BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                     SB 404


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          SENATE THIRD READING


          SB  
          404 (De León)


          As Amended  August 11, 2016


          2/3 vote.  Urgency


          SENATE VOTE:  36-0


           -------------------------------------------------------------------- 
          |Committee       |Votes|Ayes                   |Noes                 |
          |                |     |                       |                     |
          |                |     |                       |                     |
          |                |     |                       |                     |
          |----------------+-----+-----------------------+---------------------|
          |Transportation  |16-0 |Frazier, Achadjian,    |>                    |
          |                |     |Baker, Bloom, Campos,  |                     |
          |                |     |Chu, Daly, Dodd,       |                     |
          |Vote not        |     |Eduardo Garcia, Gomez, |                     |
          |relevant        |     |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:









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          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. 









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          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  








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            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:   


           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.  








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          This is the fourth Compact between the State and Viejas.  This  
          Compact supersedes a 2014 amended compact (SB 1356 (De León,  
          Chapter 314, Statutes of 2014) 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  








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          the California public, and to promote and secure long-term  
          stability, mutual respect, and mutual benefits. 


          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.


          Cost Reimbursement and Mitigation to Local Governments:  The  








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          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    |                           |
             |      During Quarter       |                           |
             |                           |    Revenue Per Device     |
             |                           |                           |
             |                           |                           |
             |---------------------------+---------------------------|
             |       351 to 2,500        |           4.75%           |
             |                           |                           |
             |                           |                           |
             |---------------------------+---------------------------|
             |      2,501 to 3,000       |            6%             |
             |                           |                           |
             |                           |                           |
             |---------------------------+---------------------------|
             |      3,001 to 3,500       |7%                         |








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             |                           |                           |
             |                           |                           |
             |                           |                           |
             |                           |                           |
             |                           |                           |
              ------------------------------------------------------- 


             "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  








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            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; 


          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. 








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          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. 


          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%                                |
          |                                                                 |








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          |                                                                 |
          |                                                                 |
          |                                                                 |
          |                                                                 |
          |                         2,001 to 2,500                          |
          |                                                                 |
          |                                                                 |
          |                               10%                               |
          |                                                                 |
          |                                                                 |
          |                                                                 |
          |                                                                 |
          |                                                                 |
          |                         2,501 to 3,000                          |
          |                                                                 |
          |                                                                 |
          |                               12%                               |
          |                                                                 |
          |                                                                 |
          |                                                                 |
          |                                                                 |
          |                                                                 |
          |                         3,001 to 3,500                          |
          |                                                                 |
          |                                                                 |
          |                               14%                               |
          |                                                                 |
          |                                                                 |
          |                                                                 |
          |                                                                 |
          |                                                                 |
          |                         3,501 to 4,000                          |
          |                                                                 |
          |                                                                 |
          |                               16%                               |
          |                                                                 |
          |                                                                 |
          |                                                                 |
          |                                                                 |





                                                                    


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          |                                                                 |
          |                         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  
          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  








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          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 National Indian Gaming  
          Commission (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 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.










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          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  
          accordance with industry practice.  The decision shall be issued  
          within 60 days of the patron's request.  Any party dissatisfied  








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          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 waive  
          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 "Tribal Environmental Impact Report"  
          (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).










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          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  
          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  








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          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  
          such amounts to the State.








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          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:










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          Rincon Decision:  In 2004, the Rincon Band of Mission Indians  
          sued the State in federal court after negotiations for a new  
          gambling agreement with then-Governor Schwarzenegger 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 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  








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          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.










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          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  
          the State and the Vista Rancheria of Me-Wuk Indians executed on  








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          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. 


          AB 475 (Bigelow), Chapter 8, Statutes of 2015.  Ratified the  
          tribal-state gaming compact entered into between the State and  








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          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,  
          executed on February 28, 2013.










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          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  
          tribal-state gaming compact entered into between the State and  
          the Pinoleville Pomo Nation, executed on March 10, 2009. 









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          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 470 (Ducheny), Chapter 527, Statutes of 2006.  Ratified the  
          first amendment to the compact between the State and the Quechan  








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          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,  
          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  








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          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:  
          0003946