BILL ANALYSIS                                                                                                                                                                                                    Ó






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                                   THIRD READING 


          Bill No:  AB 1282
          Author:   Gray (D) 
          Amended:  8/8/16 in Senate
          Vote:     27 - Urgency

           PRIOR VOTES NOT RELEVANT

           NOTE:  On August 9, 2016, the Senate Committee on Governmental  
                 Organization held an informational hearing on the tribal  
                 gaming compact entered into between the State of  
                 California and the Buena Vista Rancheria of Me-Wuk  
                 Indians

           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  
          Buena Vista Rancheria of Me-Wuk Indians (hereafter "Tribe")  
          executed on June 28, 2016.  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.


          ANALYSIS:  









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          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  
            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  







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            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 Buena Vista Rancheria of Me-Wuk Indians  
          executed on June 28, 2016, and supersedes the 2004 amended  
          compact between the Tribe and the State of California.  


          The Tribe's 2004 amended compact authorizes the Tribe to operate  
          an unlimited number of gaming devices (slot machines) and  
          provides that the State will receive 15% of the net win on those  
          devices up to $200 million and 25% of the net win over $200  
          million.  The 2004 amended compact also grants the Tribe  
          exclusivity against Class III gaming from non-tribal interests  
          within a 63-mile radius of its gaming facility; provides for  
          revenue sharing contributions to non-gaming tribes through the  
          Revenue Sharing Trust Fund (RSTF) for every slot machine that  
          the Tribe operates over 350 devices; and, requires the Tribe to  
          reach agreements with Amador County to mitigate environmental  
          impacts and pay for public services.   

          Under terms of this Compact, the Tribe is authorized to operate  
          2,000 gaming devices within the boundaries of the Tribe's  
          Reservation (Appendix A) in the County of Amador.  The Tribe has  
          agreed to pay the State its pro rata share of costs the State  
          incurs for the performance of its duties under this Compact as  
          well as six percent (6%) of its "net win," to be shared with  
          tribes that are not gaming or that otherwise are not  
          substantially benefiting from gaming.  


          Additionally, this Compact provides a framework for the sharing  
          of gaming revenue with the County of Amador and other local  
          jurisdictions.  Specifically, from its payments to the RSTF or  
          the TNGF, the Tribe may take annual credits of up to sixty  
          percent (60%) for infrastructure improvements that in part  
          benefit county residents, fire, law enforcement, public transit,  







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          education, tourism, and other services including investments in  
          renewable energy projects, water treatment or conservation  
          projects and payments to support capital improvements and  
          operating expenses for facilities within California that provide  
          health care services to tribal members and other members of the  
          local community. 


          Furthermore, this Compact: (1) provides a regulatory framework  
          that respects the role of the tribal gaming agency as the  
          primary regulator while also ensuring that state gaming  
          regulators fulfill their responsibilities; (2) requires the  
          Tribe to conduct its gaming activities pursuant to an internal  
          control system that implements minimum internal controls that  
          are no less stringent than those in federal regulations; (3)  
          requires the Tribe to adopt a Tribal Labor Relations Ordinance,  
          as specified; and, (4) contains provisions to protect the health  
          and safety of patrons, guests, and employees.   


          Key Components Of The Compact


             Scope of Class III Gaming Authorized.   The Tribe is  
             authorized to operate up to 2,000 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, 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 one (1) gaming facility 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 (Appendix A).  









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             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 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 Special Distribution Fund (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 (DOJ), the Office of Problem Gambling,  
             the State Controller, and any other agency or agencies  
             responsible for implementation and administration of Class  
             III gaming compacts.  The Tribe's pro rata share of the  
             State's costs in any given year this Compact is in effect may  
             not be increased more than 5% per year and 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 State fiscal year, multiplied by the Appropriation,  
             equals the Tribe's pro rata share." 









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             Payments to the Revenue Sharing Trust Fund (RSTF) or the  
             Tribal Nation Grant Fund (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 the CGCC, for deposit into the RSTF or  
             the TNGF, six percent (6%) of its "net win" from the  
             operation of gaming devices in excess of three hundred fifty  
             (350).


