BILL ANALYSIS Ó
AB 2915
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB
2915 (Eduardo Garcia)
As Amended August 16, 2016
2/3 vote. Urgency
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|ASSEMBLY: |78-0 |(May 12, 2016) |SENATE: |38-0 |(August 22, |
| | | | | |2016) |
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Original Committee Reference: G.O.
SUMMARY: Ratifies the tribal-state gaming compact (Compact)
entered into between the State of California and the Agua
Caliente Band of Cahuilla Indians (Tribe) executed on August 4,
2016. In addition, this bill provides that, in deference to
tribal sovereignty, certain actions are not deemed projects for
purposes of the California Environmental Quality Act (CEQA);
and, stipulates, except as expressly provided, that none of the
provisions shall be construed to exempt a city, county, or city
and county, or the Department of Transportation from CEQA
requirements.
The Senate amendments delete the Assembly version of this bill,
and instead:
1)Ratify the Compact entered into between the State of
California and the Agua Caliente Band of Cahuilla Indians
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executed on August 4, 2016.
2)Supersede the 2006 amended compact (SB 957 (Torlakson),
Chapter 41, Statutes of 2007) between the State and Agua
Caliente.
3)Authorize the Tribe to operate 5,000 gaming devices within the
boundaries of the Tribe's Reservation, as described (Appendix
A).
4)With respect to this Compact, the Tribe has agreed to pay the
State its pro rata share of costs the State incurs for the
performance of its duties under the Compact. The Tribe has
also agreed to make payments into the Revenue Sharing Trust
Fund (RSTF) and the Tribal Nation Grant Fund (TNGF) that are
based on a percentage of Net Win generated from gaming devices
- the percentage increases as the number of slots increases.
Specifically, the Tribe will pay 6% of Net Win on devices up
to 2,500; 7% on devices between 2,501 and 3,000; 8% on devices
between 3,001 and 3,500; 9% on devices between 3,501 and
4,000; 10% on devices between 4,001 and 4,500; and, up to 11%
on devices between 4,501 and 5,000.
5)Provide that from its payments to the RSTF and the TNGF, the
Tribe may take credits of up to 60% for infrastructure
improvements that in part benefit county or local jurisdiction
residents, as well as those of the Tribe, fire, law
enforcement, public transit, education, tourism and other
services including investments in renewable energy projects
and payments to support capital improvements and operating
expenses for facilities within California that provide health
care services to tribal members, Indians, and non-Indians.
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6)This Compact: 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) contains provisions to protect the health
and safety of patrons, guests, and employees.
7)Provide that, in deference to tribal sovereignty, certain
actions are not deemed projects for purposes of the CEQA; and,
stipulate, 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.
8)Provide once effective, this Compact shall be in full force
and effect for 25 years following the effective date.
9)Contain an urgency clause, allowing this bill to take effect
immediately upon enactment.
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.
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3)Authorizes the conduct of Class III gaming activities to the
extent such activities are permitted by state law, a gaming
compact has been concluded by a federally recognized tribe and
the State, and the compact has been approved by the Secretary
of the Interior.
4)Limits the operation of Class III gaming activities to Indian
lands acquired on or before October 17, 1988. Provides for
certain exceptions to conduct gaming activities on Indian
lands acquired after October 17, 1988.
5)Defines Indian lands to mean all lands within the limits of
any Indian reservation, and any lands title to which is either
held in trust by the United States (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
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.
FISCAL EFFECT: Unknown
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COMMENTS: On August 15, 2016, the Assembly Governmental
Organization Committee held an informational hearing on the
tribal gaming compact entered into between the State of
California and the Agua Caliente Band of Cahuilla Indians.
Brief History and Background:
According to information provided by the Tribe, the Agua
Caliente Band of Cahuilla Indians is a federally recognized
Indian tribe located in the Coachella Valley within Riverside
County. The tribal headquarters are located in Palm Springs,
which derives its name from the ancient hot mineral springs
located in downtown Palm Springs on the Tribe's reservation.
The Tribe's reservation covers approximately 32,000 acres of the
Coachella Valley in a "checker-board" pattern, and was created
by Presidential Executive Orders in the late 1870's and spans
large portions of the cities of Palm Springs, Rancho Mirage, and
Cathedral City.
The Tribe is governed by a 5-member Tribal Council pursuant to
the Tribe's Constitution and Bylaws, which was adopted and
approved by the Tribe and the federal government in June of
1955. The Tribe has approximately 500 members. The tribal
government provides a wide array of services and benefits to
tribal members related to healthcare, education, cultural
preservation, and general welfare. The capacity of the Tribe to
provide for its members and strengthen the tribal government has
greatly increased since the establishment of tribal gaming.
