BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 1540


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          CONCURRENCE IN SENATE AMENDMENTS


          AB  
          1540 (Gray)


          As Amended  August 31, 2015


          2/3 vote.  Urgency


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          Original Committee Reference:  G.O.


          SUMMARY:  Ratifies the tribal-state gaming compact (Compact)  
          entered into between the State of California (State) and the  
          Santa Ynez Band of Mission Indians (Tribe) executed on August  
          26, 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:


          1)Ratify a tribal-state gaming compact entered into in  
            accordance with the federal Indian Gaming Regulatory Act  








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            (IGRA) 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 August 26, 2015.


          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 this bill to take effect  
            immediately upon enactment.


          AS PASSED BY THE ASSEMBLY, this bill would have repealed and  
          renumbers sections of the Government Code related to Indian  
          gaming into one stand-alone Title in the Government Code.  Makes  
          other technical non-substantive changes.


          FISCAL EFFECT:  Pursuant to the 1999 compact, the Tribe  
          currently pays $5.8 million annually into the Special  
          Distribution Fund (SDF) to cover the State's regulatory costs  
          relating to tribal gaming, including problem gambling programs,  
          and $1.3 million annually into the Revenue Sharing Trust Fund  
          (RSTF) which is directed to non-gaming and limited gaming tribes  
          in California.  










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          Under this Compact, it is estimated that the Tribe will pay  
          approximately $1 million annually into the SDF and approximately  
          $12 million annually into the RSTF or the Tribal Nation Grant  
          Fund (TNGF).  The Tribe's $12 million payment into the RSTF may  
          be offset by up to $7.2 million (the 60% credit referenced  
          below), as specified.    


          COMMENTS:  On September 1, 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 August 26, 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.   
          Under the 1999 compact, the Tribe could not operate more than  
          2,000 gaming devices.  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.  


          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 approximately 6% of the casino's Net Win  
          from the operation of gaming devices in excess of 350 devices,  
          to be shared with non-gaming and limited gaming tribes so that  
          the economic benefits of gaming reach tribal governments that  
          have not chosen to operate a tribal casino.  


          The Compact provides a framework for the sharing of gaming  
          revenue with the County of Santa Barbara (County) and other  
          stated purposes.  Specifically, the Tribe may take annual  








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          credits of up to 60% (of the 6% Net Win) for infrastructure  
          improvements and fire, law enforcement, public transit,  
          education, tourism and other services including investments in  
          renewable energy or water conservation projects and non-gaming  
          related economic development and health care facilities that  
          provide a mutual benefit to the Tribe and the local community. 


          Pursuant to the 1999 compact, the Tribe currently pays $5.8  
          million annually into the SDF and $1.3 million annually into the  
          RSTF.  Under this Compact, it is estimated that the Tribe will  
          pay approximately $1 million annually (its pro rata share) into  
          the SDF and approximately $12 million annually into the RSTF or  
          the TNGF.  Thus, the 60% credit referenced above will equate to  
          approximately $7.2 million per year.    


          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, 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.









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          Once effective (legislative ratification and federal approval  
          required), this Compact shall be in full force and effect for  
          State law purposes for 25 years (2040).


          Brief History of the Chumash Tribe and Background: 



          The Tribe is a federally recognized tribe in Santa Ynez,  
          California, in the County.  The Tribe's reservation was  
          established on December 27, 1901 under authority of the Mission  
          Indian Relief Act.  The residents of the Santa Ynez Reservation  
          are members of the Santa Ynez Band of Chumash Indians.  The  
          Santa Ynez Band of Chumash Indians is the only federally  
          recognized Chumash tribe in the nation.  

          For many years, few tribal members lived on the reservation.  It  
          was difficult to live a modern existence on the reservation  
          without running water or electricity.  The Tribe began a housing  
          program in 1979 and more tribal members moved on to the  
          reservation - both lower and upper reservation.  Today there are  
          249 residents on the Santa Ynez Reservation and 97 homes.  The  
          Tribe is governed by a democratically elected, five-member  
          tribal council.
          In 1999, the Tribe and the State entered into a Tribal-State  
          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's Chumash Casino Resort is one of the most successful  
          casinos in California.  Under the current 1999 compact terms,  
          the Tribe operates 2,000 Class III gaming devices and 38 table  
          games.  The resort is a 190,000 square foot gaming complex with  
          a casino and a hotel with 106 guest rooms and other venues.  In  
          October 2014, the Tribe began construction on a $100 million  
          casino and hotel expansion project-the largest renovation since  
          the resort opened in 2004.  This project will help boost the  








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          local economy by creating new construction jobs and supporting  
          Santa Ynez Valley businesses.  In the long term, the larger  
          hotel will create an estimated 250 new jobs and bring additional  
          tourism to the Santa Ynez Valley.


