BILL ANALYSIS                                                                                                                                                                                                    Ó

          |SENATE RULES COMMITTEE            |                       AB 1977|
          |Office of Senate Floor Analyses   |                              |
          |(916) 651-1520    Fax: (916)      |                              |
          |327-4478                          |                              |

                                   THIRD READING 

          Bill No:  AB 1977
          Author:   Wood (D), et al.
          Amended:  8/9/16 in Senate
          Vote:     27 - Urgency


           NOTE:  On August 9, 2016, the Senate Committee on Governmental  
                 Organization held an informational hearing on the amended  
                 tribal gaming compact entered into between the State of  
                 California and the Yurok Tribe.

           SUBJECT:   Tribal gaming:  compact amendment ratification

          SOURCE:    Author

          DIGEST:  This bill ratifies the amended tribal-state gaming  
          compact (Amended Compact) entered into between the State of  
          California and the Yurok Tribe (hereafter "Tribe") executed on  
          August 4, 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.


          Existing law:


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          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  


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            jurisdiction over any cause of action initiated by a tribal  
            government alleging that the State failed to negotiate in good  
            faith to conclude a compact.  Prescribes the remedy, mediation  
            supervised by the courts, if it is found that the State failed  
            to negotiate in good faith to conclude a compact.

          7)Authorizes the Governor, under the California Constitution, to  
            negotiate and conclude compacts, subject to ratification by  
            the Legislature.

          This bill ratifies the Amended Compact entered into between the  
          State of California and the Yurok Tribe on August 4, 2016.  The  
          Amended Compact conforms the workers' compensation provisions of  
          the Tribe's 2006 compact to those of more recent compacts.  All  
          other provisions of the existing compact remain intact.

          In 2006, the Tribe entered into a tribal-state compact (SB 106,  
          Wiggins, Chapter 37, Statutes of 2007) that authorized it to  
          operate one gaming facility at a future site and an additional  
          one at an ancillary facility (a fuel mart), both of which are  
          located within its existing reservation in Del Norte County.   
          The 2006 compact authorized the Tribe to operate no more than 99  
          gaming devices (slot machines) and specified that no more than  
          20 of the devices may be operated at the ancillary gaming  

          Under terms of the 2006 compact, the Tribe agreed to pay into  
          the State General Fund an annual fee, as specified, based on a  
          percentage of its net win from its operation of gaming devices.   
          Also, the 2006 compact provided that as long as the Tribe's  
          membership remained at least 4,000 members it could deduct from  
          the amount to be paid to the State certain payments made  
          pursuant to intergovernmental agreements with Del Norte County  
          and Humboldt County. 

          Additionally, the 2006 compact contained other provisions  
          relating to: exclusivity; licensing requirements and procedures  
          for employees and gaming suppliers; testing and inspection of  


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                                                                    Page  4

          gaming devices; rules and regulations for the operation and  
          management of the gaming facility; off-reservation environmental  
          impacts; public and workplace health and safety; and labor  

          Furthermore, the 2006 compact required the Tribe to participate  
          in the State's workers' compensation program with respect to  
          employees employed at the gaming facility. The 2006 compact  
          provides that its terms may be amended upon written agreement of  
          both parties.  The parties recently agreed in writing to  
          negotiate regarding amending the 2006 compact's provisions  
          pertaining to mandatory participation in the State's workers'  
          compensation program.

          The Amended Compact's preamble notes that the State and the  
          Tribe share an interest in creating a framework within which the  
          gaming facility can operate successfully to generate revenue for  
          essential government programs for tribal members while also  
          ensuring that other interests, including an efficient and  
          effective system to address the appropriate costs arising from  
          employees who are injured or become sick while performing  
          work-related duties, are also furthered. 


