- MEMORANDUM OF UNDERSTANDING BETWEEN THE STATE OF
- NEW YORK AND THE SENECA NATION OF INDIANS
¥ Understanding. It is the understanding of the Parties that the Indian Gaming Regulatory Act ("IGRA") bestows certain rights and duties upon the Parties to work cooperatively and to negotiate, in good faith, to create a compact that will define the parameters of the Nation's Class III gaming activities, and the respective rights of each Party with regard to such gaming. Therefore, these discussions are undertaken pursuant to federal law, and constitute government-to-government talks between two sovereigns. Nothing herein shall be binding upon either Party, unless and until the same is formally ratified according to the procedures implemented by each Party for doing so.
¥ Cultural Exchange. The Parties agree and understand that the Nation possesses its own unique social customs, traditions, laws, and history. In order to make persons working at a Class III facility established pursuant to the Compact*1 more aware of the Nation's culture, traditions, laws and history, the Nation may conduct periodic cultural seminars in a manner of its choosing for all facility employees. It shall be the policy of the Nation and the State that the employees at the facility shall attend such seminars.
¥ Term of Agreement. The initial term of this Agreement shall be 14 years, with an automatic 7-year renewal upon the expiration of the initial 14 year term, unless either Party objects in writing not less than 120-days prior to the end of the initial term. In the event either Party does object to the automatic renewal of this Agreement, the Parties agree to use their best efforts to address the objecting Party's concerns through frequent and regular good faith negotiations. In the event the objecting Party's concerns cannot be overcome within a period of 120-days from the commencement of such negotiations, either Party may submit the issue of the other Party's good faith in the renewal negotiations to binding arbitration pursuant to procedures set forth in the Compact. During the pendency of the arbitration, the existing terms of the Compact shall continue to apply. Notwithstanding the term of this Agreement, the Parties may amend, eliminate, or terminate, any part or all of this Agreement, at any time, by mutual consent. The Compact may be terminated by either Party at any time if: (i) the Indian Gaming Regulatory Act, 25 U.S.C. § 2701 et seq., is repealed; (ii) the Nation adopts a referendum revoking Nation authority to conduct Class III gaming; (iii) the State Constitution is amended to no longer permit games of chance to be played by religious, charitable, or non-profit organizations and no other provision of the Constitution is amended to permit the operation of Class III gaming; or (iv) a Party commits a material breach of this Agreement.
¥ Location of Facilities. The Parties agree that any facilities shall be located on "Indian lands" as that term is used and defined in the IGRA section 2703(4). The Parties agree that the Compact shall authorize the establishment of a Class III gaming facility at locations in Niagara County in the City of Niagara Falls and in Erie County in the City of Buffalo. In addition, the Compact will facilitate the establishment of Class III gaming on current reservation territory, should the Nation at some point in the future decide to pursue such a facility, with the precise location to be determined by the Nation at such later date.
With respect to the facility in the City of Niagara Falls, the Nation agrees that it will be located on the parcel of land designated in the attached map of downtown Niagara Falls.*2 With respect to the facility in the City of Buffalo, the Nation has not yet decided upon an appropriate parcel of land suitable for development of the facility.*3 Such parcels shall be utilized for gaming and commercial activities traditionally associated with the operation or conduct of a casino facility.
The State agrees to assist the Nation in acquiring such parcels within the limits of the Seneca Settlement Act funds that the Nation has committed to the acquisition of these parcels.*4 The State, through the Empire State Development Corporation (ESDC), further agrees that it shall transfer fee title to the Niagara Falls Convention Center and the parcel commonly known as the ''Splash Park' in fee simple to the Nation for a payment from the Nation of $1.00 in funds appropriated by the Seneca Settlement Act.*5 The Nation further agrees that it shall lease back to the State the Convention Center building for a period of 21 years for an annual lease payment of $1.00. The State, in turn, shall lease to the Nation the Convention Center building for a period of 21 years for an annual lease payment of $1.00 until such time as the Nation constructs and begins operation of a permanent Class III gaming facility in Niagara Falls, at which time the Nation agrees to pay to the State the balance, as of April 1, 2002, of the general obligation bonds pledged in connection with the Convention Center.
The State agrees that it shall support the Nation in its use of the procedure set forth in the Seneca Settlement Act, 25 U.S.C. § 1 774f (c), to acquire restricted fee status for the parcels, described supra, in the City of Buffalo and the City of Niagara Falls. For purposes of such support from the State, the State agrees that it shall assist the Nation directly with the Department of Interior, either in writing or in person, as the Parties deem appropriate and necessary, to obtain expeditious action on the Nation's applications under Section 1774f and all other necessary approvals.