In 1999, the Tribe and the State entered into a compact that
enabled the Tribe, through revenues generated by its gaming
operation, to improve the governance, environment, education,
health, safety, and general welfare of its citizens, and to
promote a strong tribal government, self-sufficiency, and to
provide essential government services to its citizens. In 2006,
based on then-existing economic indicators the Tribe and the
State entered into an amendment to the 1999 Compact, which,
among other things, significantly increased the gaming
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operation's earning potential and revenue payments to the State.
Since the time that the State and the Tribe entered into the
2006 compact, circumstances in the overall economy, the casino
gaming market, and the law, such as the Ninth Circuit's decision
in Rincon Band of Luiseno Mission Indians v. Schwarzenegger,
have changed dramatically.
The Compact's preamble states, the Tribe and the State desire to
enter into this Compact to ensure that the Tribe is the primary
beneficiary of its gaming operation and can continue to fund
essential tribal government services through gaming revenue.
With approximately 2,500 team members working within gaming and
non-gaming tribal economic development ventures, the Tribe is
one of the largest employers in the Coachella Valley. The Tribe
currently operates two casinos, two golf courses, multiple
restaurants, an entertainment venue, and also manages its real
estate holdings, which include numerous leases of reservation
lands for commercial and residential development and other
purposes. The Tribe also operates the Indian Canyons and
Tahquitz Canyon located on the Tribe's reservation. These
recreational areas located on Cahuilla ancestral lands are open
to the public and offer over 60 miles of hiking trails and other
activities so that all may enjoy the beauty of natural springs,
native palm groves, wildlife, and multiple waterfalls. Tribal
government departments, including but not limited to Economic
Development, Planning and Natural Resources, Tribal Historic
Preservation, and Emergency Services, closely partner with other
local governments and communities on infrastructure issues, as
well as other projects and initiatives to address shared
concerns.
The Tribe is a major contributor to local public and nonprofit
organizations and government agencies located within and outside
of the reservation in the cities of Palm Springs, Rancho Mirage,
Cathedral City, and in areas throughout the Coachella Valley and
beyond. The Tribe recently established the Richard M.
Milanovich Fellowship to provide funding for Native American
students who are members of any federally recognized Indian
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tribe so that they may study, live and work in Washington D.C.
through the George Washington University's Native American
Political Leadership Program.
The Compact's preamble states, this Compact will afford the
Tribe primary responsibility over the regulation of its gaming
facility and will enhance the Tribe's economic development and
self-sufficiency. The State and the Tribe agree that all terms
of this Compact are intended to be binding and enforceable.
Key Components of the Compact:
Authorized Gaming Facility: The Tribe may establish and operate
not more than six gaming facilities (only two of which may have
more than 500 gaming devices) 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).
Scope of Class III Gaming Authorized: The Tribe is authorized
to operate up to a total of 5,000 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
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.
Payments to the RSTF or the TNGF: The Tribe shall make
payments, which shall be used exclusively for the RSTF and the
TNGF, based on the following schedule:
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|Six percent of the Net Win |In excess of 350 but less than |
|generated from gaming devices |2,501 gaming devices |
| | |
|--------------------------------+--------------------------------|
|Seven percent of the Net Win |In excess of 2,500 but less |
|generated from gaming devices |than 3,001 gaming devices |
| | |
|--------------------------------+--------------------------------|
|Eight percent of the Net Win |In excess of 3,000 but less |
|generated from gaming devices |than 3,501 gaming devices |
| | |
|--------------------------------+--------------------------------|
|Nine percent of the Net Win |In excess of 3,500 but less |
|generated from gaming devices |than 4,001 gaming devices |
| | |
|--------------------------------+--------------------------------|
|Ten percent of the Net Win |In excess of 4,000 but less |
|generated from gaming devices |than 4,501 gaming devices |
| | |
|--------------------------------+--------------------------------|
|Eleven percent of the Net Win |In excess of 4,500 but less |
|generated from gaming devices |than 5,001 gaming devices |
| | |
| | |
| | |
| | |
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"Net Win" is defined as the drop from gaming devices, plus the
redemption value of expired tickets, less fills, less payouts,
less that portion of the gaming operation's payments to a
third-party wide-area progressive jackpot system provider that
is contributed only to the progressive jackpot amount.
