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Legislation seeks to remedy dispute with tribes and state

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SACRAMENTO, Calif. - For two years tribes have been asking the state to show the money and now two bills in each of the houses of the California legislature are looking to do just that.

The bills seek ultimately to remove control of one of two funds from the governor-appointed Gambling Control Commission and place it under the auspices of state constitutional departments.

The bills, respectively introduced by Sen. John Burton, D-San Francisco, and Assemblyman Ed Chavez, D-La Puente, were both introduced in May and seek to iron out a system that has left tribes accusing the state of playing political football with the money.

Gov. Gray Davis has not decided whether or not he will support the bills said Davis spokeswoman Amber Pasricha.

Part of the issue is windfall money from one of two funds set up by the state/tribal gaming compacts called the Special Distribution Fund to cover shortfalls in another fund, the Revenue Sharing Trust Fund. The second fund is supposed to be distributed to tribes who either operate small casinos or those with no casino.

In addition to covering the shortfall on the Revenue Sharing Trust Fund, money from the Special Distribution Fund is also supposed to go to local governments to offset impacts from Indian gaming operations. No money has of yet been disbursed to local communities from the Special Distribution Fund.

The shortfall on the Revenue Sharing Trust Fund is significant. A recent article in the San Bernardino County Sun stated that receiving tribes would receive less than half of the promised $1.1 million that is supposed to be coming to them. The California Nations Indian Gaming Association (CNIGA) an influential Indian gaming lobbying group has said that several tribes have already factored the full amount of the payment into their tribal budgets.

According to CNIGA the state of California is sitting on about $70 million in the Special Distribution Fund at the present moment.

Tensions have been mounting since the governor-appointed Gambling Control Commission, with the backing of Gov. Davis, took control of disbursement of the Revenue Sharing Trust Fund and refused to dole out the money until they received funding. The state gaming compacts allow for the funding of special regulatory entities of tribal gaming, though CNIGA claims that the compacts do not give control over the Special Distribution Fund to the Gambling Control Commission.

While this was happening, legislative republicans accused the Commission of a political power play and threatened to attempt to de-fund the Commission.

Republican Senator Jim Battin, R- LaQuinta, blasted the Commission and accused it of "empire building" and using the Revenue Sharing Trust Fund as a bargaining chip.

Tribal interests cried foul as the Commission is also paid from the same fund and cited a conflict of interest that prompted two tribes to sue the state in federal court over alleged mishandling of the fund.

Last fall the California Nations Indian Gaming Association (CNIGA) threatened to seek an audit of the Commission because of the late payments.

The Commission fired back and accused several tribes of being in several quarters in arrears for their payments, a matter still in dispute between the tribes and the Commission.

Initial payments were finally made to tribes last October after the CNIGA threat, though tribes claim they did not receive the full amount and it is the Gambling Control Commission and not they that are in arrears of payment.

David Quintana, who works with CNIGA and personally worked on the bill from the beginning, said that the state is about half a million behind in revenue Sharing Trust Fund payments.

"It's the history of the lack of stewardship by the Gambling Control Commission (in regard to the Revenue Sharing Trust Fund) that leaves us with no confidence with their ability to handle the Special Distribution fund," said Matt Z'berg, a Chavez aide.

Z'berg said that this combined with the potential conflict of interest for the Commission handling its own payment fund is what prompted his boss to author the bill.

Quintana concurs with Z'berg. "The Gambling Control Commission has a documented history of not handling the funds very well ?"

The two bills seeking to remedy the dispute differ largely on their scope. The Senate bill seeks only to establish a formula for which the money will ultimately be distributed. Whereas the Assembly bill, co-sponsored by CNIGA, seeks to take control of disbursing the funds from the Commission and giving it instead to the California state controller and treasurer.

Burton's bill also seeks to spend $2 million of the Special Distribution Fund on a new department in the State Department of Health to treat gambling addictions. However, Burton's bill stops short of providing a formula for monetary disbursement to local communities.

The problem is that tribes do not pay equally into the fund and some of the larger tribes are pushing for payment to their local communities that is proportional to what they pay into the fund.

Chavez aide Z'berg reports that other members of the state legislature including Sen. Battin are currently drafting another bill that would seek to address that concern and create a formula that would reflect proportional payment.

For now the bills are currently in legislative committee. Chavez' bill passed out of the Senate Committee on Governmental Affairs on July 8 and will head next to the Senate Appropriations Committee. Burton's bill, meanwhile passed the Assembly Governmental Organization Committee on July 7.

If these bills make it out of the various legislative committees they will reach the legislative floor sometime later this summer.