BILL ANALYSIS Ó
SB 404
Page 1
SENATE THIRD READING
SB
404 (De León)
As Amended September 2, 2015
Majority vote
SENATE VOTE: Vote not relevant
------------------------------------------------------------------
|Committee |Votes|Ayes |Noes |
| | | | |
| | | | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Transportation |16-0 |Frazier, Achadjian, | |
| | |Baker, Bloom, Campos, | |
| | |Chu, Daly, Dodd, | |
| | |Eduardo Garcia, | |
| | |Gomez, Kim, Linder, | |
| | |Medina, Melendez, | |
| | |Nazarian, O'Donnell | |
| | | | |
| | | | |
------------------------------------------------------------------
SUMMARY: Ratifies a Tribal-State Gaming Compact (Compact)
between the Viejas Band of Kumeyaay Indians (Tribe) and the
State of California (State), executed on June 28, 2016.
Specifically, this bill:
SB 404
Page 2
1)Ratifies the Compact entered into between the State of
California and the Viejas Band of Kumeyaay Indians executed on
June 28, 2016.
2)Supersedes the existing 2014 compact (SB 1356 (De León),
Chapter 314, Statutes of 2014) between the Tribe and the State
of California.
3)Authorizes the Tribe to operate a maximum of 3,500 slot
machines at not 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 in Appendix A of
this Compact. Currently, the Tribe is authorized to operate
4,500 gaming devices.
4)States the Tribe has agreed to pay the State its pro rata
share of the costs the State incurs for the performance of its
duties under the Compact as well as a graduated scale of
payments (4.75% to 7%) equal to the percentage of the "Gross
Gaming Revenue" generated per gaming device to the Revenue
Sharing Trust Fund (RSTF) or the Tribal Nation Grant Fund
(TNGF) to the benefit of tribes who do not offer gaming or
that otherwise are not substantially benefiting from gaming
operations in California.
5)Provides a framework for the sharing of gaming revenue with
the County of San Diego and other local jurisdictions.
Specifically, from its payments to the RSTF or the TNGF, the
Tribe may take annual credits of up to 60% for infrastructure
improvements and fire, law enforcement, public transit,
education, tourism and other services including investments in
renewable energy, water conservation or recycling projects and
payments to support capital improvements or operating expenses
for facilities that provide health care services to tribal
members and other members of the local community.
SB 404
Page 3
6)Provides that, in deference to tribal sovereignty, certain
actions are not deemed projects for purposes of the California
Environmental Quality Act (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.
7)States once effective (legislative ratification and federal
approval required), this Compact shall be in full force and
effect until December 31, 2041.
8)Contains 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.
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
SB 404
Page 4
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. This bill is keyed non-fiscal by the
Legislative Counsel.
SB 404
Page 5
COMMENTS:
Brief Overview of the Tribe: The Tribe, one of the remaining 12
bands of the Kumeyaay Indian Nation, is a federally recognized
tribe located on a 1,600-acre reservation in the Viejas Valley,
east of the community of Alpine in San Diego County, California.
The Tribe has a "trust" relationship with the federal
government, enforces federal laws and participates in issues
pertinent to its land and people on a government-to-government
basis.
According to information provided by the Tribe, the Tribe has
experienced tremendous economic prosperity that has successfully
helped increase access to health care, education and general
welfare to its people and their children, who will carry on the
Kumeyaay culture for years to come. Under the umbrella of
Viejas Enterprises, the Tribe's properties include Viejas Casino
& Resort; Viejas Outlet Center, a 37-acre shopping center;
Alpine Springs Recreational Vehicle Park; and Ma-Tar-Awa
Recreational Vehicle Park, the tribe's first business venture
that opened in 1976. Through revenues brought in by the Tribe's
business enterprises, "the Tribe has been able to reinvest
millions of dollars back into its community, with 90% of dollars
generated at Viejas Casino & Resort returning to the local and
state economy."