Credits Applied to the RSTF or the TNGF: The State agrees to
provide the Tribe with annual credits for up to 60% of the
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payments otherwise due to be paid into the RSTF or TNGF for the
following:
1)Investments by the Tribe in connection with, renewable energy
projects that, in part, serve the gaming facility, to include
facilities that incorporate charging stations for electric or
other zero-emission vehicles that are available to patrons and
employees of the gaming facility;
2)The costs of services provided by the Tribe, or payments made
to the county, local jurisdictions, or non-profit and civic
organizations for purposes of improved fire, law enforcement,
public transit, education, tourism, and other services and
infrastructure improvements that serve off-reservation needs
of county or local jurisdiction residents as well as those of
the Tribe;
3)Costs incurred by the Tribe to fund the construction and
operation of a museum or to preserve cultural resources within
the county;
4)Payments to support operating expenses and capital
improvements for non-tribal governmental agencies or
facilities operating within the county or local jurisdictions;
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)Non-gaming related capital investments and economic
development or other projects by the Tribe that provide mutual
benefits to the Tribe and the State, the county or local
jurisdictions because, for instance, they have particular
cultural, social, or environmental value, or diversify the
sources of revenue for the Tribe's general fund;
7)Payments made by the Tribe pursuant to agreements with the
county or local jurisdictions for reimbursement for any loss
of property tax revenues, sales tax revenues that would
otherwise be due for retail sales at the Tribe's gaming
facility, or transient occupancy tax at the Tribe's hotel if
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it were not located on Indian lands; and
8)Payments to Indians who are not members of the Tribe for
educational, healthcare, general welfare, or vocational
purposes, or to other federally recognized tribes for
governmental or general welfare purposes.
All excess authorized credits that cannot be applied in any one
year because they would exceed the 60% may be applied as an
annual credit in all following years that this Compact is in
effect, in the same percentages, until completely exhausted.
Payments to the Special Distribution Fund (SDF): The Tribe
shall pay to the State, on a pro rata basis, the costs the State
incurs for the performance of all its duties under this Compact,
as established by the monies appropriated in the annual Budget
Act for the performance of their duties under the Class III
gaming Compacts each fiscal year for the California Gambling
Control Commission (CGCC), the California Department of Justice,
the Office of the Governor, the California Department of Public
Health Programs, Office of Problem Gambling, the State
Controller, the Department of Human Resources, and the Financial
Information System for California, or any agency or agencies the
State designates as a successor to them.
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.
Additional Compact Components:
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
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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. The agreements with local
jurisdictions or state agencies, as appropriate, required by
this provision are distinct from those agreements associated
with a specific project and required by section 11.0
(Off-Reservation Environmental and Economic Impacts).
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.
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.
Licensing Requirements and Procedures: All persons in any way
connected with the gaming operation or gaming facility who are
required to be licensed or to submit to a background
investigation under IGRA, and any others required to be licensed
under this Compact, including, without limitation, all gaming
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employees, gaming resource suppliers, financial sources, and any
other person having a significant influence over the gaming
operation, must be licensed by the Tribal Gaming Agency and
cannot have had any determination of suitability denied or
revoked by the CGCC. In addition, every gaming employee must
obtain, and thereafter maintain current, a valid tribal gaming
license, as specified.
Minimum Internal Control Standards (MICS): Requires the Tribe
to conduct its gaming activities pursuant to an internal control
system that implements MICS that are no less stringent than
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 control standards.
Patron Disputes: The Tribal Gaming Agency shall promulgate
regulations governing patron disputes over the play or operation
of any game, including any refusal to pay a patron any alleged
winnings from any gaming activities, while adhering to
regulations that meet minimum standards, as defined.
Public and Workplace Liability: The Tribe is required 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
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property damage arising out of, connected with, or relating to
the casino. The Tribe must consent to jurisdiction in the
Tribe's tribal court system, once a tribal court system is
established, or by binding arbitration before a JAMS operator,
in accordance with JAMS Comprehensive Arbitration. Any party
dissatisfied with the award of the arbitrator may invoke the
JAMS Optional Arbitration Appeal Procedure. The cost and
expenses of arbitration shall be initially borne equally by the
parties but the JAMS arbitrator shall award to the prevailing
party its costs and expenses (but no attorney fees). The Tribe
consents to the jurisdiction of the tribal court and the
arbitrator's jurisdiction, the JAMS Optional Appeal Procedure
and any action to enforce their judgments or the obligations in
this section.
