BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 1313|
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UNFINISHED BUSINESS
Bill No: SB 1313
Author: Hall (D)
Amended: 8/18/16
Vote: 27 - Urgency
PRIOR VOTES NOT RELEVANT
ASSEMBLY FLOOR: 80-0, 8/23/16 - See last page for vote
NOTE: On August 9, 2016, the senate committee on Governmental
Organization held an informational hearing on the tribal
gaming compact entered into between the State of
California and the Yocha Dehe Wintun Nation.
SUBJECT: Tribal gaming: compact ratification
SOURCE: Author
DIGEST: This bill ratifies the tribal-state gaming compact
(Compact) entered into between the State of California and the
Yocha Dehe Wintun Nation executed on August 4, 2016.
Additionally, this bill provides that, in deference to tribal
sovereignty, certain actions are not deemed projects for
purposes of the California Environmental Quality Act (CEQA);
and, stipulates, except as expressly provided, that none of the
provisions shall be construed to exempt a city, county, or city
and county, or the Department of Transportation from CEQA
requirements.
Assembly Amendments delete the contents of this bill relating to
the California Gambling Control Commission and instead add
language pertaining to ratification of the Yocha Dehe Wintun
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Nation Compact.
ANALYSIS:
Existing law:
1)Provides, under the Indian Gaming Regulatory Act (IGRA), for
the negotiation and conclusion of compacts between federally
recognized Indian tribes and the State for the purpose of
conducting Class III gaming activities on Indian lands within
a State as a means of promoting tribal economic development,
self-sufficiency, and strong tribal governments.
2)Authorizes expressly a number of tribal-state gaming compacts
between the State of California and specified Indian tribes.
3)Authorizes the conduct of Class III gaming activities to the
extent such activities are permitted by state law, a gaming
compact has been concluded by a federally recognized tribe and
the State, and the compact has been approved by the Secretary
of the Interior.
4)Limits the operation of Class III gaming activities to Indian
lands acquired on or before October 17, 1988. Provides 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 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.
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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.
This bill ratifies the Compact entered into between the State of
California and the Yocha Dehe Wintun Nation (hereafter "Tribe")
executed on August 4, 2016 and supersedes the Tribe's 2004
amended compact. Under this Compact, the Tribe may operate a
maximum of 3,500 gaming devices (slot machines) on eligible
Indian lands held in trust for the Tribe and located within the
boundaries of the Tribe's Reservation (as described in Appendix
A) in the Capay Valley, Yolo County, CA.
The Tribe's 2004 amended compact, among other things, eliminated
the cap on the number of slot machines that could be operated by
the Tribe and required the Tribe to make annual payments to the
State of $25 million for 18 years, in addition to a $2 million
annual payment into the Revenue Sharing Trust Fund (RSTF), as
well as, a graduated scale of progressively higher annual fees
for additional slot machines above the existing limit of 2,000
slot machines, reaching up to $25,000 per additional machine
(4,500 machines and above). The fees represented approximately
15% of the net win of the additional machines on average.
With respect to this Compact, the Tribe has agreed to pay the
State its pro rata share of costs the State incurs for the
performance of its duties under the Compact plus an additional
amount of $1.6 million, capped at $3 million, to insure the
Special Distribution Fund (SDF) remains solvent and to cover a
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portion of the regulatory costs for small gaming tribes. The
Tribe has also agreed to pay $18 million annually into the RSTF
or the Tribal Nation Grant Fund (TNGF), to be shared with tribes
that are not gaming or that otherwise are not substantially
benefiting from gaming. The Tribe may take an annual credit of
up to $9 million (out of the $18 million) for various
investments and infrastructure improvements that in part benefit
county residents, landless northern California tribes,
dis-enrolled Indians, fire, law enforcement, emergency medical
services, public transit, education, tourism, and for facilities
that provide health care services to tribal members and other
members of the local community.
