BILL ANALYSIS Ó
AB 2358
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CONCURRENCE IN SENATE AMENDMENTS
AB
2358 (Gonzalez and Waldron)
As Amended August 9, 2016
2/3 vote. Urgency
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|ASSEMBLY: | |(June 1, |SENATE: |38-0 |(August 16, |
| | |2016) | | |2016) |
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(vote not Relevant)
Original Committee Reference: A & A.R.
SUMMARY: Ratifies the Tribal-State Gaming Compact (Compact)
between the State of California (State) and the Pechanga Band of
Luiseño Indians (Tribe) which was 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.
The Senate amendments delete the Assembly version of this bill,
and instead:
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1)Ratify the tribal-state gaming compact entered into between
the State of California and the Pechanga Band of Luiseno
Indians executed on August 4, 2016.
2)Authorize the Tribe to operate a maximum of 5,500 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. Under the terms
of its 2006 compact, the Tribe could not operate more than
7,500 gaming devices.
3)Supersede an existing 2006 amended compact between the Tribe
and the State.
4)State the Compact shall be in full force and effect for State
law purposes for 25 years following the effective date.
5)Provide the Tribe will pay the State its pro rata share of
costs the State incurs for the performance of its duties under
the Compact plus additional amounts ($500,000 up to a total of
$3 million) to cover a portion of the share of regulatory
costs for smaller gaming tribes, as defined.
6)Provide the Tribe will pay $12 million annually into the
Revenue Sharing Trust Fund (RSTF) or the Tribal Nation Grant
Fund (TNGF), to be shared with tribes that are not gaming or
that otherwise are not substantially benefiting from gaming,
as specified.
7)Establish the Local Community Credit Fund (LCCF), to be
managed by the Tribe for the purpose of providing funding for
infrastructure improvements that in part benefit county
residents, fire, law enforcement, public transit, education,
tourism, and other services including investments in renewable
energy projects, water treatment or conservation projects and
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payments to support capital improvements and operating
expenses for facilities within California that provide health
care services to tribal members, Indians, and non-Indians.
The Tribe has agreed to make quarterly payments into the LCCF
totaling $21 million per year.
8)Create the California Native American Education and
Scholarship Fund to ensure that Native American youth from
tribes without substantial gaming revenue have the financial
support to pursue and obtain undergraduate, graduate and
professional degrees. Accordingly, the Tribe has agreed to
pay $3 million annually for deposit into the Scholarship Fund,
as specified.
9)This Compact also: a) 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; b) 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; c) requires
the Tribe to adopt a Tribal Labor Relations Ordinance, as
specified; and, d) includes patron dispute, tort claims and
employment discrimination provisions.
10) Authorize the Tribe to establish (Appendix D) and
operate no more than two horse racing satellite-wagering
facilities upon the Tribe's Reservation.
11)Provide that, in deference to tribal sovereignty, certain
actions may not be deemed projects for purposes of the CEQA,
as specified.
12)Contain an urgency clause, allowing the provisions of this
bill to take effect immediately upon enactment.
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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
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 (U.S.) 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
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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.
AS PASSED BY THE ASSEMBLY, this bill increases the maximum
amount for which a state agency can directly contract with a
certified small business (SB) or a disabled veteran business
enterprise (DVBE) from $250,000 to $300,000.
FISCAL EFFECT: Unknown
COMMENTS: On August 16, 2016, the Assembly Governmental
Organization Committee held an informational hearing on the
tribal gaming compact entered into between the State of
California and the Pechanga Band of Luiseño Indians.
Brief History and Background on the Tribe:
The Pechanga people have called the Temecula Valley home since
time immemorial. The Pechanga Indian Reservation is located in
California's Temecula Valley in southwest Riverside County and
consists of more than 6,900 acres. The Tribe has more than
1,750 enrolled members.
The Pechanga Indian Reservation was established by Executive
Order of President Chester A. Arthur on June 27, 1882, formally
recognizing the Tribe's sovereignty and land-base. The Tribe is
committed to improving the environment, education status, and
the health, safety and general welfare of its members and the
surrounding community.