              "Net Win" is defined as the drop from gaming devices, plus  
              the redemption value of expired tickets, less fills, less  
              payouts, less that portion of the gaming operation's  
              payments to a third-party wide-area progressive jackpot  
              system provider that is contributed only to the progressive  
              jackpot amount. 


             Credits Applied to the 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 to the County of Amador and local  
                jurisdictions operating facilities or providing services  
                within the County for improved fire, law enforcement,  
                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. Specified annual payments by the Tribe  
                made pursuant to an agreement between the County and the  
                Tribe and approved by arbitration on June 11, 2008 and  
                currently in effect are also eligible credits and will be  
                deemed to have the approval of the County until  
                termination of that agreement or its replacement with an  
                amended or new intergovernmental agreement; 


              2)    Non-gaming related capital investments and economic  
                development projects by the Tribe on tribal trust lands  







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                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;


              3)    Investments in, and any funds paid to the State for  
                water treatment or conservation projects that, in part,  
                serve the gaming facility or any improvements  
                incorporating water conservation or treatment technology  
                on real property owned by the Tribe, or its members and  
                lineal descendants;


              4)    Investments in, and any funds paid to the State in  
                renewable energy projects that, in part, serve the gaming  
                facility, and in projects that incorporate charging  
                stations for electric or other zero emission vehicles that  
                are available to patrons and employees of the gaming  
                facility;  


              5)    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, 


              6)    Payments for providing general welfare benefits for,  
                among other things, educational, healthcare, cultural, or  
                vocational purposes, to non-enrolled members of the Tribe  
                and other Native Americans in the community.


            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 by the chief financial officer of the gaming  







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            operation. The report must include: (a) calculation of the  
            maximum number of gaming devices operated each day, (b) the  
            net win 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 paid to the State.


          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, 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 conduct its gaming activities pursuant to an internal  
            control system that implements MICS that are no less stringent  
            than those contained in the MICS of  the federal NIGC  
            standards, as specified. It requires gaming to operate  
            pursuant to a written internal control system that reasonably  
            assures that assets are safeguarded and accountability over  
            assets is maintained; liabilities are properly recorded and  
            contingent liabilities are properly disclosed; financial  
            records are accurate and reliable; transactions are performed  







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            in accordance with the Tribal Gaming Agency's authorization;  
            access to assets is permitted only in accordance with the  
            Tribal Gaming Agency's approved procedures; recorded  
            accountability for assets is compared with actual assets; and,  
            functions, duties and responsibilities are appropriately  
            segregated and performed by qualified personnel.  The Tribe is  
            required to provide the CGCC, upon written request, a copy of  
            the independent certified public accountant agreed-upon  
            procedures report conducted annually for submission to the  
            NIGC pursuant to federal law.  This report verifies that the  
            gaming operation is in compliance with the NIGC's MICS. 


           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  
            within 15 days of the right to resolution of the dispute by  
            the Tribal Gaming Agency.  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.  If dissatisfied with the resolution, the patron has  
            the right to seek resolution either in the Tribe's tribal  
            court system, once a tribal court system is established, or  
            through binding arbitration of the dispute before a retired  
            judge.  Any party dissatisfied with the award of the tribal  
            court or JAMS arbitrator may, at the party's election, invoke  
            the JAMS Optional Arbitration Appeal Procedure.  The cost and  
            expense of arbitration shall initially be borne equally by the  
            Tribe and the patron but the JAMS arbitrator shall award to  
            the prevailing party its costs and expenses (but no attorney  
            fees).  The Tribe agrees to wave its sovereign immunity in  
            connection with the jurisdiction of the tribal court system or  
            JAMS Streamlined Arbitration and JAMS Optional Arbitration  
            Appeal Procedure and in any action to enforce their judgments  
            or the obligations provided in this section. 