Also, under this Compact, the Tribe has agreed to pay the State
annually, a revenue contribution of $15 million and permits the
Tribe to take an annual credit of up to $9 million (out of the
$15 million) for the Tribe's payments covering state or local
government services, mitigation of the gaming operation's
impacts, and economic development or revitalization. This
Compact also provides for an additional credit of up to $6
million (out the $15 million) for projects, initiatives or
investments which mitigate the impacts of gaming or provide
benefits to the State or tribes in California. The Tribe may
also deposit annually up to $2 million of that $6 million into a
scholarship fund created by the Tribe and the State (California
Native American Education and Scholarship Fund) to provide
scholarships for undergraduate, graduate and professional
education that benefit students of non-gaming or limited-gaming
tribes located in California.
Furthermore, the Compact: (1) provides a regulatory framework
that respects the role of the tribal gaming agency as the
primary regulator while also ensuring that state gaming
regulators fulfill their responsibilities; (2) requires the
Tribe to conduct its gaming activities pursuant to an internal
control system that implements minimum internal controls that
are no less stringent than those in federal regulations; (3)
provides that the Tribe may retain its existing Tribal Labor
Relations Ordinance (TLRO) which has been in effect for almost
20 years; and, (4) contains provisions to protect the health and
safety of patrons, guests, and employees.
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BRIEF HISTORY OF THE YOCHA DEHE WINTUN NATION
Yocha Dehe Wintun Nation is a federally recognized Indian tribe
located in northern Yolo County, about 45 miles northwest of
Sacramento. In 1999, the Tribe and the State entered into a
tribal-state gaming compact which was subsequently amended in
2004. Yocha Dehe means "home by the spring water" in the
Tribe's native Patwin language, and literally describes the
lands upon which its people live, and have lived, since time
immemorial. The Tribe's relationship with the United States
began in the 1900's when its people were relocated to a barren,
non-irrigable parcel in Rumsey, the town for which their
government, and reservation, was once named, and thereafter, to
a small parcel of land, in the Capay Valley, where they managed
to cultivate small amounts of food, but nonetheless lived in
poverty, depending on the United States government for survival.
In 1985, the Tribe opened its first facility, a bingo hall,
which generated money to help support its government and provide
for the health and welfare of its struggling people. Today, the
Tribe owns and operates Cache Creek Casino Resort, which opened
in 2004 and employs approximately 2,300 people, making it the
largest private employer in Yolo County, and a major economic
engine in the region. The casino/resort, located on State
Highway 16 in Brooks, offers more than 2,000 slot machines, 122
table games, hotel rooms and suites, spa, restaurants, gift
shop, mini mart, headliner concerts, an 18-hole golf course and
other amenities.
The Tribe has 1,120 total acres of trust land but manages more
than 13,000 acres of land, approximately 1,500 acres of which
are farmed with 14 crops. Also, about 500 head of Angus cross
cattle graze on the Tribe's land. Additionally, the Tribe
operates a state-of-the-art olive mill. The Tribe notes that
its Fire Department recently received international
accreditation for the second time and remains the only Indian
fire department to ever earn such accreditation. The Tribe
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currently provides nearly $6 million annually to Yolo County
through an MOU. Since 2000, the Tribe has contributed more than
$25 million dollars to local partners in the community through
their philanthropic Community Fund.
KEY COMPONENTS OF THE COMPACT
Scope of Class III Gaming Authorized. Provides that the Tribe
is authorized to operate a maximum of 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, provided that the Tribe will not offer such games
through use of the Internet unless others in the state not
affiliated with or licensed by the California State Lottery are
permitted to do so under state and federal law. The Tribe shall
not engage in Class III Gaming that is not expressly authorized
in the Compact.
Authorized Gaming Facility. Provides that the Tribe may
establish and operate not more than two gaming facilities and
engage in Class III Gaming only on eligible Indian lands held in
trust for the Tribe, located within the boundaries of the
Tribe's reservation and trust lands as those boundaries exist as
of the execution date of this Compact, as legally described in
the Compact (Appendix A).
