BILL ANALYSIS �
AB 1417
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 1417 (Hall)
As Amended August 31, 2011
Majority vote
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|ASSEMBLY: |75-0 |(May 26, 2011) |SENATE: |35-0 |(September 7, 2011) |
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|COMMITTEE VOTE: |16-0 |(September 9, 2011) |RECOMMENDATION: |concur |
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Original Committee Reference: G.O.
SUMMARY : Appropriates $9.1 million from the Indian Gaming Special
Distribution Fund (SDF) to the California Gambling Control
Commission (CGCC) to provide grants to local agencies for the
purpose of mitigating the adverse impacts of tribal gaming.
The Senate amendments delete the Assembly version of the bill, and
instead appropriate $9,100,000 from the SDF to the CGCC to provide
grants to local agencies, as specified.
EXISTING LAW :
1)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: a) grants for programs designed to address gambling
addiction; b) grants for the support of state and local
government agencies impacted by tribal government gaming; c)
compensation for regulatory costs incurred by the CGCC and the
Department of Justice (DOJ) in connection with the implementation
and administration of compacts; d) payment of shortfalls that may
occur in the Indian Gaming Revenue Sharing Trust Fund (RSTF); e)
disbursements for the purpose of implementing the terms of tribal
labor relations ordinances promulgated in accordance with the
terms of the 1999 compacts; and, f) any other purpose specified
by law.
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2)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 not
pay, into the SDF. The distribution formula "sunsets" on January
1, 2021.
3)3) 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.
4)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.
5)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.
AS PASSED BY THE ASSEMBLY , this bill reorganized statutes
pertaining to Indian gaming compacts primarily by moving
them to a newly created Title 16.5 on Tribal Gaming in the
Government Code. This bill also made other technical,
non-substantive changes.
FISCAL EFFECT : According to the Senate Appropriations Committee,
appropriates $9.1 million from the SDF (Special fund) to the CGCC
to provide grants to local agencies for the purpose of mitigating
the adverse impacts of tribal gaming.
COMMENTS : This bill was substantially amended in the Senate and
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the Assembly-approved provisions of this bill were deleted.
Purpose of the bill : According to the author, this bill ensures a
statewide appropriation of $9.1 million from the Indian Gaming
Special Distribution Fund (SDF) for local mitigation monies for
fiscal year 2011-2012. The author points out, under current law
this appropriation is made via a Special Fund (SDF) not the General
Fund.
As a function of the original 1999 tribal-state compacts, these
local mitigation funds are important to many local communities and
counties throughout the state, as they support critically important
allowable purposes such as public safety, fire and transportation.
In this lean budgetary year, local governments are depending on
this money to mitigate the costs associated with having casinos
within their jurisdictions.
This $9.1 million appropriation represents a reasonable request to
provide local mitigation funds to communities surrounding the 21
tribes who still pay into the SDF as provided by the existing 1999
compacts - as well as other many other communities throughout the
state pursuant the longstanding statutory allocation formula.
Indian Gaming Special Distribution Fund (SDF) : The Indian Gaming
Special Distribution Fund (SDF) was created by the 1999 Tribal
State Compacts and is currently financed by 21 tribal governments
that operated more than 200 gaming devices as of September 1, 1999.
The California Government Code specifies that the money deposited
into the SDF is available for appropriation by the Legislature to
address four needs, prioritized as follows: 1) Supporting the RSTF
to ensure that it can distribute $1.1 million annually to each
tribe that does not have a compact or that has a compact and
operates fewer than 350 devices; 2) Funding problem-gambling
prevention programs managed by the Department of Alcohol and Drug
Programs; 3) Paying the operating costs for the Indian gaming
regulatory functions of the CGCC and the Department of Justice
(DOJ); and, 4) Supporting local governments impacted by tribal
gambling.
SDF contributing tribes : 1) Barona Band of Mission Indians; 2) Big
Sandy Band of Mono Indians; 3) Big Valley Rancheria; 4) Bishop
Paiute Tribe; 5) Cabazon Band of Mission Indians; 6) Cahuilla Band
of Indians; 7) Chicken Ranch Rancheria; 8) Colusa Indian
Community; 9) Hopland Band of Pomo Indians; 10) Jackson Rancheria
Band of Miwuk Indians; 11) Mooretown Rancheria; 12) Redding
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Rancheria; 13) Robinson Rancheria; 14) Santa Rosa Rancheria; 15)
Santa Ynez Band of Chumash Indians; 16) Soboba Band of Luiseno
Indians; 17) Sycuan Band of Kumeyaay Indians; 18) Table Mountain
Rancheria; 19) Tule River Indian Tribe; 20) Twenty-Nine Palms Band
of Mission Indians; and, 21) Tyme Maidu Tribe Berry Creek
Rancheria.
Local Benefit Committees : Existing law establishes Indian Gaming
Local Community Benefit Committees with specified local government
and tribal representation that are responsible for establishing SDF
grant application policies and procedures, determining grant
eligibility, and selecting grants from Individual Tribal
Casino Accounts or County Tribal Casino Accounts based on "nexus
test criteria" that mainly takes into consideration the
geographical proximity of an applicant local government
jurisdiction to the tribal casino.
