BILL ANALYSIS �
------------------------------------------------------------
|SENATE RULES COMMITTEE | AB 517|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
------------------------------------------------------------
THIRD READING
Bill No: AB 517
Author: Hall (D)
Amended: 4/26/12 in Senate
Vote: 27 - Urgency
PRIOR VOTES NOT RELEVANT
Note: The bill was amended on the Senate Floor on April
26, 2012. The subject of the compact was heard in
the Senate Governmental Organization Committee on May
1, 2012.
SUBJECT : Tribal gaming compact
SOURCE : Federated Indians of Graton Rancheria
DIGEST : This bill ratifies the tribal-state gaming
compact entered into between the State of California and
the Federated Indians of Graton Rancheria (the Tribe),
executed on March 27, 2012.
Senate Floor Amendments of 4/26/12 delete the provisions
version of this bill relating to alcoholic beverages and
instead add language ratifying the tribal-state gaming
compact entered into between the State of California and
the Tribe, executed on March 27, 2012. These amendments
also provide that in deference to tribal sovereignty,
certain actions may not be deemed projects for purposes of
the California Environmental Quality Act (CEQA).
Additionally, these amendments stipulate that none of the
CONTINUED
AB 517
Page
2
provisions shall be construed to exempt a city, county, or
city and county, or the Department of Transportation from
the requirements of CEQA. Furthermore, these amendments
add an urgency clause so that these provisions go into
immediate effect.
ANALYSIS : Existing law expressly ratifies a number of
tribal-state gaming compacts between the State of
California and specified Indian tribes. Additionally,
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 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 United States
Department of the Interior (DOI).
3. 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.
4. 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 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.
5. 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
CONTINUED
AB 517
Page
3
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.
6. Authorizes the Governor, under the California
Constitution, to negotiate and conclude compacts,
subject to ratification by the Legislature.
Comments
Brief History . The Tribe is a federally recognized Indian
tribe comprised of nearly 1,300 members of coast Miwok and
Southern Pomo descent.
In 1966, the federal government terminated its relationship
with the Tribe pursuant to the California Rancheria Act of
1958 and transferred title to the lands known as the Graton
Rancheria into private ownership. In 2000, Congress
restored federal recognition to the Tribe under the Graton
Rancheria Restoration Act which required the Secretary of
the DOI to take land identified by the Tribe and located in
Marin or Sonoma Counties into trust as the Tribe's
reservation. In 2003, the Tribe entered into an agreement
with Station Casinos, Inc. to acquire land on property
located on Highway 37 in southern Sonoma County (County)
for its reservation and announced plans to develop a resort
hotel and gaming facility on a portion of the Highway 37
property once in trust and deemed eligible for gaming.
At the urging of community representatives and
environmentalists, the Tribe reconsidered its plans for the
Highway 37 property and thereafter donated its rights to a
large portion of the Highway 37 property to the Sonoma Land
Trust for perpetual preservation. After consultation with
the County and the City of Rohnert Park (City) the Tribe
acquired rights to purchase alternative property located on
Stony Point Road just outside the City's urban growth
boundary for its reservation and proposed project.
In August 2005, the Tribe abandoned its plans for the Stony
Point Road property and once again moved its proposed
CONTINUED
AB 517
Page
4
location in order to address local land use and
environmental concerns and thereafter, purchased
approximately 254 acres of land for its reservation, a
portion of which will be used for its proposed project.
The Tribe agreed to wait until the environmental review of
the proposed gaming facility was completed before
exercising its right under the Graton Rancheria Restoration
Act to have the 254 acre parcel placed into trust.
The National Indian Gaming Commission (NIGC) conducted four
public hearings and provided over 160 days for public
comment in preparing an environmental impact statement with
respect to construction and operation of the Tribe's
project on the 254 acre parcel pursuant to the National
Environmental Policy Act, including an analysis of eight
different project alternatives, and a Notice of
Availability of a Final Environmental Impact Statement
which was published in the Federal Register on February 19,
2009.
In October 2010, the federal NIGC issued its Record of
Decision for the Tribe's project, concluding that the 254
acre parcel is eligible for gaming under IGRA and adopting
a reduced intensity casino and hotel project as the
preferred action alternative that is significantly smaller
than the project initially proposed by the Tribe. In
October 2010, the Bureau of Indian Affairs of the DOI
accepted the 254 acre parcel into trust on behalf of the
tribe. On March 27, 2012, Governor Brown signed a gaming
compact with the Tribe to conduct class III gaming.