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 nullified by the enactment,
amendment, or repeal of a state statute or constitutional
provision or the conclusive and dispositive judicial
construction of a statute or the state Constitution by a
California appellate court after the effective date of this
Compact, that gaming devices may lawfully be operated by
non-Indian entities, the Tribe shall have the right to: (1)
terminate this Compact, in which case the Tribe will lose the
right to operate Class III gaming authorized by this Compact or
(2) continue under this Compact with entitlement to a reduction
of the rates specified below following conclusion of
negotiations, to provide for (a) compensation to the State for
the costs of regulation, as defined; (b) reasonable payments to
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local governments impacted by tribal government gaming; (c)
grants for programs designed to address gambling addiction; and,
(d) such assessments as may be permissible at such time under
federal law.
Payments to the Special Distribution Fund (SDF). Provides that
the Tribe shall pay to the State, on a pro rata basis, the costs
the State incurs for the performance of all its duties under
this Compact, the administration and implementation of
tribal-state gaming compacts, and funding for the Office of
Problem Gambling, as determined by the monies appropriated in
the annual Budget Act each fiscal year to carry out those
purposes. The Tribe's pro rata share of the State's costs in
any given year this Compact is in effect may not be increased
more than 5% per year and shall be calculated using the
following equation: "The maximum number of gaming devices
operated in the gaming facility for the previous fiscal year as
determined by the State Gaming Agency, divided by the maximum
number of gaming devices operated by all federally recognized
tribes in California pursuant to tribal-state Class-III gaming
compacts during the previous State fiscal year, multiplied by
the Appropriation, equals the Tribe's pro rata share."
The Tribe further agrees to pay an additional $1.6 million into
the SDF to ensure it remains solvent. In the event the pro rata
funding for the SDF statewide has proven sufficient for three
consecutive years, the parties agree to meet and confer for the
purpose of making an appropriate reduction in the additional
payment. The Tribe's payment into the SDF is capped at $3
million unless the Tribe's pro rata share exceeds that amount.
In the event the Tribe's pro rata share exceeds $3 million, the
Tribe's payment shall be capped at the pro rata share.
Additional Revenue Contribution. Provides that the Tribe shall
pay to the State annually a revenue contribution of $15 million
and provides that the Tribe may take an annual credit of up to
$9 million (out of the $15 million) for the Tribe's payments
covering state or local government services, mitigation of the
gaming operation's impacts, and financing infrastructure
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projects and economic development or revitalization, including,
but not limited to, construction, repair, maintenance and
improvements of structures, operations and facilities, on
non-Indian lands in counties within the Tribe's ancestral
territory (Colusa, Lake, Napa, Solano, Yolo counties) that
benefit the Tribe, its gaming operation, and/or the governments
and non-tribal communities within these counties. The Tribe may
also take $4.5 million in credits for its annual payments to
Yolo County under the parties' existing and any subsequent MOUs.
Furthermore, the Compact provides that the Tribe may take
additional credits totaling up to $6 million (out of the $15
million) for projects, initiatives or investments the parties
agree on which mitigate the impacts of gaming or provide
benefits to the State or tribes in California. The Tribe may
also deposit annually up to $2 million of that $6 million for
deposit into a scholarship fund created by the Tribe and the
State (California Native American Education and Scholarship
Fund) to provide scholarships for undergraduate, graduate and
professional education that benefit students of non-gaming or
limited-gaming tribes located in California.
Payments to the RSTF or the TNGF. Provides that the Tribe
agrees to pay $18 million annually to the California Gambling
Control Commission (CGCC) for deposit into the RSTF or the TNGF.