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The seven-member Pechanga Tribal Council is elected every two
years. The General Membership also elects the tribal secretary,
treasurer, and members and officers of the Pechanga Development
Corporation Board of Directors and the Pechanga Gaming
Commission.
The Pechanga Entertainment Center was the first major economic
investment undertaken by the Tribe and opened in 1995 with 135
employees.
In 1999, the Tribe and the State entered into a Compact to
enable the Tribe to achieve economic self-reliance, provide
essential services to its citizens, and build a strong tribal
government; to initiate a new era of tribal-state cooperation in
areas of mutual concern; and out of a respect for the will of
the voters of California who, in approving Proposition 5,
declared that specific forms of Class III gaming will be allowed
on tribal lands.
In 2002, the current Pechanga Resort & Casino opened. The
operation is one of the largest and most successful casinos in
California, with more than 3,000 gaming devices, 154 table
games, a 700-seat bingo facility, headliner concerts, 517 hotel
rooms, nine restaurants, and a spa. The Tribe also operates a
golf course, recreational vehicle resort, food mart, and a full
service gas station and mini-mart. The Resort and Casino is the
Temecula Valley's number one employer, with more than 5,000
employees and the second largest private employer in the County.
In 2006, the Tribe and the State entered into an Amendment to
the 1999 Compact that allowed the Tribe to meet additional
market demand by paying a much higher percentage of their net
gaming revenues into the state General Fund. The Tribe was
allowed to operate 5,500 additional gaming devices - which was
in addition to the 2,000 allowed for under the 1999 Compact.
The Compact also required the Tribe to coordinate with local
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police and fire agencies, to compensate local governments for
any local services that are needed, and to resolve disputes with
surrounding communities through binding arbitration. The
Compact is effective until 2030 contained protections for casino
employees and the environment.
According to the Tribe, The Resort and Casino has been an
economic success for the Tribe, enabling members of the Tribe to
reverse generations of poverty and begin achieving economic
self-sufficiency.
Additionally, the operation has been the main source of tribal
government funding for long-needed and previously unaffordable
infrastructure on the reservation. As a result, the Tribe is
upgrading substandard roads, housing, and its domestic water
system, installing lines to connect with the regional wastewater
treatment system. The Tribe also provides for public safety at
its businesses on the reservation. The Tribe has improved its
emergency services by including the construction of a fire
station, procuring modern firefighting vehicles and equipment,
establishing fully trained and certified fire personnel, as well
as licensed emergency medical technicians who serve the Resort
and Casino. The Tribe has developed an extensive Community
Park, a Youth Center, a Senior Center and a 70,000 square-foot
Tribal Government Center.
In 2013, the Tribe's total direct and indirect economic impact
resulted in the employment of 33,337 people; the payment of $1.1
billion wages, benefits, and tribal programs; and purchases
totaling $692 million with the direct employment effects of the
Tribe's activities concentrated in the Temecula Valley,
Riverside County, and San Diego County.
In 2015, the Tribe broke ground on a 568-room hotel, a two-story
spa, an events center and meeting space, and a resort-style pool
complex. The project was expected to deliver an economic output
of more than $550 million and result in 3,000 jobs from
construction-related activities.
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In recent years, Pechanga has provided over $35 million to the
City of Temecula and County of Riverside for road improvements,
public safety, and other local services. The Tribe has also
donated more than $15 million to local schools and hundreds of
regional non-profit groups working to build a stronger, shared
community. In 2012, the Tribe purchased the former site of the
proposed Liberty Quarry for $20 million to conserve and protect
a sacred place and the air quality enjoyed by families in the
southern portion of Temecula.
The Great Oak of the Pechanga Band and the land that surrounds
it is eligible for inclusion in the United States National
Register of Historic Places. The Tribe's traditional basketry
is sought by many nonnative museums for inclusion in their
collections and Pechanga's monitors guide expert archeologists
in the treatment of Pechanga artifacts.