The Tribe's casino has 2,000 slot machines, up to 86 table
games, four restaurants, a deli, bingo, an off-track betting
facility, lounge, concert venues and a poker room. The Tribe
opened a 150-room hotel in March 2013. The five-story, $36
million hotel is located on the east side of the Viejas Casino.
The hotel has 99 rooms and 29 suites; a pool and hot tub, with a
patio area and cabanas; a business center; fitness room; and
room service.
SB 404
Page 6
This is the fourth Compact between the State and Viejas. This
Compact supersedes a 2014 amended compact (SB 1356 (De León))
between the Tribe and the State. The 2014 amended compact,
among other things, converted the Tribe's fixed revenue share
payment to the state into a percentage-based payment in order to
account for the impact on revenue caused by changing economic
conditions and to enhance the economic development, long-term
stability and self-sufficiency of the Tribe. The
percentage-based payment structure was intended to ensure the
Tribe remained the primary beneficiary of its gaming operation
as required by federal law.
The 2014 amended compact superseded a 2004 amended compact (AB
687 (Nuñez), Chapter 91, Statutes of 2004) between the Tribe and
the State which replaced the Tribe's initial compact signed in
1999 with Governor Gray Davis. The 2004 amended compact allowed
the Tribe to operate an unlimited number of Class III slot
machines in exchange for payments to the state General Fund for
machines added after ratification of the compact. Under the
1999 compact, the Tribe could not operate more than 2,000 gaming
devices.
The Governor's Office contends that the terms of this new
Compact reflect a continued commitment by the Tribe to revenue
sharing with non-gaming and limited gaming tribes through the
RSTF and TNGF so that the economic benefits of gaming reach
tribal governments that have not chosen to operate a tribal
casino.
The Tribe and the State agree that this Compact is designed to
enhance the Tribe's economic development and self-sufficiency
and to protect the health, safety and general welfare interests
of the Tribe and its citizens, the surrounding community, and
the California public, and to promote and secure long-term
stability, mutual respect, and mutual benefits.
SB 404
Page 7
General Compact Provisions:
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 described.
Authorized Number of Gaming Devices: The Tribe is authorized to
operate up to 3,500 gaming devices (slot machines), banking or
percentage card games, and any devices or games that are
authorized under State law to the California State Lottery. It
is not precluded from offering any form of Class II gambling.
The Tribe shall not engage in Class III Gaming that is not
expressly authorized in the Compact. Under the current compact,
the Tribe is limited to 4,500 Class III gaming devices that it
can operate. This new Compact reduces the total number of
gaming devices that the Tribe can operate by 1,000.
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.
SB 404
Page 8
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. The agreements with local
jurisdictions or state agencies, as appropriate, are distinct
from those agreements associated with a specific project and
required by section 11.0 (Off-Reservation Environmental and
Economic Impacts).
Revenue Sharing Trust Fund or Tribal Nation Grant Fund: The
Compact provides that the Tribe shall pay to the State quarterly
a revenue contribution, for deposit into the RSTF, which shall
be based upon the average number of gaming devices in operation
during such quarter, an amount equal to the percentage of the
"Gross Gaming Revenue" generated per device according to the
following schedule:
-------------------------------------------------------
| Average Number of Gaming |Percentage of Gross Gaming |
| Devices in Operation | Revenue Per Device |
| During Quarter | |
|---------------------------+---------------------------|
| 351 to 2,500 | 4.75% |
|---------------------------+---------------------------|
| 2,501 to 3,000 | 6% |
|---------------------------+---------------------------|
| 3,001 to 3,500 |7% |
| | |
| | |
| | |
-------------------------------------------------------
SB 404
Page 9
"Gross Gaming Revenue" means the win from gaming devices, which
is the difference between gaming device wins and losses before
deducting costs and expenses or deducting incentives or
adjusting for changes in progressive jackpot liability accruals.
Generally, the difference between patron wagers and the payouts
made on winning wagers on gaming devices.