Credits Applied to the RSTF or the TNGF. From its payments to
the RSTF or the TNGF, the Tribe may take annual credits for up
to $9 million (out of the $18 million) for the following
purposes:
1)Payments by the Tribe to the County or local jurisdictions
operating facilities or providing services within the County
for fire, law enforcement, emergency medical services, public
transit, education, tourism, or other services and
infrastructure improvements intended to serve off-reservation
needs of County residents as well as those of the Tribe - such
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payments shall be subject to approval by a special entity
comprised of County, tribe and community representatives;
2)Payments to reimburse Yolo County for any loss of property tax
revenues;
3)Non-gaming related capital investments and expenditure and
economic development projects by the Tribe that provide mutual
benefits to the Tribe and the State because, for instance,
they have particular cultural, social or environmental value,
or because they diversify the sources of revenue for the
Tribe's general fund;
4)Payments to support operating expenses and capital
improvements for non-tribal governmental agencies or
facilities operating within the Counties of Colusa, Lake,
Napa, Sacramento, Sonoma, Solano, Sutter, or Yolo;
5)Investments in, and any funds paid to the State in connection
with, energy projects that, in part, serve the gaming
facility, the County, or the local community. Allowable
projects include projects that incorporate charging stations
for electric or other zero-emission vehicles that are
available to the Tribe's citizens, patrons and employees of
the gaming facility, or non-tribal members of the public;
6)Payments to support capital improvements and operating
expenses for facilities within California that provide health
care services to tribal citizens, Indians, and non-Indians;
7)Investments or expenditures to preserve, revitalize, or
enhance the Tribe's cultural values, practices and traditions,
as well as, payments to any non-profit institutions providing
education to Native American people, including the California
Tribal College;
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8)Payments for providing healthcare benefits, education or job
training to persons who have been dis-enrolled from an Indian
tribe in California; and,
9)Grants to Indians of Patwin or Wintun descent who are not
enrolled citizens of the Tribe, for educational, cultural or
vocational purposes, or to landless federally-recognized
tribes from northern California, or federally-recognized
tribes with Indian lands within the Counties of Colusa, Lake,
Napa, Sacramento, Sonoma, Solano, Sutter, or Yolo, for
economic development.
All excess authorized credits that cannot be applied in any one
year may be applied as an annual credit in all following years
that this Compact is in effect, up to a total of $9 million,
until completely exhausted.
ADDITIONAL COMPONENT ELEMENTS
Gaming Ordinance and Regulations. Provides that all gaming
activities conducted under this Compact shall, at a minimum,
comply with (1) a gaming ordinance duly adopted by the Tribe
and approved in accordance with IGRA, (2) all rules,
regulations, procedures, specifications, and standards duly
adopted by the National Indian Gaming Commission (NIGC), the
Tribal Gaming Agency, and the State Gaming Agency, and (3) the
provisions of this Compact, as specified.
Licensing Requirements and Procedures. Provides that all
persons in any way connected with the gaming operation or
gaming facility who are required to be licensed or to submit
to a background investigation under IGRA, and any others
required to be licensed under this Compact, including, without
limitation, all gaming employees, gaming resource suppliers,
financial sources, and any other person having a significant
influence over the gaming operation, must be licensed by the
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Tribal Gaming Agency and cannot have had any determination of
suitability denied or revoked by the CGCC. Also, every gaming
employee must obtain, and thereafter maintain current, a valid
tribal gaming license, as specified.
Minimum Internal Control Standards (MICS). Requires the Tribe
to conduct its gaming activities pursuant to an internal
control system that implements MICS that are no less stringent
than those contained in the MICS of the federal NIGC
standards, as specified. 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 Tribal Gaming Agency's authorization;
access to assets is permitted only in accordance with the
Tribal Gaming Agency's approved procedures; recorded
accountability for assets is compared with actual assets; and,
functions, duties and responsibilities are appropriately
segregated and performed by qualified personnel. The Tribe is
required to provide 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 MICS.