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: Requires that the
software used for the play on a gaming device to be tested,
approved and certified by an independent or state governmental
gaming test laboratory. Gaming devices are required to be
tested by a gaming test laboratory and the Tribe must ensure
that it is operating in accordance with the manufacturer's
specifications. The State Gaming Agency would be authorized to
annually conduct up to four random inspections of gaming devices
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
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
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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
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.
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Workers' Compensation: The Tribe agrees that it will
participate in the State's workers' compensation program with
respect to employees employed at the gaming operation and the
gaming facility. In lieu of permitting the gaming operation and
gaming facility to participate in the State's workers'
compensation system, the Tribe may create and maintain a system
that provides redress for employee work-related injuries through
requiring insurance or self-insurance, as defined. The Tribe
agrees that it will participate in the State's program for
providing unemployment compensation benefits and unemployment
compensation disability benefits with respect to employees
employed at the gaming operation or gaming facility. The Tribe
shall withhold all taxes due to the State, except for Tribal
members living on the Tribe's reservation, and forward such
amounts to the State.
Prohibitions Regarding Minors: Prohibits persons under the age
of 18 years from being present in any room or area in which
gaming activities are being conducted unless the person is en
route to a non-gaming area of the gaming facility, or is
employed at the gaming facility in a capacity other than as a
gaming employee.
Use and Sale of Tobacco: The Tribe agrees to provide a
non-smoking area in the gaming facility and to maintain
ventilation, filtration, purification or other technologies
throughout the gaming facility, where reasonably feasible after
consideration of engineering, economic and scientific factors,
and further agrees not to offer or sell tobacco products,
including but not limited to smokeless tobacco products or
e-cigarettes, to anyone younger than the minimum age specified
in state law to legally purchase tobacco products.
Alcohol Provisions: Makes it explicit that the purchase, sale,
and service of alcoholic beverages shall be subject to state law
- the Alcoholic Beverage Control Act.
Problem Gambling: The Tribe shall continue to maintain
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safeguards against problem gambling, as defined (Training,
signage, self-exclusion program, underage play, and responsible
advertising and marketing).
Health and Safety Standards: The Tribe must adopt and comply
with federal and state laws forbidding harassment, including
sexual harassment, discrimination and retaliation.
Additionally, the Tribe must maintain a $3 million insurance
policy for these purposes and adopt an ordinance that includes a
dispute resolution process. The Tribe has agreed to comply with
federal water quality and safe drinking water standards
applicable in California. The Tribe has also agreed to adopt
and comply with health standards for food and beverage handling
that is no less stringent than State public health standards.
Emergency Services Accessibility: The Tribe must make
reasonable provisions for adequate emergency fire, medical, and
related relief and disaster services for patrons and employees.
Building Codes and Fire Safety: Gaming facility construction,
expansion, improvement, modification or renovation must comply
with the federal Americans with Disabilities Act. Requires
facilities to meet or exceed the California Building Code and
the Public Safety Code applicable to Riverside County. The
Tribe must submit to fire safety inspections by the state, and
to rectify deficiencies, lest be subject to court order
prohibiting occupancy of the portion of the gaming facility with
the deficiencies.
Authorization to Accept Wagers on Horse Racing: Authorizes
(Appendix D) the Tribe to establish 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
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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 executed, ratified, and approved by U.S.
Department of Interior (and listed in the Federal Register),
this Compact shall be in full force and effect until December
31, 2041.
Additional Background Information:
Terms of the Tribe's 2006 Amended Compact: The Tribe's 2006
amended increased the number of gaming devices the tribe could
operate from 2,000 to 5,000. Each of the two existing casinos
could operate no more than 2,000 gaming devices (up from 1,000
at each existing casino), and a third gaming facility would be
restricted from operating more than 1,000 gaming devices. The
2006 amended compact required an annual flat payment of $23.4
million to the State's general fund for the duration of the
compact, plus an annual payment of 15% of the Net Win generated
from the operation of all additional gaming devices over the
existing 2,000 devices. The Tribe's 2006 amended compact also
required annual $2 million payments into the RSTF. In addition,
the 2006 amended compact required the Tribe to maintain its
existing licenses, which included a fee-per-machine totaling
approximately $550,000 per year. The compact is valid through
2030.
Rincon Decision: In 2004, the Rincon Band of Mission Indians
sued the State in federal court after negotiations for a new
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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 gaming devices.
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 changed the dynamics of tribal-state compact
negotiations in California. While the compacts requiring these
payments stood, any new compacts or amendments of existing
compacts may no longer require General Fund contributions.
