BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 2358


                                                                    Page  1


          CONCURRENCE IN SENATE AMENDMENTS


          AB  
          2358 (Gonzalez and Waldron)


          As Amended  August 9, 2016


          2/3 vote.  Urgency


           -------------------------------------------------------------------- 
          |ASSEMBLY:  |       |(June 1,      |SENATE: |38-0  |(August 16,      |
          |           |       |2016)         |        |      |2016)            |
          |           |       |              |        |      |                 |
          |           |       |              |        |      |                 |
           -------------------------------------------------------------------- 
                 (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:









                                                                    AB 2358


                                                                    Page  2



          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  








                                                                    AB 2358


                                                                    Page  3


            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.










                                                                    AB 2358


                                                                    Page  4


          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  








                                                                    AB 2358


                                                                    Page  5


            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.








                                                                    AB 2358


                                                                    Page  6




          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  








                                                                    AB 2358


                                                                    Page  7


          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.








                                                                    AB 2358


                                                                    Page  8




          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  








                                                                    AB 2358


                                                                    Page  9


          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  








                                                                    AB 2358


                                                                    Page  10


            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  








                                                                    AB 2358


                                                                    Page  11


            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.









                                                                    AB 2358


                                                                    Page  12



          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  








                                                                    AB 2358


                                                                    Page  13


          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  








                                                                    AB 2358


                                                                    Page  14


          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  








                                                                    AB 2358


                                                                    Page  15


          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  








                                                                    AB 2358


                                                                    Page  16


          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,  








                                                                    AB 2358


                                                                    Page  17


          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  








                                                                    AB 2358


                                                                    Page  18


          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.









                                                                    AB 2358


                                                                    Page  19



          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  








                                                                    AB 2358


                                                                    Page  20


          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  








                                                                    AB 2358


                                                                    Page  21


          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  








                                                                    AB 2358


                                                                    Page  22


          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  








                                                                    AB 2358


                                                                    Page  23


          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,  








                                                                    AB 2358


                                                                    Page  24


          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. 










                                                                    AB 2358


                                                                    Page  25


          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;  








                                                                    AB 2358


                                                                    Page  26


          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:                                             








                                                                    AB 2358


                                                                    Page  27


                          Eric Johnson / G.O. / (916) 319-2531  FN:  
          0004400