Patron Disputes. Provides that the Tribe (through its Tribal
Gaming Agency) must attempt to resolve patron disputes
pertaining to the play or operation of any game, including
refusal to pay to a patron any alleged winnings from any
gaming activities. A patron must make an oral or written
complaint to personnel of the gaming operation over the play
or operation of any game within seven days of the play or
operation at issue. The patron shall be given written notice
by the gaming operation that the patron has the right to
request, in writing, resolution of the complaint by the Tribal
Gaming Agency which must be made within 15 days of receipt.
If the patron is dissatisfied with the Tribal Gaming Agency's
resolution of the complaint, the patron may seek resolution in
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either the Tribe's tribal court system, or through binding
arbitration pursuant to the JAMS process. The Tribal Gaming
Agency shall conduct an investigation and shall render a
decision consistent with industry practice. The Tribal Gaming
Agency's decision shall be issued within 60 days. If still
dissatisfied, the patron may request that the dispute be
settled by binding arbitration before a single arbitrator, who
shall be a retired judge, in accordance with the streamlined
arbitration rules and procedures of JAMS. Any party
dissatisfied with the award of the arbitrator may at the
party's election invoke the JAMS Optional Arbitration Appeal
Procedure, provided that the party making such election must
bear all costs and expenses of JAMS and the arbitrators
associated with the JAMS Optional Arbitration Appeal Procedure
regardless of the outcome.
Public and Workplace Liability. Requires the Tribe to obtain
and maintain a commercial general liability insurance policy
which provides coverage of no less than $10 million. Also,
requires the Tribe to adopt a Tort Liability Ordinance
containing provisions that are the same as California tort law
to govern all claims of bodily injury, personal injury, or
property damage arising out of, connected with, or relating to
the casino. The Tribe must consent to jurisdiction in the
Tribe's tribal court system, if a tribal court system is
established, before a three-member tribal claims commission,
or by arbitration before a single arbitrator who shall be
retired judge, in accordance with the Comprehensive
Arbitration Rules and Procedures of JAMS. Any party
dissatisfied with the award of the tribal court, claims
commission, or JAMS arbitration, may at the party's election
invoke the JAMS Optional Arbitration Appeal Procedure. The
JAMS appeal will take place in the County and shall use one
arbitrator, agreed upon by the parties, and shall not be a de
novo review, but shall be based solely on the record developed
in the tribal court, claims commission, or JAMS arbitrator
proceedings. The Tribe consents to the jurisdiction of the
tribal court, claims commission, JAMS arbitration and JAMS
appeal.
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Environmental Protections. Requires the Tribe to prepare a
Tribal Environmental Impact Report (TEIR) and negotiate
mitigation of any off-reservation impacts, including an
evaluation of energy consumption, prior to initiating the
development of a Project for a facility. The Compact provides
procedures regarding the (1) Notice of Preparation of Draft
TEIR, (2) Notice of Completion of Draft TEIR, and (3) Issuance
of Final TEIR. The Tribe's failure to prepare an adequate
TEIR when required may warrant an injunction where
appropriate. Before commencement of a Project, and no later
than the issuance of the final TEIR, the Tribe shall negotiate
an intergovernmental agreement with the California Department
of transportation (Caltrans) if state roads are impacted. A
completed TEIR must be filed with the County, the Department
of Justice, the CGCC, and the State Clearinghouse. Also,
before commencement of a Project, and no later than the
issuance of the final TEIR, the Tribe shall offer to commence
negotiations with the County to, amongst other things, provide
for the timely mitigation of any significant effect on the
off-reservation environment including provisions relating to
compensation for law enforcement, fire protection, emergency
medical services and any other public services to be provided
by the County to the Tribe as a consequence of the Project.
Enhanced Audit and Compliance Review Procedures. In addition
to providing for an annual independent audit, the Compact
allows the state to conduct its own annual audit and compact
compliance review.