The Nation agrees that it will use all but $5 million of the funds remaining from that appropriated by the Seneca Settlement Act to acquire the parcels in the City of Niagara Falls and the City of Buffalo. The Nation agrees that it shall dedicate the remaining Seneca Settlement Act funds to acquire parcels to meet the housing needs of members of the Seneca Nation. Unless otherwise agreed by the Parties, such housing parcels shall be physically and immediately contiguous and adjacent to either: (1) an existing reservation of the Nation; or (2) the parcels of land acquired in the City of Niagara Falls arid the City of Buffalo set forth above. The State agrees to support the Seneca Nation in the development of such housing projects and shall support any application made under Section 1 774f for a housing development project for Nation members.
¥ Local Impact. The Parties agree that host municipalities should be compensated to be able to adjust to the economic development expected to result from the facilities authorized under the Compact. Consistent with this goal, the State shall reach financial agreements with the host municipal governments. Such payments shall be part of the State Revenue Share as set forth below.
¥ Type of Gaming. In addition to those types of games already included in the Mohawk and Oneida gaming compacts, the Nation and the State conceptually agree that the Compact shall include electronic gaming devices, including "slot machines," as permitted Class III game. The State agrees to use its best efforts and influence to attain any necessary legislative approval for the inclusion of "slot machines" at the Nation~s gaming facilities. The Nation agrees to facilitate the State's efforts by contacting state officials and educating them on the benefits a Class III gaming establishment(s) with "slot machines" will have for their people and the Nation.
¥ Exclusivity and Revenue Share. The State and the Nation agree that in entering into an Agreement with the State to offer electronic gaming devices, including "slot machines," at its facilities, the Nation is receiving an exclusive franchise to offer a form of gaming no non-lndian person or entity has been permitted to offer. Moreover, unless any other federally recognized Indian nation with a reservation located within the State of New York as of the effective date of the Compact seeks a gaming compact with the State, the State agrees that the Nation shall enjoy total exclusivity with regard to electronic gaming devices, including "slot machines," within the geographic area defined by: ( I ) to the east, State Route 14 from Sodus Point to the Pennsylvania border with New York; (2) to the north, the border between New York and Canada; (3) to the south, the Pennsylvania border with New York; and (4) to the west, the border between New York and Canada and the border between Pennsylvania and New York. In no event shall the State permit another Indian nation to establish a class III facility within a 25 mile radius of any facility authorized under this Agreement unless the same is to be established on federally recognized Indian lands existing as of the effective date of the Compact. In the event the State were to breach this exclusivity agreement with the Nation, the Nation's revenue share obligations pursuant to this exclusivity agreement shall no longer apply.
This exclusivity agreement shall become null and void as to any one of the sites if: (i) the Nation fails to commence construction on such site within 36 months of the effective date of the Compact; or, (ii) the Nation fails to commence gaming operations on such site within 60 months of the effective date of the Compact.
In exchange and consideration for this exclusive franchise, the Nation agrees to share with the State a portion of the proceeds from electronic gaming devices, including "slot machines," based on the net drop of such machines (money dropped into machines, after payout but before expense) and totaled on a cumulative quarterly basis to be adjusted annually at the end of the fiscal year, according to the sliding scale set forth below (this being the "State Revenue Share" referred to elsewhere herein):
| Years 1 - 4*6 | Years 5 - 7 | Years 8 - 14 |
| 18%*7 | 22%*8 | 25%*9 |
In the event the State reaches a revenue sharing agreement with another Indian nation or tribe regarding electronic gaming devices of a like kind or "slot machines" with revenue sharing provisions more favorable that those set forth herein, such terms shall be automatically applicable to the Compact at the Nation's option.
¥ Nation Tort Claims Act. The Nation will establish its o~own tort claims act which will provide due process and an impartial forum for the bringing of private tort claims. The Nation agrees to carry general tort liability insurance to pay claims up to an agreed upon minimum threshold.
¥ Law Enforcement. Law enforcement at the facilities shall be pursuant to applicable law governing law enforcement jurisdiction on Indian lands.
¥ Employee Background Checks/State Report/Nation Licensing. It is in both the State's and the Nation's best interest to be able to represent to the public that every employee at the facility has been screened. The screening of criminal histories and associations of prospective employees will ensure the facility is not infiltrated by organized crime or similar undesirable criminal elements and assure the public that those operating the facility are of a certain integrity. Every employee of a Class III gaming facility established under this Compact shall be fingerprinted and undergo a BCI background investigation. Within the Standards to be agreed upon between the State and the Nation, only prospective gaming and Nation Commission employees whose background checks reveal prior felony or gambling convictions, illustrate bad associations or fail to provide certain information, withhold material facts, or furnish untrue or misleading information, will be Reported as deficient under the agreed upon employment standards. Once a prospective employee has received a positive Report, it is solely within the discretion of the Nation whether to issue the candidate a Nation employee license. Similar to the employee background process, all companies that conduct business with the Nation's gaming facilities are likewise subject to a State Report and Nation license.