Key Compact Provisions
1. Limits the Tribe to the operation of 3,000 slot machines
at one class III gaming facility, to be located on
the Tribe's Reservation, and the compact will be in full
force and effect until December 31, 2033.
2. Requires payments into the Special Distribution Fund, by
the Tribe, of $1.4 million per year during the first
seven years of the compact and 3% of the net win from
all gaming devices thereafter, to reimburse the State
for the costs of regulating gaming activities and to
provide programs for the education and treatment of
CONTINUED
AB 517
Page
5
problem gamblers.
3. Requires payments by the Tribe to the Revenue Sharing
Trust Fund (RSTF) to fund the tribal governmental
programs of non-gaming and limited-gaming tribes. If
the Tribe operates the maximum number of gaming devices
authorized under the compact, the Tribe would pay the
following amounts to fund such programs: (a) $8.9
million (at 3,000 slots) annually for years 1-7 and (b)
$12.1 million (at 3,000 slots) annually for years 8-20.
4. Establishes the "Graton Mitigation Fund" for the purpose
of mitigating the impact of the Tribe's gaming operation
on the local community and requires that the Tribe pay
15% of net win, subject to certain deductions during the
first seven years of the compact and 12% thereafter.
5. Revenues from the Graton Mitigation Fund will be
distributed on a quarterly basis to the City and the
County in amounts ranging from at least an estimated $10
million per year (in years 1-7) to an estimated $36
million per year or more in the later years of the
compact, with the remainder being paid to the RSTF or a
new fund, the Tribal Nation Grant Fund, to provide
grants to assist California tribes for purposes related
to effective self-governance, self-determined community,
and economic development.
According to the Senate Governmental Organization
Committee's staff, in light of the extraordinary
pre-development debt (estimated to be approximately $225
million) accrued by the Tribe, this compact has been
crafted in a manner which allows the Tribe to pay off its
debt during the first seven years. The authorized
deductions, which are detailed, in the compact, dissipate
after year seven.
Additional provisions of the compact include:
1. Patron protections - the Tribe agrees to binding
arbitration before a single arbitrator, who shall be a
retired judge, for disputes over patron injuries and
gambling.
CONTINUED
AB 517
Page
6
2. Environmental protections - the Tribe must prepare a
Tribal Environmental Impact Report and negotiate
mitigation of any off-reservation impacts.
3. Employee protections - the Tribe has granted employees
the right to collectively bargain. The Tribe has agreed
to participate in the state's worker's compensation
system and unemployment insurance program, to comply
with federal and state occupational health and safety
standards, and to consent to the jurisdiction of the
state agencies and courts enforcing all of those
standards. The Tribe also has agreed to enhanced
employment discrimination provisions.
4. 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.
5. Inspection of slot machines - slot machines will have to
be tested, approved and certified by an independent
gaming test laboratory and the tribal gaming agency to
ensure that they are being operated according to
specified technical standards. 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.
6. Minimum internal control standards (MICS) - the Tribe
must adopt and comply with standards that meet or exceed
the federal NIGC standards. The MICS are incorporated
into the compact as an appendix, which shall be updated
periodically by the State Gaming Agency and Tribal
Gaming Agency, to ensure the MICS keep up with changing
technology and industry standards.
7. Building and Safety Standards - the casino must meet or
exceed the applicable Building and Public Safety Codes.
8. Problem Gambling - the Tribe must train supervisors and
floor employees on identifying and managing problem
gambling, include a responsible gaming message in
advertising, provide signage and education materials at
CONTINUED
AB 517
Page
7
conspicuous locations aimed at preventing problem
gambling, and adopt a code of conduct derived from the
American Gaming Association's code.
9. Labor Provisions - if Tribe employs 250 or more persons
in a tribal casino facility, then the provisions of the
Tribal Labor Relations Ordinance become effective. The
Ordinance provides for a secret ballot election.
Local Agreements
1. The Tribe and its general contractor have entered into a
project labor agreement with the Trades Council.
2. The Tribe entered into a card-check neutrality agreement
in August 2003.