Key Components of the Compact:
Authorized Gaming Facility: The Tribe may establish and operate
not more than two gaming facilities and engage in Class III
Gaming only on eligible Indian lands held in trust for the
Tribe, located within the boundaries of the Tribe's reservation
and trust lands as those boundaries exist as of the execution
date of this Compact, as legally described in the Compact
(Appendix A). If the Tribe chooses to open a second facility,
it may operate no more than 500 gaming devices at that second
facility.
Scope of Class III Gaming Authorized: The Tribe is authorized
to operate up to a total of 5,500 gaming devices (slot
machines); banking or percentage card games; 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
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permitted to do so under state and federal law; and, off-track
wagering on horse races at a satellite wagering facility
pursuant to certain requirements identified in Appendix D. The
Tribe shall not engage in Class III Gaming that is not expressly
authorized in the Compact.
California Native American Education and Scholarship Fund: The
Compact creates the "California Native American Education and
Scholarship Fund" (Fund), to ensure that Native American youth
from tribes without substantial gaming revenue have the
financial support to pursue and obtain undergraduate, graduate
and professional degrees. Accordingly, the Tribe agrees to pay
$3 million annually for deposit into the Fund. The Fund will be
managed by an independent foundation, or similar non-profit
third-party organization with proper credentials, agreed upon by
both the Tribe and the State to manage, administer, and account
for the funds. If the balance in the Fund exceeds $10 million,
the excess funds shall be deposited into the RSTF or, if the
RSTF is fully solvent, the TNGF.
Local Community Credit Fund: Establishes the Local Community
Credit Fund (LCCF), which is managed by the Tribe to make or
provide funding for, or make investments in projects that
mutually benefit the Tribe, County, local jurisdictions, and the
State. The Tribe shall make quarterly payments into the fund
totaling $21 million per year. The LCCF may be used for the
following purposes:
1)Payments by the Tribe to the County or local jurisdictions
operating facilities or providing services within the County
for fire, law enforcement, emergency medical services, public
transit, education, tourism, or other services and
infrastructure improvements intended to serve off-reservation
needs of County residents as well as those of the Tribe - such
payments shall be subject to approval by the County or local
jurisdiction receiving the funds;
2)To promote continued economic growth that benefits the Tribe
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and the surrounding community through investments in
facilities, infrastructure, or other projects that generate
sustained job creation and ensure the financial longevity of
the Tribe, the Tribe may utilize up to 20% of the LCCF
annually for the purpose of making payments to the principle
amount on its debt services which are secured by the assets of
the gaming operation;
3)Non-gaming related capital investments and economic
development projects by the Tribe, on or off tribal trust
lands, 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;
4)Investments, loans, or other financial obligations including
actual payments used to secure loans, to or for the benefit of
other federally recognized tribes for any purpose, including
gaming;
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;
6)Cost of services provided by the Tribe, or payments made to
the County, local jurisdictions, school districts, charter
schools, or non-profit or civic organizations operating
facilities or providing services within the County, for
cultural programs, fire services, emergency medical services,
problem gambling programs, law enforcement, public transit,
education, tourism, youth athletics and other youth programs,
or other services or infrastructure improvements that in part
serve off-reservation needs of County residents;
7)Investments in, and any funds paid to the State in connection
with, renewable energy projects that, in part, serve the
gaming facility, to include projects that incorporate charging
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stations for electric or other zero-emission vehicles that are
available to tribal members, patrons and employees of the
gaming facility or the Tribe;
8)Investments by the Tribe for water treatment or conservation
projects on real property owned by the Tribe, as well as costs
of recycling programs that, in part, serve the gaming
facility, or other on or off-reservation needs within the
County; and,
9)Grants to Native Americans who are not members of the Tribe,
or grants to other federally recognized tribes or other Native
American tribes regardless of their federal-recognition
status, for educational, cultural, or vocational purposes, or
for governmental or general welfare purposes.