The "RSTF" is a fund created by the Legislature to "share" the
benefits of casino gaming with non-gaming tribes and
limited-gaming tribes (those with less than 350 machines). Such
tribes are entitled to payments of $1.1 million per year from
the RSTF. The "TNGF" was created by the Legislature to make
discretionary distributions of funds to Non-Gaming Tribes and
Limited-Gaming Tribes upon application of such tribes for
purposes related to effective self-governance, self-determined
community, and economic development. As the RSTF is fairly
rigid in its distribution formulas, the TNGF was created to give
more flexibility in funding tribal projects that might not be
fundable by the RSTF.
Credits Applied to the RSTF or the TNGF: From its payments to
the RSTF and TNGF, the Tribe may take credits for up to 60%
thereof for the following purposes:
1)Non-gaming economic development investments that benefit the
State and the Tribe because of their cultural, social or
environmental value and that provide economic diversification
for the Tribe:
2)Investments by the Tribe for water treatment or conservation
projects and recycling projects or payments to any water
districts towards infrastructure projects in furtherance of
making potable water and sewer services provided by such water
districts available to tribal lands and the local community;
SB 404
Page 10
3)Capital improvements and operating expenses for facilities
that provide health care or assisted living services to tribal
members, Indians and non-Indians;
4)Payments to San Diego County and other local jurisdictions for
fire protection, law enforcement, public transit, education,
tourism and other services not otherwise required as
mitigation for significant off-reservation impacts of the
gaming operation in the required intergovernmental agreement.
These payments are subject to approval by the local
jurisdiction. At least 20% of the annual credits must be
utilized for such purposes;
5)General welfare benefits provided by the Tribe for
health-care, cultural or vocational purposes to non-tribal
members and Native Americans in the community;
6)Payments made by the Tribe for the cost of recycling programs,
and any improvements incorporating recycling technology, that,
in part, serve the gaming facility, or off-reservation needs
of San Diego County residents; and
7)Renewable energy projects that serve the gaming facility and
include facilities with charging stations for electric or
other zero-emission vehicles that are available to patrons and
employees of the gaming facility.
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.
SB 404
Page 11
The 2014 amended compact required the Tribe to make annual
payments of $2 million into the RSTF or the TNGF.
Indian Gaming Special Distribution Fund (SDF): Requires the
Tribe cover its share of the State's regulatory costs for Indian
gaming. As such, the Tribe will pay its pro-rata share into the
SDF to fund the costs incurred by the State in the performance
of its regulatory duties, as defined.
The 2014 amended compact required the Tribe to provide the State
a revenue contribution based upon the average number of gaming
devices equal to a percentage of the "Net win," as defined, from
such gaming devices according to the following schedule:
-----------------------------------------------------------------
| Average Number of Gaming Devices in Operation During Quarter |
| Percentage of Gaming Devices' Net Win |
| |
| |
| |
| 1 to 2,000 |
| 8% |
| |
| |
| |
| 2,001 to 2,500 |
| 10% |
| |
| |
| |
| 2,501 to 3,000 |
| 12% |
| |
| |
| |
| 3,001 to 3,500 |
| 14% |
SB 404
Page 12
| |
| |
| |
| 3,501 to 4,000 |
| 16% |
| |
| |
| |
| 4,001 to 4,500 |
| 18% |
| |
| |
| |
| |
| |
| |
| |
| |
-----------------------------------------------------------------
The 2014 amended compact also required that a portion of the
Tribe's quarterly revenue contribution to the State be allocated
to the SDF as follows: 1) During years one and two, $5 million
dollars; 2) During year three, $4 million dollars; 3) During
year four, $3 million dollars; and, 4) During year five, $2
million dollars.
In addition, the 2014 amended compact provided that in each year
of the compact, any amount of the Tribe's quarterly revenue
contributions due to be paid to the SDF that is remaining after
the Tribe's payments are made and deposited into the SDF shall
go to the General Fund.