          The Tribe's casino resort has become the premiere entertainment  
          destination in the County.  More than 1,700 employees work at  
          the resort casino.  In addition, the Tribe has a diversified  
          business portfolio - it owns or has ownership interests in a  
          variety of businesses both on and off the Santa Ynez Reservation  
          including three hotels nearby in Solvang; an office building in  
          Buellton that houses various tribal business functions; and, a  
          federally qualified health clinic.


          According to the Tribe, revenue generated from the Chumash  
          Casino Resort has been used toward economic development  
          initiatives that have brought vital services to its members,  
          from health care and education to cultural and environmental  
          programs; and the Tribe is realizing their dream of building a  
          museum and cultural center.  The Tribe is committed to improving  
          the environment, education status, and the health, safety and  
          general welfare of its members and local residents.


          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  








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          as those boundaries exist as of the execution date of this  
          Compact, as legally described, and on which Class III Gaming may  
          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.  


          SDF:  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 (DOJ), 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 RSTF or TNGF:  If the Tribe operates more than  
          350 gaming devices at any time in a given calendar year, it  
          shall pay to CGCC, for deposit into the RSTF or the TNGF, 6% of  
          its Net Win from the operation of gaming devices in excess of  
          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. 









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          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) Payments by the Tribe to the County and local jurisdictions  
          operating facilities or providing services within the County for  
          purposes of improved fire, law enforcement, public transit,  
          education, tourism, and other services and infrastructure  
          improvements intended to include serving off-reservation needs  
          of County residents, and not otherwise required by  
          off-reservation environmental and economic impacts.  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 and that provide  
          economic diversification for the Tribe; 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; 5) Investments by the Tribe for water  
          treatment and conservation projects; and, 6) General welfare  
          benefits provided by the Tribe for health-care, cultural or  
          vocational purposes to non-tribal members and Native Americans  
          in the community.


          It is estimated that the 60% credit will equate up to  
          approximately $9.5 million per year.  The current contribution  
          by the Tribe to the RSTF under the 1999 compact is $1.3 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 the new compact to the RSTF is  
          approximately $6.5 million per year, or five-times greater than  
          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) Provisions providing for the timely mitigation  
          of any significant effect on the off-reservation environment, as  
          defined; 2) Provisions relating to 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) Provisions providing for  
          reasonable compensation for programs designed to address  
          gambling addiction; and 4) Provisions providing for 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  
          Net Win calculation, 3) the amount due the SDF, 4) calculation  
          of the amount due to the RSTF/TNGF, and 5) the total amount of  
          the quarterly payment.


          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  
            joint cooperation between the Tribal Gaming Agency and CGCC,  
            as described.  


          4)Environmental Protections - the Tribe must prepare a TEIR and  
            negotiate mitigation of any off-reservation impacts.  The  
            Tribe's failure to prepare an adequate TEIR when required  
            shall be deemed a breach of this Compact and furthermore shall  
            be grounds for issuance of an injunction or other appropriate  
            equitable relief.  A completed TEIR must be filed with the  
            County, the Department of Justice, the State Clearinghouse and  
            the State Gaming Agency.  Also, projects that have commenced  








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            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.


          5)Employee Protections - the Tribe agrees to participate in the  
            state's workers' compensation program with respect to  
            employees at the casino.  All disputes arising from the  
            workers' compensation laws shall be heard by the State  
            Workers' Compensation Appeals Board pursuant to the California  
            Labor Code.  The Tribe acknowledges the jurisdiction of the  
            Board in such manners.  Furthermore, the Tribe agrees that it  
            will participate in the state's unemployment compensation  
            program for providing benefits and unemployment compensation  
            disability benefits to employees at the casino.  


          6)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.


          7)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.


          8)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 Minimal Internal Control  
            Standards 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.  










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          9)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.  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.   
            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.


          10)Patron Disputes - the Tribal Gaming Agency 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  
            Tribe's tribal court system or through the tribal claims  
            commission.  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 tribal court or tribal  
            claims commission may, at the party's election, appeal to the  
            tribal appellate court or seek binding arbitration that shall  
            be settled by a retired judge, in accordance with the  
            streamlined arbitration rules and procedures of Judicial  
            Arbitration and Mediation Services (JAMS).  The Tribe agrees  
            to wave its sovereign immunity in order to be compelled in  
            federal or state court to abide by the resolution of  
            arbitration.  Currently, the Tribe has not established a  
            tribal court system or tribal claims commission.  However, the  
            tribe is investigating the feasibility of creating such in the  








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            near future.