Payments to the RSTF or the TNGF: The Tribe agrees to pay $12
million annually to the California Gambling Control Commission
(CGCC) for deposit into the RSTF or the TNGF.
This Compact specifies that, in no event shall the State's
general fund be obligated to make up any shortfall in the RSTF
or the TNGF or to pay any unpaid claims connected therewith. It
provides that the State's obligations related to the RSTF or the
TNGF under any Class III gaming compact, non-gaming tribes and
limited-gaming tribes are not third-party beneficiaries of this
Compact and shall have no right to seek any judicial order
compelling disbursement of any RSTF or TNGF monies to them.
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,
the administration and implementation of tribal-state gaming
compacts, and funding for the Office of Problem Gambling, as
determined by the monies appropriated in the annual Budget Act
each fiscal year to carry out those purposes, as defined.
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The Tribe further agrees to pay an additional $500,000 into the
SDF to ensure it remains solvent. In the event the pro rata
funding for the SDF statewide has proven sufficient for three
consecutive years, the parties agree to meet and confer for the
purpose of making an appropriate reduction in the additional
payment. In addition, if the Tribe's pro rata share exceeds $3
million, the Tribe shall pay the greater of its pro rata share
or $3 million.
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.
Off-Reservation Environmental and Economic Impacts: The Tribe
must prepare a Tribal Environmental Impact Report (TEIR) and
negotiate mitigation of any off-reservation impacts, including
an evaluation of energy consumption, 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, the Department of Justice, the CGCC,
and the State Clearinghouse.
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 to, amongst other things, provide
for the timely mitigation of any significant effect on the
off-reservation environment including provisions relating to
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compensation for law enforcement, fire protection, emergency
medical services and any other public services to be provided by
the County to the Tribe as a consequence of the Project.
Cost Reimbursement and Mitigation to Local Governments: The
Tribe shall enter into agreements with local jurisdictions or
state agencies, as appropriate, for such undertakings and
services that mitigate the impacts of the gaming facility, as
defined, and thereby benefit the gaming facility, the Tribe, or
other affected jurisdictions. Copies of all such agreements
shall be provided to the State.
Additional Compact Components:
Gaming Ordinance and Regulations: 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.
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
specified MICS of the NIGC. 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 in
accordance with the Tribe's authorization. The Tribe is
required to provide to 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 minimum internal
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control standards.
Public and Workplace Liability: Requires the Tribe to obtain
and maintain a commercial general liability insurance policy
that 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 gaming facility. The Tribe consents to binding arbitration
before a single arbitrator. The cost and expenses of
arbitration shall be initially borne by the Tribe but the
arbitrator may award costs to the prevailing party not to exceed
those allowable in a suit in California Superior Court, and that
any party dissatisfied with the award of the arbitrator may at
the party's election invoke the JAMS Optional Arbitration Appeal
Procedure, as defined. The Tribe consents to the arbitrator's
jurisdiction and any action to enforce or execute a judgment
based on the award.
Enhanced Audit and Compliance Review Procedures: In addition to
providing for an annual independent audit, the Compact allows
the state to conduct its own annual audit and compact compliance
review.
Inspection and Testing of Gaming Devices: Gaming devices 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. The Tribal Gaming Agency is
required to maintain adequate records that demonstrate
compliance with software and hardware specifications. The CGCC
will 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.
Labor Provisions: Rather than requiring side agreements between
the Tribe and labor organizations, the Compact incorporates
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provisions of Tribal Labor Relations Ordinance (TLRO) that has
the support of labor entities. The Compact provides that the
gaming activities authorized by this Compact may only commence
after the Tribe has adopted an ordinance identical to the TLRO
provided for in 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 TLRO
first incorporated into the 2015 compact with the Santa Ynez
Band of Chumash Indians and reflects significant changes from
the 1999 TLRO.