           Public and Workplace Liability.  Requires the Tribe to obtain  
            and maintain a commercial general liability insurance policy  







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            which provides coverage of no less than $10 million.  Also,  
            requires the Tribe to adopt a Tort Liability Ordinance  
            containing provisions that are the same as California tort law  
            to govern all claims of bodily injury, personal injury, or  
            property damage arising out of, connected with, or relating to  
            the casino.   


           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 may warrant an injunction where  
            appropriate.  Before commencement of a Project, and no later  
            than the issuance of the final TEIR, the Tribe shall negotiate  
            an intergovernmental agreement with the California Department  
            of Transportation (Caltrans) if state roads are impacted.  A  
            completed TEIR must be filed with the County of Amador, the  
            DOJ, the CGCC, and the State Clearinghouse.  Also, before  
            commencement of a Project, and no later than the issuance of  
            the final TEIR, the Tribe shall offer to commence negotiations  
            with the County of Amador to, amongst other things, provide  
            for the timely mitigation of any significant effect on the  
            off-reservation environment including provisions relating to  
            compensation for law enforcement, fire protection, emergency  
            medical services and any other public services, to the extent  
            such services are to be provided by the County to the Tribe as  
            a consequence of the Project.  


           Enhanced Audit and Compliance Review Procedure.  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 governmental  
            gaming test laboratory to ensure they are being operated  
            according to specified technical standards.  Also, requires  







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            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. 


           Compliance Enforcement.  Provides that 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 State Gaming  
            Agency 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.


           Labor Provision.  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  
            250 or more persons in a tribal casino facility, then the  
            provisions of the TLRO become effective.  


           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.  In lieu of participation in the  
            State's system, the Tribe may create and maintain a system  
            through self-insurance, which includes specified provisions,  
            including hearings before an independent tribunal.   
            Furthermore, the Tribe agrees that it will participate in the  







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            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.  


            Prohibitions Regarding Minors.  Provides that the Tribe shall  
            prohibit persons under the age of twenty-one (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.


           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 products,  
            including but not limited to smokeless tobacco products or  
            e-cigarettes, to anyone younger than the minimum age specified  
            in state law to legally purchase tobacco products.


           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. 


           Health and Safety Standards.  Provides that the Tribe has  
            agreed to adopt and comply with tribal health standards for  
            food and beverage handling that is 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.  The Tribe must also adopt  







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            and comply with federal and state laws forbidding harassment,  
            including sexual harassment, discrimination and retaliation.   
            Furthermore, the Tribe must maintain a $3 million insurance  
            policy for these purposes and adopt an ordinance that includes  
            a dispute resolution process. 


           Building Codes and Fire Safety.  Provides that 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 gaming  
            facility construction to meet or exceed the applicable codes.   
            Gaming facility construction, expansion, improvement,  
            modification or renovation must also comply with the federal  
            Americans with Disabilities Act. 


           Emergency Services Accessibility and Possession of Firearms.   
            Requires the Tribe to 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.  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 for twenty-five (25)  
            years following the effective date.


           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, 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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          Brief History of the Buena Vista Rancheria of Me-Wuk Indians


          The Tribe is a federally-recognized Indian tribe that occupies a  
          67.5 acre Indian reservation, the Buena Vista Rancheria.  Me-Wuk  
          Indians have occupied the area known as Buena Vista since at  
          least 1817, and the Tribe has occupied the land constituting the  
          Buena Vista Rancheria from as early as 1905.  The Buena Vista  
          Rancheria was purchased in 1927 by the United States and held in  
          trust for the Tribe.  In 1958, Congress adopted the California  
          Rancheria Act, which terminated the federal recognition of  
          several California Indian tribes, including the Buena Vista  
          Me-Wuk Tribe.  The California Rancheria Act also terminated the  
          trust and reservation status of several California Indian  
          Rancherias, including the Buena Vista Rancheria, and, pursuant  
          to distribution plans established under the California Rancheria  
          Act, distributed the Rancheria's lands in fee to two individual  
          Indians of the Tribe, the great-grandparents of the Tribe's  
          current Chairperson, Rhonda L. Morningstar Pope.  


