BILL ANALYSIS Ó
SB 374
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Date of Hearing: July 15, 2015
ASSEMBLY COMMITTEE ON GOVERNMENTAL ORGANIZATION
Adam Gray, Chair
SB
374 (Hall) - As Introduced February 24, 2015
SENATE VOTE: 35-0
SUBJECT: Tribal gaming: local agencies.
SUMMARY: Deletes obsolete allocation provisions relating to
the Indian Gaming Special Distribution Fund (SDF) and makes
other code maintenance changes. Specifically, this bill:
EXISTING LAW:
1)The federal Indian Gaming Regulatory Act of 1988 provides for
the negotiation and execution of compacts for the purpose of
authorizing class III gaming on Indian lands within a state.
Additionally, the California Constitution authorizes the
Governor to negotiate and conclude compacts, subject to
ratification by the Legislature.
2)Creates in the State Treasury the SDF for the receipt and
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deposit of moneys received by the state from certain Indian
tribes pursuant to the terms of gaming compacts entered into
with the state.
3)Authorizes the Legislature to appropriate money from the SDF
as follows: (a) grants for programs designed to address gambling
addiction; (b) grants for the support of state and local
government agencies impacted by tribal government gaming; (c)
compensation for regulatory costs incurred by the California
Gambling Control Commission (CGCC) and the Department of Justice
(DOJ) in connection with the implementation and administration
of compacts; (d) payment of shortfalls that may occur in the
Indian Gaming Revenue Sharing Trust Fund (RSTF); (e)
disbursements for the purpose of implementing the terms of
tribal labor relations ordinances promulgated in accordance with
the terms of the 1999 compacts; and, (f) any other purpose
specified by law.
4)Provides that the "priority" for funding from the SDF is in
the following descending order: (a) to make payments of any
shortfalls that may occur in the RSTF; (b) grants for programs
designed to address gambling addiction; (c) compensation to the
CGCC and DOJ for regulatory functions that directly relate to
Indian gaming; and, (d) grants for the support of local
government agencies impacted by tribal gaming.
5)Creates, until January 1, 2021, a County Tribal Casino Account
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in the treasury of each county that contains a tribal casino,
which is funded according to specified formulas.
6)Requires the State Controller to divide the County Tribal
Casino Account for each county that has gaming devices that are
subject to an obligation to make contributions to the SDF into a
separate account, known as an Individual Tribal Casino Account,
for each tribe that operates a casino within the county. Each
Individual Tribal Casino Account is required to be funded in
proportion to the amount that each individual tribe paid in the
prior fiscal year to the SDF, and used for grants to local
agencies impacted by tribal casinos, as specified.
7)Requires the State Auditor to conduct an audit every three
years and report its findings to the Legislature regarding the
allocation and use of SDF grant moneys.
This bill deletes obsolete allocation provisions from specified
fiscal years relating to the SDF and takes other minor code
maintenance changes.
FISCAL EFFECT: Unknown
COMMENTS:
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Purpose of the bill : According to the author's office, this
bill is simply intended to make technical, clarifying and
conforming changes to current statutes pertaining to the SDF.
The author's office also notes that at some point this bill may
be used as a vehicle to address issues brought forth by various
entities at a March 24, 2015 informational hearing conducted by
the Senate Governmental Organization Committee titled,
"Confronting Shortfalls in Indian Gaming Funds - the Special
Distribution Fund (SDF) and the Revenue Sharing Trust Fund
(RSTF)."
During the informational hearing, the Legislative Analyst's
Office (LAO) reported that the Legislature has ratified
tribal-state gaming compacts with 73 of the State's 110
federally recognized tribes. Of these tribes, 58 currently
operate 60 casinos. These compacts require that the tribes make
payments to various state accounts under certain conditions.
Specific payment requirements differ across tribes and depend on
various factors, such as the number of slot machines operated
and/or the average slot machine net win. Currently, 46 tribes
make payments into the following three state accounts: (1) the
RSTF receives payments from 37 tribes; (2) the SDF receives
payments from 26 tribes; and, (3) the General Fund receives
payments from 11 tribes.
The LAO indicated that "as a result of amendments to several
tribal state compacts that were ratified beginning in 2007, the
SDF has seen significant decline in its fund balances. This is
because the amended compacts decreased the amount of revenue
that certain tribes are required to pay into the SDF by
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requiring that these tribes instead make payments to the General
Fund." Furthermore, the LAO stated that "the expenditures in
excess of revenues were supported by using prior-year fund
balances in the SDF and that the SDF fund balance is expected to
be exhausted in the current year."
Prior legislation : AB 1916 (Hall), Chapter 600, Statutes of
2014. Created the "Tribal Nation Grant Fund" in the State
Treasury, to be administered by the CGCC, for the receipt and
deposit of moneys received by the state from Indian tribes,
pursuant to the terms of tribal-state gaming compacts.
AB 1042 (Hall), Chapter 746, Statutes of 2013. Required the
Department of Finance, in consultation with the CGCC, to
calculate the total revenue in the SDF that will be available
for the current budget year for local government agencies
impacted by tribal gaming. In addition, appropriated $13
million from the SDF to the CGCC to provide grants to local
agencies for the 2013-14 fiscal year.
AB 2515 (Hall), Chapter 704, Statutes of 2012. Among other
things, revised the procedures governing the award of grants
from the SDF to ensure that the funds are properly used to
mitigate costs associated with tribal gaming and appropriated
$9.1 million from the SDF for grants to mitigate the impacts of
tribal gaming on local governments for the 2012-13 fiscal year.
AB 1417 (Hall), Chapter 736, Statutes of 2011. As introduced,
this measure would have reorganized statutes pertaining to
Indian gaming compacts primarily by moving them to a newly
created Title 16.5 on Tribal Gaming in the Government Code. AB
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1417 was subsequently gutted in this committee to become the
vehicle for the distribution of $9.1 million from the SDF to the
CGCC to provide grants to local agencies.
SB 856 (Budget and Fiscal Review), Chapter 719, Statutes of
2010. Among other things, appropriated $30 million from the SDF
to restore funding deleted from the Budget Act of 2007 for
grants to mitigate the impact of tribal gaming on local
governments.
AB 158 (Torrico), Chapter 754, Statutes of 2008. Enacted
several recommendations proposed by the California State Auditor
relative to the allocation and uses of proceeds from the SDF.
SB 288 (Battin), Chapter 13, Statutes of 2006. Appropriated
$20 million from the SDF for grants to local jurisdictions
impacted by tribal gaming.
SB 621 (Battin), Chapter 858, Statutes of 2003. Among other
things, established priorities and procedures for specified
funding to local governments from the SDF for mitigating impacts
from tribal casinos and appropriated $25 million from the SDF to
mitigate the impact of tribal gaming on local governments
AB 673 (J. Horton), Chapter 210, Statutes of 2003. Among other
things, specified that money in the SDF may be used to make
payment of shortfalls that may occur in the RSTF and provided
that payment for those shortfalls in the RSTF shall be the
priority use of moneys in the SDF. Also, established a
mechanism by which funds may be transferred from the SDF to the
RSTF pursuant to specified provisions of the tribal-state
compacts and appropriated the sum of $50.6 million for the
purpose of making payments to eligible Indian tribes for the
preceding fiscal year.
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REGISTERED SUPPORT / OPPOSITION:
Support
None on file
Opposition
None on file
Analysis Prepared by:Eric Johnson / G.O. / (916)
319-2531