The TLRO provides for a neutrality agreement between the Tribe
and union if the union requests this. If the union first offers
in writing not to engage in strikes, picketing, boycotts, attack
websites, or other economic activity at or in relation to the
tribal casino or related facility and issue and deliver a Notice
of Intent to Organize (NOIO) to the Tribe, then the Tribe must
not disparage or advocate opposition to the union. The Tribe
may make factual representations to employees concerning
employment with the Tribe, but may not take actions or make
statements that could reasonably be interpreted as criticizing
the union or advocating against unionization. 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. Secret ballot elections shall be held at a
location or locations determined by the employer, but there must
be at least neutral location. Employee may mail ballots so long
as received by Election Day. Failure to complete the secret
ballot election within 365 day under the neutrality agreement
shall preclude the union from delivering another NOIO for a
period of 730 days
Where there is a neutrality agreement, the TLRO provides for
resolution of collective bargaining impasse through interest
arbitration by the Federal Mediation and Conciliation Service
(FMCS). The interest arbitration procedure is modeled on the
Mandatory Mediation and Conciliation provisions in the
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Agricultural Labor Relations Act. Other disputes are presented
to an arbitrator with expertise in labor law. Appropriate
challenges to the arbitrator's decision may be presented in
court.
Workers' Compensation: The Tribe agrees that it will
participate in the state's unemployment compensation program for
providing benefits and unemployment compensation disability
benefits to employees at the casino. The Tribe shall withhold
all taxes due to the state, except for Tribal members living on
the Tribe's reservation, and forward such amounts to the state.
The Tribe agrees to participate in the State's workers'
compensation program with respect to employees at the gaming
operation and the gaming facility. 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.
Prohibitions Regarding Minors: Prohibits persons under the age
of 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.
Use and Sale of Tobacco: The Tribe agrees to provide a
non-smoking area in the gaming facility and to incorporate
ventilation, filtration, purification or other technologies
throughout the gaming facility, where reasonable and feasible
after consideration of engineering, economic and scientific
factors, and further agrees not to offer or sell tobacco to
anyone under 18 years of age.
Alcohol Provisions: Makes it explicit that the purchase, sale,
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and service of alcoholic beverages shall be subject to state law
the Alcoholic Beverage Control Act.
Problem Gambling: The Tribe shall continue to maintain
safeguards against problem gambling, as defined
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 gaming facility
construction to meet or exceed the construction standards set
forth in the applicable codes. Gaming facility construction,
expansion, improvement, modification or renovation must also
comply with the federal Americans with Disabilities Act.
Provides that any construction of any Project that has taken
place or has commenced prior to the effective date of this
Compact shall be subject to the facility license rules outlined
in the tribal-state compact between the State and the Tribe
executed on August 28, 2006, provided that the Project was
previously approved.
Health and Safety Standards: The Tribe must also adopt and
comply with tribal law that is consistent with federal and state
laws forbidding harassment, including sexual harassment,
discrimination and retaliation. In addition, the Tribe must
maintain an insurance policy for these purposes and adopt an
ordinance that includes a dispute resolution process.
The Tribe has agreed to adopt and comply with tribal health
standards for food and beverage handling that are no less
stringent than State public health standards. The Tribe has
also agreed to comply with federal water quality and safe
drinking water standards applicable in California.
Emergency Services Accessibility: The Tribe must make
reasonable provisions for adequate emergency fire, medical, and
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related relief and disaster services for patrons and employees.
Authorization to Accept Wagers on Horse Racing: Authorizes the
Tribe to establish (Appendix D) and operate no more than two
horse racing satellite-wagering facilities upon the Tribe's
Reservation. Specifically, the Tribe must submit to the
California Horse Racing Board (CHRB) an application to operate
such a facility and each facility must be operated in conformity
with IGRA, the Appendix, and this Compact. If provisions of the
Compact are in conflict with California Horse Racing Law or the
CHRB's Rules and Regulations specific to the conduct of
satellite wagering, California Horse Racing Law and the CHRB's
Rules and Regulations shall control, as defined.
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, 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.