Licensing and Regulation: Provides that a copy of the gaming
ordinance and all of its rules, regulations, procedures,
specifications, ordinances, or standards applicable to the
gaming activities and gaming operation shall be provided to the
California Gambling Control Commission (CGCC) and Bureau upon
SB 404
Page 13
request. Notice shall be given to the CGCC or Bureau of any
change or amendments to any of the, rules, regulations,
procedures, specifications, ordinances, or standards applicable
to the gaming activities and gaming operation, no later than 30
days after the change or amendment. Furthermore, the Compact
stipulates that the following documents shall be made available
in hard copy or on the casino's Web site: the gaming ordinance;
the rules of each Class III game operated by the Tribe (if they
are not displayed on the gaming device or the table); tribal
law, with respect to the gaming activities; the tort ordinance;
the employment discrimination complaint ordinance; Tribal
regulations concerning patron; the NIGC minimum internal control
standards; and this Compact. Additionally, the Compact compels
all persons connected with the gaming operation or facility in
any way, who are required to be licensed or to submit to a
background investigation under IGRA, must be licensed by the
Tribal Gaming Agency and cannot have had any determination of
suitability denied or revoked by the CGCC. This includes all
gaming employees, gaming resource suppliers, financial sources,
and any other person having a significant influence over the
gaming operation.
Minimum Internal Controls 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 National Indian Gaming Commission (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.
SB 404
Page 14
Slot Machine Testing: 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.
Slot machines 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 Tribe
shall prepare and maintain records of its compliance machine
testing provisions of this Compact while any gaming device is on
the gaming floor and for a period of at least one year after it
is removed from the gaming floor. Such records shall be made
available for inspection by the CGCC upon request.
Inspections: Allows CGCC to inspect all gaming devices in
operation at the casino, including all the software, hardware,
and associated equipment and systems that support the operation
of the gaming devices, on a random basis four times annually to
confirm that they operate and play properly.
Independent Auditor: Requires the Tribe to provide the CGCC
results from an independent auditor of a compliance audit with
the requirements concerning the manufacturer or distributor and
the slot machine testing.
Patron Disputes: The Tribe must attempt to resolve patron
disputes filed within three days of the play or operation of a
Class III game, including refusal to pay any alleged winnings.
If a patron is dissatisfied with the resolution, the Tribe shall
inform the patron in writing with 15 days of the right to
resolution of the dispute by the Tribal Gaming Agency. If
dissatisfied with the resolution, the patron has the right to
seek resolution by the tribal court or an independent review
board. The Tribal Gaming Agency shall conduct an appropriate
investigation, provide to the patron a copy of its procedures
concerning patron complaints, and render a decision in
SB 404
Page 15
accordance with industry practice. The decision shall be issued
within 60 days of the patron's request. Any party dissatisfied
with the award of the tribal court or tribal claims commission
may, at the party's election, appeal to the Intertribal Court of
Southern California Court of Appeals. However, the party
seeking appeal must bear all costs and expenses associated with
the appeal regardless of the outcome. The Tribe agrees to wave
its sovereign immunity in order to be compelled in federal or
State court to abide by the resolution of arbitration.
Tribal Environmental Impact Report (TEIR): The Tribe is
required to prepare a "TEIR" to measure off-reservation
environmental impacts including an evaluation of energy
consumption prior to initiating the development of a project for
a facility. A completed TEIR shall be filed with San Diego
County, the Department of Justice, and the State Clearinghouse.
Before the commencement of a Project, and no later than the
issuance of the final TEIR, the Tribe shall offer to commence
negotiations with San Diego County to, amongst other things,
provide for the timely mitigation of any significant effect on
the off-reservation environment including compensation for law
enforcement, fire protection, emergency medical services and any
other public services to be provided by the county 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. 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).
SB 404
Page 16
Labor Relations: Provides that the gaming activities authorized
by this Compact may only commence after the Tribe has adopted an
ordinance identical to the Tribal Labor Relations Ordinance
(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 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
Web sites, 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
SB 404
Page 17
to an arbitrator with expertise in labor law. Appropriate
challenges to the arbitrator's decision may be presented in
court.