          11)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  
            250 or more persons in a tribal casino facility, then the  
            provisions of the TLRO become effective.  The TLRO provides  
            for a secret ballot election.  The new TLRO proscribed by this  
            Compact is modeled after the Tribe's 1999 TLRO with several  
            modifications.  The new TLRO provides for union neutrality.   
            The Tribe will not oppose a union organization but can  
            advocate the benefits of working for the Tribe.  A labor union  
            must issue a Notice of Intent or Organize (NOIO).   For a  
            period of 365 days following delivery of a NOIO, the union  
            shall not engage in strikes, picketing, boycotts, attack  
            websites, or other economic activity at or in relation to the  
            tribal casino or related facility.  During the 365 days after  
            the Tribe received the NOIO, the union must collect dated and  
            signed authorization cards and complete the secret ballot  
            election.  Failure to complete the secret ballot election  
            within 365 days shall preclude the union from delivering  
            another NOIO for a period of two years (730 days).  After the  
            certification that 30% of the employees have expressed an  
            interest in the union, a notice of election shall be issued  
            and the election shall be concluded within 30 calendar days  
            thereafter.  Secret ballot elections shall be held at the  
            workplace and at least one neutral location.  Employees may  
            mail in ballots provided they are received by election day.   
            Mediation for any collective bargaining agreement impasse  
            shall be made in conjunction with the Federal Mediation and  
            Conciliation Service (FMCS).  The mediation process is modeled  
            on the Agricultural Labor Relations Act and authorizes the  
            mediator to resolve the impasse.  According to the  
            Administration, the appeals procedures have been streamlined  
            significantly in comparison to the Tribe's 1999 TLRO.   
            Disputes are presented to an arbitrator with expertise in  
            labor law and appropriate challenges to the arbitrator's  
            decision may be presented to a state superior court.








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          12)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. 


          13)Program to Mitigate Problem Gambling - the gaming operation  
            shall establish a program, approved by the Tribal Gaming  
            Agency, to mitigate pathological and problem gambling.


          14)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.


          15)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.


          16)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.


          17)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.  








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          18)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  
            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. 


          19)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.


          20)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.  Once effective, this Compact shall be  
            in full force and effect for State law purposes for 20 years  
            following the effective date


          21)Term - once effective shall be in full force and effect for  
            State law purposes for 25 years (December 31, 2040) following  
            the effective date.


          Additional Background Information:


          Rincon Decision:  In 2004, the Rincon Band of Mission Indians  








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          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  
          that the new financial concessions were nothing more than a  
          state tax on tribal casino revenues, which is prohibited by  
          IGRA.  The court concluded that a "non-negotiable, mandatory  
          payment of 10% of net win into the State treasury for  
          unrestricted use yields public revenue and is [therefore] a tax  
          and that the court was therefore required to consider the  
          State's demand as evidence of bad faith under IGRA's statutes."   
           


          The Rincon decision has changed the dynamics of tribal-state  
          compact negotiations in California.


          Pauma Band of Luiseno Mission Indians Lawsuit:  In 2010, the  
          Pauma Band of Luiseno Mission Indians ceased payments to the  
          State and brought suit against the State in federal court  
          claiming that the State acted in bad faith by misrepresenting  
          significant information relative to the number of gaming  
          machines available for licensure.  Prior to its 2004 amended  
          compact, the Tribe was paying approximately $315,000 a year to  
          the state (into the SDF and RSTF) under terms of its 1999  
          compact.  The payment rose to $7.75 million a year (initially  
          for securitizing the proposed transportation bond and  
          subsequently deposited directly into the general fund) under the  
          tribe's 2004 amended compact.  In 2013, the court sided with  
          Pauma and, thus, the state no longer receives payments from the  
          Pauma Tribe.  The State has appealed that decision.










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          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  
          pursuant to the terms of the 1999 model Tribal-State Gaming  
          Compacts and authorizes the Legislature to appropriate money  
          from the SDF for the following purposes:  1) grants for programs  
          designed to address gambling addiction;  2) grants for the  
          support of state and local government agencies impacted by  
          tribal government gaming; 3) compensation for regulatory costs  
          incurred by CGCC and the DOJ in connection with the  
          implementation and administration of compacts; 4) payment of  
          shortfalls that may occur in the Indian Gaming RSTF; 5)  
          disbursements for the purpose of implementing the terms of  
          tribal labor relations ordinances promulgated in accordance with  
          the terms of the 1999 compacts; and, 6) any other purpose  
          specified by law.  The distribution formula "sunsets" on January  
          1, 2021.