Inspection and Testing of Slot Machines. Provides that slot
machines will have to be tested, approved and certified by an
independent gaming test laboratory or state governmental
gaming test laboratory to ensure they are being operated
according to specified technical standards. Also, requires
the Tribal Gaming Agency to maintain adequate records that
demonstrate compliance with software and hardware
specifications. The State Gaming Agency would be authorized to
annually conduct up to four random inspections of slot
machines in operation to confirm that the slot machines are
operating in conformance with these standards.
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Compliance Enforcement. Provides that it is the
responsibility of the Tribal Gaming Agency to conduct on-site
gaming regulation and control in order to enforce the terms of
this Compact, IGRA, any applicable NIGC and State Gaming
Agency regulations, and the tribal gaming ordinance with
respect to gaming operation and facility compliance, and to
protect the integrity of the gaming activities, the reputation
of the Tribe and the gaming operation for honesty and
fairness, and the confidence of patrons that tribal government
gaming in California meets the highest standards of regulation
and internal controls. To meet those responsibilities, the
Tribal Gaming Agency shall adopt and enforce regulations,
procedures, and practices.
Labor Provisions. Provides that the gaming activities
authorized by this Compact must continue under the Tribal
Labor Relations Ordinance (TRLO) previously adopted by the
Tribe and referenced as Appendix C of this Compact. This
Compact acknowledges that the parties may amend the existing
TLRO. (UNITE-HERE has represented workers at the Cache Creek
Casino for approximately 20 years.)
Workers' Compensation. 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. In lieu of participation in the
State's system, the Tribe may create and maintain a system
through self-insurance, which includes specified provisions,
including hearings before an independent tribunal.
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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Prohibitions Regarding Minors. Provides that the Tribe shall
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.
Alcohol Provisions. Makes it explicit that the purchase,
sale, and service of alcoholic beverages shall be subject to
state law - the Alcoholic Beverage Control Act.
Tobacco Provisions. Provides that the Tribe agrees to provide
a non-smoking area in the gaming facility and to maintain
ventilation, filtration, purification or other technologies in
the gaming facility, where reasonably feasible after
consideration of engineering, economic and scientific factors,
and further agrees not to offer or sell tobacco products,
including but not limited to smokeless tobacco products or
e-cigarettes, to anyone younger than the minimum age specified
in state law to legally purchase tobacco products.
Problem Gambling. Requires the gaming operation must
establish a program, approved by the Tribal Gaming Agency, to
mitigate pathological and problem gaming by implementing
specified measures.
Health and Safety Standards. Provides that the Tribe has
agreed to adopt and comply with tribal health standards for
food and beverage handling that is no less stringent than
State public health standards. Also, the Tribe has agreed to
comply with federal water quality and safe drinking water
standards applicable in California. The Tribe must also adopt
and comply with federal and state laws forbidding harassment,
including sexual harassment, discrimination and retaliation.
Furthermore, the Tribe must maintain a $3 million insurance
policy for these purposes and adopt an ordinance that includes
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a dispute resolution process.
Building Codes and Fire Safety. Provides that in order to
assure the protection of the health and safety of all gaming
facility patrons, guests, and employees, the Tribe shall adopt
or has already adopted, and shall maintain throughout the term
of this Compact, an ordinance that requires any covered gaming
facility construction to meet or exceed the applicable codes.
Gaming facility construction, expansion, improvement,
modification or renovation must also comply with the federal
Americans with Disabilities Act.
Emergency Services Accessibility and Possession of Firearms.
Requires the Tribe to make reasonable provisions for adequate
emergency fire, medical, and related relief and disaster
services for patrons and employees. Also, prohibits the
possession of firearms by any person in the gaming facility at
all times except for federal, state, or local law enforcement
personnel, or tribal law enforcement or security personnel, as
authorized.
Effective Date. Provides that the Compact shall not be
effective unless and until all of the following have occurred:
(1) the Compact is ratified by statute in accordance with
state law and (2) notice of approval or constructive approval
is published in the Federal Register. Once effective, this
Compact shall be in full force and effect for 2) years
following the effective date.