The labor relations provisions contained within this new Compact
are consistent with the more recent compacts negotiated,
executed, and ratified.
Building Codes and Fire Safety: Requires facilities to meet or
exceed the California Building Code and the Public Safety Code
applicable to San Diego 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.
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. It requires
the Tribe to adopt a Tort Liability Ordinance stipulating that
California tort law governs claims. It provides that California
tort law shall apply to specified claims if the Tribe fails to
adopt a Tort Liability Ordinance.
Workers' Compensation and Unemployment: Provides that the Tribe
agrees to participate in the State's workers' compensation
program with respect to employees at the casino. 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. Furthermore, 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
SB 404
Page 18
such amounts to the State.
Tobacco: Requires the Tribe to provide a non-smoking area in
the Gaming Facility and not to offer or sell tobacco to anyone
that is under the minimum years of age authorized by the State
to purchase tobacco. It requires the Tribe to utilize a
ventilation system throughout the gaming facility that exhausts
tobacco smoke and provide for smoke-free areas of the casino.
Alcoholic Beverages: Provides that the purchase, sale, and
service of alcoholic beverages shall be subject to the
California Alcoholic Beverage Control Act.
Prohibition Regarding Minors: Prohibit 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, or is employed at the
gaming facility in a capacity other than as a gaming employee.
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 during the term of this Compact, as
defined, 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.
Term: 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:
SB 404
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 fell apart.
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
SB 404
Page 20
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 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.
SB 404
Page 21
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 TNGF 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 from gaming operations
in the state.
Related legislation: SB 1426 (Hall) of the current legislative
session. Provides for the ratification of a new Tribal-State
gaming compact between the State and the Yocha Dehe Wintun
Nation executed on August 4, 2016.
SB 187 (Hall) of the current legislative session. Provides for
the ratification of a new Tribal-State gaming compact between
the State and the Jamul Indian Village executed on August 4,
2016.
AB 291 (Atkins) of the current legislative session. Provides
for the ratification of a new Tribal-State gaming compact
between the State and the Barona Band of Mission Indians
executed on June 22, 2016.
AB 629 (Gonzalez) of the current legislative session. Provides
for the ratification of a new Tribal-State gaming compact
between the State and the Pala Band of Mission Indians executed
on May 6, 2016.
AB 1282 (Gray) of the current legislative session. Provides for
the ratification of a new Tribal-State gaming compact between
SB 404
Page 22
the State and the Vista Rancheria of Me-Wuk Indians executed on
June 28, 2016.
AB 2358 (Gonzalez) of the current legislative session. Provides
for the ratification of a new Tribal-State gaming compact
between the State and the Pechanga Band of Luiseno Indians
executed on August 4, 2016.
AB 1767 (Bigelow) of the current legislative session. Provides
for the ratification of the First Amendment to the Tribal-State
Gaming Compact between the State and the Jackson Rancheria Band
of Miwuk Indians.
AB 1977 (Wood) of the current legislative session. Provides for
the ratification of amendments to the Tribal-State gaming
compact between the State and the Yurok Tribe executed on August
4, 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.
SB 404
Page 23
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
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,
SB 404
Page 24
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,
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
SB 404
Page 25
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.
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 404
Page 26
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;
Rumsey Band of Wintun Indians; United Auburn Indian Communities;
and, Viejas Group of Kumeyaay Indians. Also, provided for the
issuance of bonds in an amount not to exceed $1.5 billion by the
California Infrastructure and Economic Development Bank and
required the net proceeds of the sale of the compact assets to
be deposited in the Traffic Congestion Relief Fund and the
Transportation Deferred Investment Fund.
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,
SB 404
Page 27
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:
Eric Johnson / G.O. / (916) 319-2531 FN:
0003915
SB 404
Page 28