          RSTF:  Existing law also creates in the State Treasury the RSTF  
          for the receipt and deposit of moneys derived from gaming device  
          license fees that are paid into the RSTF pursuant to the terms  
          of specified tribal-state gaming compacts for the purpose of  
          making distributions to non-compacted tribes (e.g.,  
          federally-recognized non-gaming and tribes that operate casinos  
          with fewer than 350 slot machines).  Revenue in the RSTF is  
          available to CGCC, upon appropriation by the Legislature, for  
          making distributions of $1.1 million annually to non-compact  
          tribes.  The RSTF was created as part of the 1999 compacts,  
          which, in conjunction with the passage of Proposition 1A (2000),  
          created gaming compacts with approximately 60 California tribes.  
           Non-compact tribes are considered third-party beneficiaries of  
          the 1999 compacts.








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          TNGF:  The TNGF was created in the Graton Rancheria compact [AB  
          517 (Hall), Chapter 12, Statutes of 2012], as a new destination  
          for gaming revenue for distribution of funds to non-gaming and  
          limited-gaming tribes, upon application of such tribes for  
          purposes related to effective self-governance, self-determined  
          community, and economic development.  The fund is designed to be  
          fluid and payments are intended to be made to non-gaming tribes  
          on a "need" basis, upon application by non-gaming tribes.  The  
          TNGF currently does not receive funding. 


          Related legislation:  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  
          amendment to the tribal-state gaming compact entered into  
          between the State and the Viejas Band of Kumeyaay Indians,  
          executed on August 12, 2014.


          SB 1224 (Correa), Chapter 300, Statutes of 2014.  Ratified the  
          tribal-state gaming compact entered into between the State and  
          the Karuk Tribe, executed on December 4, 2013. 


          AB 1245 (V. Manuel Pérez), Chapter 462, Statutes of 2013.   
          Ratified the tribal-state gaming compact entered into between  
          the State and the Ramona Band of Cahuilla Indians located in  
          Riverside County, executed on June 10, 2013.  









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          AB 277 (Hall), Chapter 51, Statutes of 2013.  Ratified two new  
          compacts entered into between the State and the following  
          tribes:  North Fork Rancheria, executed on August 31, 2012, and  
          the Wiyot Tribe, executed on March 20, 2013. 


          AB 1267 (Hall), Chapter 6, Statutes of 2013.  Ratified the  
          amended tribal-state gaming compact entered into between the  
          State and the Shingle Springs Band of Miwok Indians, executed on  
          November 15, 2012.  


          SB 668 (Fuller), Chapter 67, Statutes of 2013.  Ratified the  
          tribal-state gaming compact entered into between the State and  
          the Fort Independence Indian Community of Paiute Indians,  
          executed on February 28, 2013.  


          AB 517 (Hall), Chapter 12, Statutes of 2012.  Ratified the  
          tribal-state gaming compact entered into between the State and  
          the Federated Indians of Graton Rancheria of Sonoma County,  
          executed on March 27, 2012.  


          AB 787 (Chesbro), Chapter 340, Statutes of 2012.  Ratified the  
          amendment to the tribal-state gaming compact entered into  
          between the State and the Coyote Valley Band of Pomo Indians,  
          executed on July 25, 2012.


          AB 1418 (Hall), Chapter 412, Statutes of 2011.  Repealed those  
          provisions ratifying the tribal-state gaming compact entered  
          into between the State and Pinoleville Pomo Nation, executed on  
          March 9, 2009, and instead ratified the tribal-state gaming  
          compact entered into between the State and the Pinoleville Pomo  
          Nation, executed on August 8, 2011.  Ratification of this  
          revised compact authorized the Tribe to operate up to 900 slot  
          machines with up to 15% of the casino's net win from the slots  
          will go to local communities and gambling mitigation and  
          regulation provisions, instead of requiring revenue  
          contributions be made to the General Fund as provided by the  








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          2009 compact.    


          AB 1020 (Chesbro), Chapter 27, Statutes of 2011.  Repealed the  
          ratification of the tribal-state gaming compact entered into  
          between the State and the Habematolel Pomo of Upper Lake,  
          executed on September 2, 2009, and instead ratified a new  
          tribal-state gaming compact entered into between the State and  
          the Habematolel Pomo of Upper Lake, executed on March 17, 2011.   
          Ratification of this revised compact authorized the Habematolel  
          Pomo of Upper Lake to operate up to 750 slot machines with up to  
          15% of the net-win from those gaming devices being paid to the  
          SDF and the RSTF, instead of requiring revenue contributions be  
          made to the General Fund as provided by the 2009 compact.


