the CGCC, within 20 days of their
submission to the NIGC, copies of the audited financial
statements of Class III Gaming and management letter(s), if
any, provided to the NIGC.
9)Regulations for Operation, Management and Minimum Standards -
the Tribe shall conduct its g aming activities pursuant to an
internal control system that implements minimum internal
control standards for Class III Gaming that are no less
stringent than those contained in the MICS of the NIGC (25
Code of Federal Regulations Section 542), as specified. This
requirement is met through compliance with the provisions, as
defined, or in the alternative by compliance with the
statewide uniform regulation CGCC-8, as it exists currently
and as it may hereafter be amended.
10)Inspection and Testing of Slot Machines - slot machines shall
be tested, approved and certified by an independent gaming
test laboratory or state governmental gaming test laboratory
to ensure that 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 shall 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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The Tribal Gaming Agency shall prepare and maintain records of
its compliance while any gaming device is on the gaming floor
and for a period of one year after the gaming device is
removed from the gaming floor, and shall make those records
available for inspection by CGCC upon request.
11)Patron Disputes - the Tribe must attempt to resolve patron
disputes filed within three 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 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 either in the Sycuan Tribal Court 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 (STC) or the tribal claims commission may, at the
party's election, appeal the award 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 STC, the tribal claims commission or
Intertribal Court of Southern California and in any suit in
state or federal court to enforce or execute a judgment based
upon the award of the tribal court, claims commission, or
appellate court.
12)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 employs
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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. 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.
13)Prohibitions Regarding Minors - the Tribe shall prohibit
persons under the age of 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.
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14)Program to Mitigate Problem Gambling - the gaming operation
shall establish a program, approved by the Tribal Gaming
Agency, to mitigate pathological and problem gambling.
15)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.
16)Tobacco - 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.
17)Possession of Firearms - the possession of firearms by any
person in the gaming facility is prohibited at all times,
except for federal, state, or local law enforcement personnel,
or tribal law enforcement or security personnel authorized by
tribal law and federal or state law to possess firearms at the
gaming facility.
18)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.
19)Building Codes and Fire Safety - in order to assure the
protection of the health and safety of all gaming facility
patrons, guests, and employees, the Tribe shall adopt, or has
already adopted, and shall maintain throughout the term of
this Compact, an ordinance that requires any covered gaming
facility construction to meet or exceed the applicable codes
(California Building Code and the California Public Safety
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Code). The Tribe shall also take all necessary steps to
reasonably ensure the ongoing availability of sufficient and
qualified fire suppression services to the gaming facility,
and to reasonably ensure that the gaming facility satisfies
all requirements of titles 19 and 24 of the California Code of
Regulations applicable to similar facilities in the County, as
defined.
20)Emergency Services Accessibility - the Tribe shall make
reasonable provisions for adequate emergency fire, medical,
and related relief and disaster services for patrons and
employees of the gaming facility.
21)Effective Date - the 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.
22)Term - once effective, this Compact shall be in full force
and effect until December 31, 2040.
Additional Background Information:
Rincon Decision: In 2004, the Rincon Band of Mission Indians
sued the State in federal court after negotiations 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
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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 sued 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
negotiated at the same time as the current Tribe compact, both
of which were ratified by the same bill (AB 687 (Núñez), Chapter
91, Statutes of 2004). 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
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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.
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.
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Related legislation: AB 1540 (Gray) of the current legislative
session. Ratifies the tribal-state gaming compact entered into
between the State and the Santa Ynez Band of Mission Indians,
executed on August 26, 2015.
AB 315 (Bigelow) of the current legislative session. Ratifies
the amended and restated tribal-state gaming compact entered
into between the State and the United Auburn Indian Community,
executed on August 14, 2015.
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
amended and restated tribal-state gaming compact 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 277 (Hall), Chapter 51, Statutes of 2013. Ratified
tribal-state gaming compacts entered into between the State and
the North Fork Rancheria Band of Mono Indians of California,
executed on August 31, 2012, and the State of California and the
Wiyot Tribe, executed on March 20, 2013.
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, executed on
June 10, 2013.
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AB 1267 (Hall), Chapter 6, Statutes of 2013. Ratified the
amended tribal-state gaming compact entered into between the
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 Tribe, executed
on August 8, 2011.
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 Tribe, executed on March 17, 2011.
SB 89 (Budget and Fiscal Review Committee), Chapter 1, Statutes
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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 of California and the Yurok Tribe of
the Yurok Reservation.
SB 174 (Ducheny), Chapter 39, Statutes of 2007. Ratified the
first compact amendment to the compact between the State of
California and Sycuan.
SB 175 (Ducheny), Chapter 38, Statutes of 2007. Ratified the
first compact amendment to the compact between the State of
California and Morongo.
SB 903 (Padilla), Chapter 40, Statutes of 2007. Ratified the
first compact amendment to the compact between the State of
California and Pechanga.
SB 941 (Padilla), Chapter 226, Statutes of 2007. Ratified the
first compact amendment to the compact between the State of
California and San Manuel.
SB 957 (Torlakson), Chapter 41, Statutes of 2007. Ratified the
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Page 22
first compact amendment to the compact between the State of
California 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 (Quechan).
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 (Nuñez), 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.
SB 930 (Burton), Chapter 802, Statutes of 2003. Ratified a
compact between the State of California and the Torres-Martinez
Desert Cahuilla Indians.
SB 411 (Ducheny), Chapter 790, Statutes of 2003. Ratified
compacts between the State of California and the La Posta Band
of Diegueno Mission Indians and the Santa Ysabel Band of
Diegueno Mission Indians in San Diego County.
AB 1385 (Battin), Chapter 874, Statutes of 1999. Designated the
Governor as the state officer responsible for negotiating and
executing compacts between the state and federally recognized
Indian tribes located in the state. Also, ratified 57 compacts
and created two special funds in the State Treasury (SDF and
RSTF), as specified.
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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:
0002337