Amendment by Agreement. Provides that the terms and
conditions of this Compact may be amended at any time by the
mutual and written agreement of both parties, provided that
each party voluntarily consents to such negotiations in
writing. Any amendments to this Compact shall be deemed to
supersede, supplant and extinguish all previous understandings
and agreements on the subject.
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ADDITIONAL BACKGROUND INFORMATION
Indian Gaming Regulatory Act (IGRA)
In 1988, Congress enacted the Indian Gaming Regulatory Act
(IGRA) to provide a statutory basis for the operation and
regulation of gaming on Indian lands. IGRA provides that an
Indian tribe may conduct gaming activity on Indian lands if the
activity "is not specifically prohibited by federal law and is
conducted within a State which does not prohibit such gaming
activity."
IGRA distinguishes between three classes of gaming (Class I,
Class II, and Class III) and provides for different forms of
regulation for each class. Class I gaming includes "social
games" for minor prizes or "traditional forms of Indian gaming."
Class II gaming is defined to include bingo and card games that
are explicitly authorized by the laws of the state, or that are
not explicitly prohibited by the laws of the state and are
played at any location in the State, so long as the card games
are played in conformity with those laws and regulations. Class
III gaming includes such things as slot machines, casino games
and banked card games such as black jack and baccarat. Class
III gaming may only be conducted under terms of a compact
negotiated between an Indian tribe and a State.
IGRA was enacted against a legal background in which Indian
tribes and individuals generally are exempt from state taxation
within their own territory. IGRA provides that with the
exception of assessments permitted under the statute, to defray
the State's costs of regulating gaming activity, IGRA shall not
be interpreted as conferring upon a State authority to impose
any tax, fee, charge, or other assessment upon an Indian tribe
to engage in Class III activity. Nor may a State refuse to
enter into negotiations based on the lack of authority to impose
such a tax, fee, charge, or other assessment.
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When a tribe requests negotiations for a Class III compact, IGRA
requires the State to negotiate with the Indian tribe in good
faith. IGRA provides a comprehensive process to prevent an
impasse in compact negotiations, which is triggered when a tribe
files suit alleging that the State has refused to negotiate or
has failed to negotiate in good faith.
Before 2000, the California Constitution prohibited Class III
gaming. In 2000, California voters approved Proposition 1A
which had been proposed by the Governor and passed by the
Legislature. Proposition 1A amended the California Constitution
to permit the State to negotiate compacts with federally
recognized Indian tribes for certain Class III gaming
activities. Because non-Indian parties were still forbidden
from operating gaming facilities, Proposition 1A granted Indian
tribes a "constitutionally protected monopoly on most types of
Class III games in California."
Rincon Decision
The U.S. Supreme Court in July 2011 refused to consider the
decision of the Ninth Circuit Court of Appeals rejecting a Class
III Tribal-State Gaming Compact negotiated by then Governor
Schwarzenegger with the Rincon Band of Luiseno Mission Indians.
The issue of this case's impact on Indian gaming throughout the
country has been a topic of great debate.
As noted, IGRA authorizes states to receive compensation for
costs related to tribal gaming such as regulation and gaming
addiction, and to offset the effects of casinos on surrounding
communities. However, states are prohibited from assessing
taxes on tribal casino revenues, so unjustified payments to a
state's General Fund are no longer permissible unless the tribes
are getting something in return for the required payments, such
as those authorized by IGRA.
Any payments to the State, above those needed to mitigate
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impacts of gaming must be in exchange for a benefit deemed
"exclusive" to the tribe.
The Rincon Band challenged the legality of California's "second
generation" compacts pursuant to which the signatory tribes
would be entitled to increase their slot machine count in return
for paying percentages of the new slot machine revenue to the
state's General Fund. 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.