          SB 89 (Budget and Fiscal Review Committee), Chapter 1, Statutes  
          of 2010.  Ratified the tribal-state gaming compact entered into  
          between the State and the Habematolel Pomo of Upper Lake,  
          executed on September 2, 2009.


          AB 122 (Coto), Chapter 3, Statutes of 2009.  Ratified the  
          tribal-state gaming compact entered into between the State and  
          the Pinoleville Pomo Nation, executed on March 10, 2009.


          AB 3072 (Price), Chapter 334, Statutes of 2008.  Ratified the  
          first amendment to a tribal-state gaming compact entered into  
          between the State and the Shingle Springs Band of Miwok Indians,  
          executed on June 30, 2008. 


          SB 106 (Wiggins), Chapter 37, Statutes of 2007.  Ratified a new  
          compact between the State and the Yurok Tribe of the Yurok  
          Reservation. 


          SB 174 (Ducheny), Chapter 38, Statutes of 2007.  Ratified the  
          first compact amendment to the compact between the State and  
          Sycuan. 









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          SB 175 (Ducheny), Chapter 39, Statutes of 2007.  Ratified the  
          first compact amendment to the compact between the State and  
          Morongo. 


          SB 903 (Padilla), Chapter 40, Statutes of 2007.  Ratified the  
          first compact amendment to the compact between the State and  
          Pechanga. 


          SB 941 (Padilla), Chapter 226, Statutes of 2007.  Ratified the  
          first compact amendment to the compact between the State and San  
          Manuel. 


          SB 957 (Torlakson), Chapter 41, Statutes of 2007.  Ratified the  
          first compact amendment to the compact between the State and  
          Agua Caliente. 


          SB 470 (Ducheny), Chapter 527, Statutes of 2006.  Ratified the  
          first amendment to the compact between the State and the Quechan  
          Tribe of the Fort Yuma Reservation.


          SB 1117 (Burton), Chapter 856, Statutes of 2004.  Ratified two  
          new and two amended compacts entered into between the State and  
          the following tribes:  Coyote Valley Band of Pomo Indians (new  
          compact); Fort Mojave Indian Tribe (new compact); Buena Vista  
          Rancheria of Me-Wuk Indians (amended compact); and, Ewiiaapaayp  
          Band of Kumeyaay Indians (amended compact).


          AB 687 (Núñez), Chapter 91, Statutes of 2004. Ratified  
          amendments to five compacts entered into between the State and  
          the following tribes:  Pala Band of Mission Indians; Pauma Band  
          of Luiseno Mission Indians of the Pauma and Yuima Reservation;  
          Rumsey Band of Wintun Indians; United Auburn Indian Communities;  
          and, Viejas Group of Kumeyaay Indians.  Also, provided for the  
          issuance of bonds in an amount not to exceed $1.5 billion by the  
          California Infrastructure and Economic Development Bank and  








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          required the net proceeds of the sale of the compact assets to  
          be deposited in the Traffic Congestion Relief Fund and the  
          Transportation Deferred Investment Fund.


          SB 930 (Burton), Chapter 802, Statutes of 2003.  Ratified a  
          compact between the State and the Torres-Martinez Desert  
          Cahuilla Indians.


          SB 411 (Ducheny), Chapter 790, Statutes of 2003.  Ratified  
          compacts between the State and the La Posta Band of Diegueno  
          Mission Indians and the Santa Ysabel Band of Diegueno Mission  
          Indians in San Diego County.


          Proposition 1A, adopted by the people of California on March 7,  
          2000.  Modified the prohibition against casinos and lotteries in  
          the California Constitution to authorize the Governor to  
          negotiate compacts, subject to legislative ratification, for the  
          operation of slot machines, lottery games, and banking and  
          percentage card games by federally recognized Indian tribes on  
          Indian lands in California, in accordance with federal law.   
          Authorized slot machines, lottery games, and banking and  
          percentage card games to be conducted and operated on Indian  
          lands subject to the compacts.


          AB 1385 (Battin), Chapter 874, Statutes of 1999.  Designated the  
          Governor as the state officer responsible for negotiating and  
          executing compacts between the State and federally recognized  
          Indian tribes located in the State.  Also, ratified 57 compacts  
          and created two special funds in the State Treasury (SDF and  
          RSTF), as specified. 


          SB 287 (Burton), Chapter 409, Statutes of 1998.  Ratified 11  
          compacts negotiated between the State and Indian tribes that  
          permitted class III video gaming devices on tribal lands and  
          established a process for ratifying other compacts.










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          Analysis Prepared by:                                             
                          Eric Johnson / G.O. / (916) 319-2531  FN:  
          0002028