¥ Felony Review Process. Applicants may seek review of a Negative Report when the basis for their Negative Report was based solely upon conviction of a felony offense. The applicant commences the review by seeking redress from the appropriate governmental entity of the Nation.
If the Nation's governmental entity determines, based upon extenuating circumstances hereinafter set forth, that the criminal offense for which the applicant was convicted will not have an affect on the applicant's fitness or ability to perform the duties or responsibilities for which the applicant seeks licensure, and that the applicant is of good moral character, the Nation's governmental entity shall forward to the Review Commission (to be established as set forth below)' a resolution requesting a de novo review of the application. The extenuating circumstances that would justify such a de novo review, all of which must be met to justify a resolution requesting de novo review, are as follows:
a. the applicant's offense does not equate greater than a class E felony;
b. the applicant has not been convicted of more than one felony offense;
c. five years have passed since the expiration of the sentence imposed for the felony conviction;
d. the applicant has not been convicted of any misdemeanor or felony offense since the expiration of the sentence imposed;
e. the felony offense for which the applicant was convicted was a non-violent offense; and,
f. if the offense for which the applicant was convicted was alcohol or drug related, the applicant has completed a program of rehabilitation or an employee assistance program.
Upon receipt of the Nation's resolution requesting review, Review Commission Members shall examine the background investigation conducted pursuant to the Compact, the New York State Division of Criminal Justice Services criminal fingerprint history, Federal Bureau of Investigation criminal fingerprint history, the Royal Canadian Mounted Police criminal fingerprint history, if applicable, and the application and supporting documentation.
The Review Commission shall consist of 3 members who are not employees of either the State or the Nation. One member shall be selected by each party and the third shall be selected by the two. All decisions rendered by the Review Commission must be consistent with the terms and conditions of the Compact and shall be final.
The Review Commission shall meet twice each year to consider resolutions for a de novo review. Each applicant who has obtained a resolution for a de novo review shall appear before the Review Commission at the first meeting of the Review Commission after completion of its own review of the information above to discuss the applicant's employment, criminal history, and any other relevant and related matters. The Review Commission shall determine the fitness or ability of the applicant to perform the duties or responsibilities applied for and whether such applicant's employment would impair public confidence and trust in the credibility and integrity of the regulation and operation of gaming under the Compact. Within 5 days of such hearing, the Review Commission shall make an appropriate recommendation to the Nation Gaming Commission regarding the applicant, which shall be binding on the Nation Gaming Commission.
¥ Regulatory Expenses. Pursuant to section 271 0(d)(3)(c)(iii) of the IGRA, the Parties agree that the State shall charge to the Nation the costs associated with the regulation of each Class III facility established under this Agreement, and the Nation agrees to reimburse the State for those costs (quarterly). The State agrees to consult with the Nation on an annual basis and to provide the Nation with a comprehensive budget estimate of the State's expected regulatory costs for the next fiscal year. These costs shall include personal services, non-personal services, and equipment, including but not limited to: the actual wages of State employees, their fringe benefits, and their necessary expenses when performing their duties under this Agreement. The Nation's agreement to reimburse the State's regulatory costs is separate and apart from any other agreements for payments made herein. The Nation shall have the right to object to billed State regulatory expense pursuant to mutually agreed procedures contained within the Compact.
¥ Ratification. Because of the uncertainties caused by the case Saratoga Chamber of Commerce v. Pataki, and further because both Parties desire an expedited time line for development with as much certainty as possible, it is mutually agreed that the Parties will jointly seek timely (1) legislative authorization for the Governor to execute a Tribal-State Compact with the Seneca Nation consistent with this Memorandum of Understanding; and, (2) ratification of the Compact by the enrolled members of the Nation and the United States Department of the Interior.
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1. Compact shall mean the Nation-State Compact to be negotiated between the State and the Nation pursuant to the terms agreed herein.
2 In the event the specified Niagara Falls site is not available for any reason, the Nation would propose an alternate site.
3 In the event a site in the City of Buffalo site is not available for any reason, the Nation would propose an alternate site.
4. The Seneca Settlement Act appropriated a total of $30 million to further specific objectives of the Nation and its members.
5 The State's obligation to transfer title to the "Splash Park" is contingent on its legal ability to do so. Should it be unable to transfer the title, the State agrees to assist the Nation in whatever manner appropriate to obtain the "Splash Park;" in the best economic terms possible.
6 For purposes of this provision, Year I shall begin on the date on which the first facility established pursuant to this Agreement begins operation.
7 Payments during this initial period to be made on an annual basis.
8 Payments during this period to be made on a semi-annual basis.
9 Payments during this period to be made on a quarterly basis.