Rincon refused to sign the amended compact which had already
been executed by several other tribes choosing instead to demand
that it be given the expanded gaming opportunity without making
the new financial concessions. The Ninth Circuit Court of
Appeals 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 court noted that "the State could rebut the presumption of
bad faith by demonstrating that the revenue demanded was to be
used for the public interest, public safety, criminality,
financial integrity, and adverse economic impacts on existing
activities, but the State's need for general tax revenue was
insufficient to demonstrate good faith."
Special Distribution Fund (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
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the support of state and local government agencies impacted by
tribal government gaming; (3) compensation for regulatory costs
incurred by the California Gambling Control Commission (CGCC)
and the Department of Justice (DOJ) in connection with the
implementation and administration of compacts; (4) payment of
shortfalls that may occur in the 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.
(Pursuant to compact renegotiations that took place with several
of the larger gaming tribes during the Schwarzenegger
administration, revenue from those tribes is directed into the
state General Fund, instead of the SDF.)
The law establishes a method of calculating the distribution of
appropriations from the SDF for grants to local government
agencies impacted by tribal gaming. This method includes a
requirement that the State Controller, in consultation with the
CGCC, deposit funds into County Tribal Casino Accounts and
Individual Tribal Casino Accounts based upon a process that
takes into consideration whether the county has tribes that pay,
or do not pay, into the SDF. The distribution formula "sunsets"
on January 1, 2021.
Existing law also establishes an Indian Gaming Local Community
Benefit Committee in each county in which gaming is conducted,
specifies the composition and responsibilities of that
committee, and requires that committee to make the selection of
grants from the casino accounts. Among other things, the
committee is responsible for establishing all application
policies and procedures for grants from the casino accounts.
Additionally, existing law requires the State Auditor to conduct
an audit every three years and report its findings to the
Legislature regarding the allocation and use of SDF grant
monies.
Revenue Sharing Trust Fund (RSTF)
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Existing law 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 California tribes (e.g.,
federally-recognized non-gaming tribes 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,
created gaming compacts with approximately 60 California tribes.
Non-compact tribes are considered third-party beneficiaries of
the 1999 compacts.
Tribal Nation Grant Fund (TNGF)
This particular fund (referenced in recent compacts) was created
to complement the RSTF and provides for the distribution of
funds to non-gaming tribes, upon application of such tribes for
purposes related to effective self-governance, self-determined
community, and economic development. Payments from this fund
are intended to be made to non-gaming tribes on a "need" basis,
upon application.
Prior Legislation
AB 795 (Atkins, Chapter 520, Statutes of 2015) ratified the
tribal-state gaming compact entered into between the State of
California 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 of
California and the Santa Ynez Band of Chumash Indians, executed
on August 26, 2015.
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AB 315 (Bigelow, Chapter 512, Statutes of 2015) ratified the
amended and restated tribal-state gaming compact entered into
between the State of California 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 of
California 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 of California 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 of
California and the Karuk Tribe, executed on December 4, 2013.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: No
SUPPORT: (Verified8/22/16)
Agua Caliente Band of Cahuilla Indians
Barona Band of Mission Indians
Buena Vista Rancheria of Me-Wuk Indians
California Federation of Labor
Jamul Indian Village
Pechanga Band of Luiseno Indians
Teamsters
UNITE HERE, AFL-CIO
Viejas Band of Kumeyaay Indians
Yocha Dehe Wintun Nation
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OPPOSITION: (Verified8/22/16)
None received
ASSEMBLY FLOOR: 80-0, 8/23/16
AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker,
Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke,
Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley,
Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth
Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto,
Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper,
Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim,
Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis,
Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte,
O'Donnell, Olsen, Patterson, Quirk, Ridley-Thomas, Rodriguez,
Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting,
Wagner, Waldron, Weber, Wilk, Williams, Wood, Rendon
Prepared by:Arthur Terzakis / G.O. / (916) 651-1530
8/23/16 20:19:30
**** END ****