3. The Tribe entered into a Memorandum of Understanding
(MOU) with the City in October 2003 to provide the City
with approximately $200 million over 20 years to
mitigate project impacts.
4. The Tribe entered into a MOU with the County in November
2004 establishing an enforceable framework for the
negotiation of a comprehensive mitigation agreement.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 5/4/12)
Federated Indians of Graton Rancheria (source)
California Labor Federation
North Bay Labor Council
California State Association of Counties
California Teamsters Public Affairs Council
Operating Engineers Local Union 3
State Building and Construction Trades Council
UNITE HERE
United Association of Journeymen and Apprentices of the
Plumbing and Pipe Fitting Industry
OPPOSITION : (Verified 5/1/12)
CONTINUED
AB 517
Page
8
Pinoleville Pomo Nation
Robinson Rancheria, Lake County
Sonoma County Republican Party
Stop the Casino 101 Coalition
ARGUMENTS IN SUPPORT : According to the Tribe, the
proposed gaming facility enjoys significant local support,
including some 7,000 local residents who have signed on to
support the Tribe and its proposed gaming facility. The
Tribe also reports that it has agreed to mitigate potential
impacts of the gaming facility by entering into legally
binding agreements with the City, the County, the trades
council and the hotel/restaurant union. Additionally, the
Tribe reports that it has made significant contributions to
restore environmental habitat and watersheds in order to
improve public safety and to promote educational
opportunities. Specifically, with respect to:
Education - The Tribe contributed $2.653 million to
Sonoma State University, College of Marin, Santa Rosa
Junior College and Rancho Cotati High School.
Public Safety - The Tribe made over $2.7 million in
advance payments under the Rohnert Park MOU to the
Rohnert Park Public Safety Department for funding a
special enforcement unit to combat gangs and other
criminal activity.
Environment - The Tribe assigned its $4.171 million
purchase option to the Sonoma Land for 1.679 acres along
Highway 37 and San Pablo Bay in southern Sonoma County
in November 2003, followed by a $75,000 contribution to
the Sonoma Land Trust to establish a successful
fundraising drive for the purchase of the 1,679 acres
and other remaining open space along Highway 37. The
Tribe also intends to donate a contiguous 321 acre
parcel for conservation purposes. The Tribe also
reports that it contributed $115,200 to the Laguna de
Santa Rosa Foundation to establish the Laguna Learning
Center and for other purposes. Furthermore, the Tribe
states that it is currently contributing $500,000 toward
the development of the master plan and environmental
assessment for Tolay Lake Regional Park pursuant to an
agreement with the County of Sonoma.
CONTINUED
AB 517
Page
9
Writing in support of the compact, the State Building and
Construction Trades Council and the North Bay Labor Council
emphasize that the proposed gaming facility will create 900
badly needed construction jobs with healthcare and other
significant benefits and 3,000 additional full and
part-time jobs at surrounding businesses. Additionally,
these proponents claim that the proposed gaming facility
will bring an estimated $275 million in annual economic
benefits to the region.
ARGUMENTS IN OPPOSITION : The Robinson Rancheria Citizens
Business Council (RRCBC), the governing body of the
Robinson Rancheria in Lake County, has also expressed
opposition to this compact despite its support for "the
general proposition that the government of every federally
recognized tribe has the right under IGRA to utilize gaming
to attain economic self-sufficiency." The RRCBC contends
that the "Compact was obtained through deception and
misrepresentation and would seriously threaten the
continued economic viability of not only the RRCBC's modest
gaming operation, but also those of the governments of
other tribes in Sonoma, Mendocino, Lake and Colusa
Counties, as well as having significant negative impacts on
tribal governments in Solano, Yolo and Placer Counties by
effectively interdicting the customers from the Santa Rosa
and greater S.F. Bay areas on which those tribes depend for
their survival." The RRCBC believes that ratification of
this compact is tantamount "to rewarding duplicity and,
punishing those tribes that have struggled to survive on
their own lands in an increasingly difficult economic
environment."
The Stop the Casino 101 Coalition believe the compact is
flawed in major areas of air quality, endangered species,
current and future impacts, flooding, vehicular,
pedestrians and traffic issues, and water quality and water
quantity issues and they believe it will lead to new urban
casinos.
DLW:kc 5/7/12 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
CONTINUED
AB 517
Page
10
**** END ****
CONTINUED