          In 1979, the Indian residents of the Buena Vista Rancheria  
          joined Indians from 16 other California Rancherias in a class  
          action lawsuit in federal district court against the United  
          States and the various counties in which the Rancherias were  
          located to restore their recognition as Indians and tribes, and  
          to restore the federal Indian reservation status of their lands.  
           In settlement of that litigation in 1983, the federal district  
          court entered as a stipulated judgment (as agreed to by the  
          plaintiffs, the United States, and the counties) an order (i)  
          restoring to federally-recognized status the involved tribes,  
          including the Buena Vista Me-Wuk Tribe, and (ii) further  
          restoring and confirming the involved individual Indian  
          plaintiffs as Indians, within the meaning of federal law.  In  
          further settlement of that same litigation, in 1987, the federal  
          district court entered as a stipulated judgment an order  
          restoring the boundaries of the Buena Vista Rancheria.


          The Tribe originally entered into a compact with the State in  
          1999 and in 2004, the Tribe negotiated amendments to its compact  
          making it consistent with several others entered into by the  







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          Schwarzenegger Administration.  Although the Tribe has had  
          compacts with the state since 1999 a casino has not been built  
          on the Tribe's eligible Indian lands due in part to an ongoing  
          legal dispute with Amador County.     


          According to information provided by the Tribe, Tribal  
          Chairwoman Rhonda L. Morningstar Pope took office in December of  
          2004 and over the past 12 years the Tribe has built its  
          governmental infrastructure.  The Tribe employs over 15  
          individuals that perform essential governmental and  
          administrative functions at tribal offices located on the  
          reservation and in Sacramento.  The Tribe also operates a  
          nonprofit child development center in Sacramento which serves  
          native and low income families.  Additionally, the Tribe  
          oversees an Environmental Department which administers various  
          programs, including cultural resource management, cultural  
          repatriation, solid waste management, and Clean Water Act  
          programs.  The Environmental Department has developed and  
          operated a cultural monitoring program for over three years that  
          has been responsible for training over a hundred people to work  
          as monitors for several tribes throughout California.  Most  
          importantly, the Tribe has revitalized and restored several  
          vital cultural components on its reservation, including a dance  
          arbor, riggings shacks, a sweat lodge, and an historic cemetery.  
           A new 4,000-square foot cultural center is expected to be  
          completed by the end of 2016.  


          The Tribe emphasizes that for the past eight years, it has  
          organized and hosted several annual events benefiting children,  
          elders and others in the local and native communities,  
          including: a Memorial Day Event at the Reservation attended by  
          over 800 people; an Elder's Dinner on Veteran's Days, serving  
          home-made turkey dinners to local veterans and elders; and a  
          Children's Christmas Party, attended by hundreds every year,  
          where local children watch Native dance groups and receive an  
          assortment of toys, bikes, and other Christmas gifts.  The Tribe  
          routinely collaborates with other tribes and tribal  
          organizations on events and programs serving local and native  
          communities, including the Sacramento Native American Health  
          Center, the Inter-Tribal Council of California, the California  
          Indian Manpower Consortium and the California Rural Indian  
          Health Board. 







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          Pending Litigation


          The Tribe has been involved in a legal battle that has gone on  
          for many years against local officials for the right to  
          construct the new casino on its land about five miles south of  
          the town of Ione.  The most recent case went to the U.S.  
          District Court for the District of Columbia where, in March  
          2016, the Court ruled against the County's assertion that the  
          proposed site for the casino was not a legal reservation for a  
          gambling development.  This Compact makes it explicit that the  
          Tribe may only engage in Class III gaming on "eligible" Indian  
          lands located within the boundaries of its reservation.  The  
          District Court said yes, the land is eligible - the County of  
          Amador is appealing.


          Additional background information


          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  







                                                                    AB 1282  
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          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  
          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 of Appeals rejecting a Class  
          III Tribal-State Gaming Compact negotiated by then Governor  
          Schwarzenegger with the Rincon Band of Luiseno Mission Indians.  







                                                                    AB 1282  
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          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.  