All grants from Individual Tribal Casino Accounts are required to
be made only upon the affirmative sponsorship of the tribe paying
into the SDF from whose Individual Tribal Casino Account grants are
available for distribution. Priority uses for the receipt of grant
money from Individual Tribal Casino Accounts are as follows: law
enforcement; fire services; emergency medical services;
environmental impacts; water supplies; waste disposal; behavioral;
health; planning and adjacent land use; public health; roads;
recreation and youth programs; and, childcare programs.
SDF budget actions : Appropriations have been made from the SDF for
local community grants in prior years as follows: $25 million in
2003-04; $30 million in 2004-05, 2005-06, 2006-07, 2007-08,
2008-09, and 2010-11. In 2010, SB 856 (Senate Budget and Fiscal
Review Committee), appropriated $30 million from the SDF to restore
$30 million in funding vetoed by the Governor in the 2007-08 Budget
Act. The bill required the funds be divided amongst the locals
based on the amounts paid into the SDF in the 2006-07 fiscal year.
Government Code Section 12713 provides that the Department of
Finance, in consultation with the GCCC, shall calculate the total
revenue in the Indian Gaming Special Distribution Fund that will be
available for the current budget year for local government agencies
impacted by tribal gaming. The Department of Finance then includes
the information in the May Revision of the state budget. The
projected balance of the SDF as of June 30, 2012 is estimated to be
$43.7 million and due to the structural imbalance with expenditures
exceeding revenues, the fund is expected to have a negative balance
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by FY 2013-14. Therefore, no money was appropriated in the May
Revision for local government mitigation grants this year. In
addition, under current law, the General Fund is obligated to cover
the RSTF annual shortfall if the SDF cannot.
Bureau of State Audits (BSA) : In July 2007, the Bureau of State
Audits reported instances where the grant funds provided to local
governments to mitigate the effects of gaming were used
inappropriately or for entirely unrelated purposes.
In February of 2011, BSA conducted a follow-up audit and found that
local benefit committees still have trouble complying with the
distribution requirements. The audit found that in 2008-09, of the
$30 million appropriated by the Legislature for local mitigation
grants, local governments could not provide evidence that $3.2
million in grant funding was used to mitigate the impact of a
casino. The auditor further concluded that nearly 25% of the
benefit committee members in the seven counties reviewed failed to
provide a statement of economic interest.
Legislative Analyst's concerns : The Legislative Analyst Office, in
its review of the 2009-10 budget, concluded that local grants have
outlived their usefulness due to the major changes in the revenue
stream to the SDF. As a result of several compact renegotiations
by the previous administration, many tribes no longer contribute to
the SDF. These tribes instead have separate obligations under
their new compacts to enter into enforceable agreements with local
jurisdictions to mitigate the effects of their casinos on nearby
counties. It is the LAO's conclusion, therefore, that the current
allocation formula is inappropriate and outdated.
Prior legislation : SB 856 (Budget and Fiscal Review Committee),
Chapter 719, Statutes of 2010. Among other things, appropriated
$30 million from the SDF to restore funding deleted from the Budget
Act of 2007 for grants to mitigate the impact of tribal gaming on
local governments.
AB 158 (Torrico), Chapter 754, Statutes of 2008. Enacted several
recommendations proposed by the California State Auditor relative
to the allocation and uses of proceeds from the SDF.
SB 288 (Battin), Chapter 13, Statutes of 2006. Appropriated $20
million from the SDF for grants to local jurisdictions impacted by
tribal gaming. Also made a statement of intent that this
appropriation be used for workload associated with specified Indian
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gaming compacts.
SB 621 (Battin), Chapter 858, Statutes of 2003. Among other
things, established, until 1/1/2009, priorities and procedures for
specified funding to local governments from the SDF for mitigating
impacts from tribal casinos. Also, appropriated $25 million from
the SDF to mitigate the impact of tribal gaming on local
governments.
AB 673 (J. Horton), Chapter 210, Statutes of 2003. Specified that
money in the SDF may be used to make payment of shortfalls that may
occur in the RSTF and specified that payment for those shortfalls
in the RSTF shall be the priority use of moneys in the SDF. Also,
established a mechanism by which funds may be transferred
from the SDF to the RSTF pursuant to specified provisions of the
tribal-state compacts and appropriated the sum of $50,568,787.99
for the purpose of making payments to eligible Indian tribes for
the preceding fiscal year. In addition, established and provided
for the funding of the Office of Problem and Pathological Gambling
in the Department of Alcohol and Drug Programs.
AB 1385 (Battin), Chapter 874, Statutes of 1999. Among other
things, ratified 57 tribal-state gaming compacts and created two
special funds in the State Treasury (SDF and RSTF) for the deposit
of revenues derived from Indian gaming and gaming device licensing
fees. Also, 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.
Analysis Prepared by : Eric Johnson / G. O. / (916) 319-2531
FN: 0002890