Effective Date: Once effective (legislative ratification and
federal approval required), this Compact will be in full force
and effect for 25 years following the effective date (2041).
Additional Background Information:
Terms of the Tribe's 2006 Amended Compact: The Tribe's 2006
amended compact authorized no more than 7,500 gaming devices.
The amended compact required an annual flat payment of $42.5
million to the State's general fund, plus an annual payment of
15% of the net win generated from the operation of between
2,000-5,000 gaming devices. The amended compact also required
an annual $2 million payment into the RSTF. The compact is
valid through 2030.
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Rincon Decision: In 2004, the Rincon Band of Mission Indians
sued the State in federal court after negotiations for a new
gambling agreement with then-Governor Schwarzenegger came to a
standstill. 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.
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 Department of Justice (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
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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.
According to CGCC, which administers the RSTF, a revenue
shortfall of approximately $15.5 million is anticipated this
fiscal year. According to the Department of Finance (DOF), the
SDF has sufficient funds in it for fiscal year 2016-2017 to
cover the RSTF shortfall. However, DOF indicates that it
projects a $1.6 million SDF balance deficiency in fiscal year
2017-2018 assuming a $25 million transfer to the RSTF. To cover
the anticipated shortfall in 2017-2018, approximately $1.6
million will need to be transferred from the General Fund in
order to ensure full RSTF payments are made to non-gaming and
limited-gaming tribes. A similar amount was redirected in
2015-2016. Recent compacts, including this one, have attempted
to alleviate the shortfall situation by requiring payments by
Tribes directly to the RSTF. This model appears to be a
template for future compacts, as well.
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
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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 629 (Gonzalez) of the current
legislative session. Would ratify the tribal-state gaming
compact entered into between the State and the Pala Band of
Mission Indians, executed on May 6, 2016.
SB 187 (Hall) of the current legislative session. Would ratify
the tribal-state gaming compact entered into between the State
and the Jamul Indian Village, executed August 8, 2016.
AB 2915 (E. Garcia) of the current legislative session.
Provides for the ratification of a new Tribal-State gaming
compact between the State and Agua Caliente Band of Cahuilla
Indians, executed on August 4, 2016.
AB 1977 (Wood) of the current legislative session. Would ratify
the first amendment to the 2006 tribal-state gaming compact
entered into between the State and the Yurok Tribe, executed
August 4, 2016.
SB 1313 (Hall) of the current legislative session. Would ratify
the tribal-state gaming compact entered into between the State
and the Yocha Dehe Wintun Nation, executed on August 4, 2016.
AB 1282 (Gray) of the current legislative session. Would ratify
the tribal-state gaming compact entered into between the State
and the Buena Vista Rancheria of Me-Wuk Indians, executed on
June 28, 2016.
AB 1767 (Bigelow) of the current legislative session. Would
ratify the first amendment to the 2015 tribal-state gaming
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compact entered into between the State and the Jackson Rancheria
Band of Miwuk Indians, executed on June 22, 2016.
SB 404 (De León) of the current legislative session. Would
ratify the tribal-state gaming compact entered into between the
State and the Viejas Band of Kumeyaay Indians, executed on June
22, 2016.
AB 291 (Atkins) of the current legislative session. Would
ratify the tribal-state gaming compact entered into between the
State and the Barona Band of Mission Indians, executed on June
22, 2016.
Prior legislation: AB 795 (Atkins), Chapter 520, Statutes of
2015. Ratified the tribal state gaming compact entered into
between the State 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 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 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 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
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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 Perez), 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.
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,
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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.
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.
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 2010. 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.
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SB 174 (Ducheny), Chapter 38, Statutes of 2007. Ratified the
first compact amendment to the compact between the State and
Sycuan.
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;
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Rumsey Band of Wintun Indians; United Auburn Indian Communities;
and, Viejas Group of Kumeyaay Indians.
SB 930 (Ducheny), 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.
Analysis Prepared by:
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Eric Johnson / G.O. / (916) 319-2531 FN:
0004400