          Any payments to the State, above those needed to mitigate  
          impacts of gaming must be in exchange for a benefit deemed  
          "exclusive" to the tribe. 


          The Rincon Band 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  
          prohibited by IGRA.  


          Rincon refused to sign the amended compact which had already  
          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 of  
          Appeals 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  







                                                                    AB 1282  
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          activities, but the State's need for general tax revenue was  
          insufficient to demonstrate good faith." 


          Special Distribution Fund (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 the CGCC and the DOJ in connection with the  
          implementation and administration of compacts; (4) payment of  
          shortfalls that may occur in the 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.   
          (Pursuant to compact renegotiations that took place with several  
          of the larger gaming tribes during the Schwarzenegger  
          administration, revenue from those tribes is directed into the  
          state General Fund, instead of the SDF.)


          The law establishes a method of calculating the distribution of  
          appropriations from the SDF for grants to local government  
          agencies impacted by tribal gaming.  This method includes a  
          requirement that the State Controller, in consultation with the  
          CGCC, deposit funds into County Tribal Casino Accounts and  
          Individual Tribal Casino Accounts based upon a process that  
          takes into consideration whether the county has tribes that pay,  
          or do not pay, into the SDF.  The distribution formula "sunsets"  
          on January 1, 2021.


          Existing law also establishes an Indian Gaming Local Community  
          Benefit Committee in each county in which gaming is conducted,  
          specifies the composition and responsibilities of that  
          committee, and requires that committee to make the selection of  
          grants from the casino accounts.  Among other things, the  
          committee is responsible for establishing all application  







                                                                    AB 1282  
                                                                    Page  20


          policies and procedures for grants from the casino accounts.  
          Additionally, existing law requires the State Auditor to conduct  
          an audit every three years and report its findings to the  
          Legislature regarding the allocation and use of SDF grant  
          monies.


          Revenue Sharing Trust Fund (RSTF)


          Existing law 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 California tribes (e.g.,  
          federally-recognized non-gaming tribes 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,  
          created gaming compacts with approximately 60 California tribes.  
           Non-compact tribes are considered third-party beneficiaries of  
          the 1999 compacts.


          Tribal Nation Grant Fund (TNGF)


          This particular fund (referenced in recent compacts) was created  
          to complement the RSTF and provides for the distribution of  
          funds to non-gaming tribes, upon application of such tribes for  
          purposes related to effective self-governance, self-determined  
          community, and economic development.  Payments from this fund  
          are intended to be made to non-gaming tribes on a "need" basis,  
          upon application.


          Related/Prior Legislation


          AB 795 (Atkins, Chapter 520, Statutes of 2015) ratified the  
          tribal-state gaming compact entered into between the State of  
          California and the Sycuan Band of Kumeyaay Nation, executed on  







                                                                    AB 1282  
                                                                    Page  21


          September 2, 2015.


          AB 1540 (Gray, Chapter 531, Statutes of 2015) ratified 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.   


          AB 315 (Bigelow, Chapter 512, Statutes of 2015) ratified 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.   


          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.


          SB 1356 (De León, Chapter 314, Statutes of 2014) ratified the  
          amendment to the tribal-state gaming compact entered into  
          between the State of California 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 of  
          California and the Karuk Tribe, executed on December 4, 2013.




          FISCAL EFFECT:   Appropriation:    No          Fiscal  
          Com.:YesLocal:   No


          SUPPORT:   (Verified8/15/16)


          Agua Caliente Band of Cahuilla Indians
          Barona Band of Mission Indians
          Buena Vista Rancheria of Me-Wuk Indians







                                                                    AB 1282 
                                                                    Page  22


          California Labor Federation
          Jamul Indian Village
          Pechanga Band of Luiseno Indians
          Teamsters
          UNITE HERE, AFL-CIO
          Yocha Dehe Wintun Nation
          Viejas Band of Kumeyaay Indians


          OPPOSITION:   (Verified8/15/16)


          None received

          Prepared by:Arthur Terzakis / G.O. / (916) 651-1530
          8/16/16 12:52:37


                                   ****  END  ****