          According to information provided by the Tribe, the Yurok Tribe  
          is the largest tribe in California with over 6,100 tribal  
          members encompassing a reservation of approximately 57,000  
          acres.  The Tribe is a natural resource tribe with federally  
          reserved rights to the water and fish of the Klamath River.  The  
          Yurok Reservation is located in the most isolated region of  
          Northwest California, consisting of lands one mile on each side  
          of the lower 44 miles of the Klamath River from just above the  
          confluence of the Trinity River at Weitchpec to the mouth of the  
          river as it flows into the Pacific Ocean. Reservation lands  
          include parts of Humboldt and Del Norte Counties, two of the  
          largest land based counties in the state of California.  


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                                                                    Page  5

          Following ratification of its 2006 tribal-state gaming compact,  
          the Tribe opened the Redwood Hotel Casino in 2014 which consists  
          of two separate entities, the Redwood Holiday Inn Express and  
          the Redwood Casino.  The Redwood Holiday Inn Express is a  
          60-room hotel complete with exercise room and pool.  The Redwood  
          Casino, located in Klamath, CA, currently hosts 96 Class III  
          machines and includes the Abalone Bar and Grill - a 50-seat  
          restaurant and sports bar.  The development of the Redwood Hotel  
          Casino is only a portion of a broader Master Plan for the  
          down-river Yurok community, which also includes the Yurok  
          Justice Center, the Yurok Visitor Center, the Klamath Gateway  
          Project, a new wastewater treatment center, and provisions for  
          increased public safety presence by Del Norte County deputized  
          Yurok police officers. 


          Workers' Compensation.  Terms of the 2006 compact provide that:  
          (a) the Tribe agrees to participate in the State's workers'  
          compensation program with respect to employees at the casino and  
          all disputes arising from the workers' compensation laws shall  
          be heard by the State Workers' Compensation Appeals Board  
          pursuant to the California Labor Code; (b) the Tribe  
          acknowledges the jurisdiction of the Board and the courts of the  
          State of California in such manners; (c) 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; and, (d) 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. 

          This Amended Compact repeals the above-referenced provisions,  
          recasts them, as specified, and additionally, provides that in  
          lieu of participation in the State's workers' compensation  
          system, the Tribe may create and maintain a system through  
          self-insurance, which includes specified provisions, including  
          hearings before an independent tribunal.  The changes reflect  


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          conformity with more recent compacts


          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  

          IGRA distinguishes between three classes of gaming (Class I,  
          Class II, and Class III) and provides for different forms of  
          regulation for each class.  Class I gaming includes "social  
          games" for minor prizes or "traditional forms of Indian gaming."  
           Class II gaming is defined to include bingo and card games that  
          are explicitly authorized by the laws of the state, or that are  
          not explicitly prohibited by the laws of the state and are  
          played at any location in the State, so long as the card games  
          are played in conformity with those laws and regulations.  Class  
          III gaming includes such things as slot machines, casino games  
          and banked card games such as black jack and baccarat.  Class  
          III gaming may only be conducted under terms of a compact  
          negotiated between an Indian tribe and a State.  

          IGRA was enacted against a legal background in which Indian  
          tribes and individuals generally are exempt from state taxation  
          within their own territory.  IGRA provides that with the  
          exception of assessments permitted under the statute, to defray  
          the State's costs of regulating gaming activity, IGRA shall not  
          be interpreted as conferring upon a State authority to impose  
          any tax, fee, charge, or other assessment upon an Indian tribe  
          to engage in Class III activity.  Nor may a State refuse to  
          enter into negotiations based on the lack of authority to impose  


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                                                                    Page  7

          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."

          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  
          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.   


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          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 
          California Labor Federation
          Jamul Indian Village 
          Pechanga Band of Luiseno Indians
          Viejas Band of Kumeyaay Indians
          Yocha Dehe Wintun Nation
          Yurok Tribe

          OPPOSITION:   (Verified8/15/16)


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          None received

          Prepared by:Arthur Terzakis / G.O. / (916) 651-1530
          8/15/16 20:27:00

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