SDF: Existing law creates the SDF in the State Treasury for the
receipt of revenue contributions made by tribal governments
pursuant to the terms of the 1999 model Tribal-State Gaming
compacts and authorizes the Legislature to appropriate money
from the SDF for the following purposes: 1) grants for programs
designed to address gambling addiction; 2) grants for the
support of state and local government agencies impacted by
tribal government gaming; 3) compensation for regulatory costs
incurred by CGCC and the DOJ in connection with the
implementation and administration of compacts; 4) payment of
shortfalls that may occur in the Indian Gaming RSTF; 5)
disbursements for the purpose of implementing the terms of
tribal labor relations ordinances promulgated in accordance with
the terms of the 1999 compacts; and, 6) any other purpose
specified by law. The distribution formula "sunsets" on January
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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
community, and economic development. The fund is designed to be
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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 2016) 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.
AB 466 (Brown) of the current legislative session. Would ratify
the tribal-state gaming compact between the State of California
and the San Manuel Band of Mission Indians, executed on August
16, 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 4, 2016.
AB 2358 (Waldron) of the current legislative session. Would
ratify the tribal-state gaming compact entered into between the
State and the Pechanga Band of Luiseno Indians, executed 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
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June 28, 2016.
AB 1767 (Bigelow) of the current legislative session. Would
ratify the first amendment to the 2015 tribal-state gaming
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,
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2015.
SB 1356 (De León), Chapter 314, Statutes of 2014. Ratified the
amendment to the tribal-state gaming compact entered into
between the State and the Viejas Band of Kumeyaay Indians,
executed on August 12, 2014.
SB 1224 (Correa), Chapter 300, Statutes of 2014. Ratified the
tribal-state gaming compact entered into between the State and
the Karuk Tribe, executed on December 4, 2013.
AB 1245 (V. Manuel 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.
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AB 787 (Chesbro), Chapter 340, Statutes of 2012. Ratified the
amendment to the tribal-state gaming compact entered into
between the State and the Coyote Valley Band of Pomo Indians,
executed on July 25, 2012.
AB 1418 (Hall), Chapter 412, Statutes of 2011. Repealed those
provisions ratifying the tribal-state gaming compact entered
into between the State and Pinoleville Pomo Nation, executed on
March 9, 2009, and instead ratified the tribal-state gaming
compact entered into between the State and the Pinoleville Pomo
Nation, executed on August 8, 2011.
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.
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SB 106 (Wiggins), Chapter 37, Statutes of 2007. Ratified a new
compact between the State and the Yurok Tribe of the Yurok
Reservation.
SB 174 (Ducheny), Chapter 38, Statutes of 2007. Ratified the
first compact amendment to the compact between the State and
Sycuan.
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).
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AB 687 (Núñez), Chapter 91, Statutes of 2004. Ratified
amendments to five compacts entered into between the State and
the following tribes: Pala Band of Mission Indians; Pauma Band
of Luiseno Mission Indians of the Pauma and Yuima Reservation;
Rumsey Band of Wintun Indians; United Auburn Indian Communities;
and, Viejas Group of Kumeyaay Indians.
SB 930 (Burton), Chapter 802, Statutes of 2003. Ratified a
compact between the State and the Torres-Martinez Desert
Cahuilla Indians.
SB 411 (Ducheny), Chapter 790, Statutes of 2003. Ratified
compacts between the State and the La Posta Band of Diegueno
Mission Indians and the Santa Ysabel Band of Diegueno Mission
Indians in San Diego County.
Proposition 1A, adopted by the people of California on March 7,
2000. Modified the prohibition against casinos and lotteries in
the California Constitution to authorize the Governor to
negotiate compacts, subject to legislative ratification, for the
operation of slot machines, lottery games, and banking and
percentage card games by federally recognized Indian tribes on
Indian lands in California, in accordance with federal law.
Authorized slot machines, lottery games, and banking and
percentage card games to be conducted and operated on Indian
lands subject to the compacts.
AB 1385 (Battin), Chapter 874, Statutes of 1999. Designated the
Governor as the state officer responsible for negotiating and
executing compacts between the State and federally recognized
Indian tribes located in the State. Also, ratified 57 compacts
and created two special funds in the State Treasury (SDF and
RSTF), as specified.
SB 287 (Burton), Chapter 409, Statutes of 1998. Ratified 11
compacts negotiated between the State and Indian tribes that
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permitted class III video gaming devices on tribal lands and
established a process for ratifying other compacts.
Analysis Prepared by:
Eric Johnson / G.O. / (916) 319-2531 FN:
0004859