BILL ANALYSIS Ó
SENATE COMMITTEE ON
BUSINESS, PROFESSIONS AND ECONOMIC DEVELOPMENT
Senator Jerry Hill, Chair
2015 - 2016 Regular
Bill No: SB 469 Hearing Date: April 27,
2015
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|Author: |Hill |
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|Version: |April 22, 2015 |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant|Sarah Mason |
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Subject: State Athletic Commission.
SUMMARY: Extends the operation of the California State Athletic
Commission until January 1, 2020. Makes changes to the laws
governing the Commission's operations and the Commission's
oversight of professional and amateur boxing, professional and
amateur kickboxing, all forms and combinations of full contact
martial arts contests, including mixed martial arts and matches
or exhibitions conducted, held or given in California.
Existing federal law: The Muhammad Ali Boxing Reform Act
(Federal Boxing Act) prohibits events from taking place in a
state without a regulatory commission unless the fight is
regulated by either another state's commission or on sovereign
tribal land.
(Title 15 U.S.C. § 6303)
Existing state law:
1)The Boxing Act, or State Athletic Commission Act (State Act),
provides for the licensing and regulation of boxers,
kickboxers, martial arts athletes and events held in
California by the California State Athletic Commission
(Commission) within the Department of Consumer Affairs (DCA)
and makes the Commission inoperative and repealed on January
1, 2016. (Business and Professions Code (BPC) § 18600 et
seq.)
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2)Until January 1, 2016, establishes the Commission, comprised
of seven members, five members appointed by the Governor and
subject to confirmation by the Senate Committee on Rules
confirmation, one member appointed by the Senate Committee on
Rules and one member appointed by the Speaker of the Assembly.
Specifies that efforts should be made to ensure at least four
members have experience in either medicine as a licensed
physician or surgeon specializing in neurology, neurosurgery,
head trauma or sports medicine, financial management, public
safety, and the sports regulated by the Commission. Renders
the Commission subject to review by the appropriate policy
committees of the Legislature. Authorizes the Commission to
appoint a person exempt from civil service as Executive
Officer (EO). (BPC §§ 18602 and 18613)
3)Provides the Commission with sole direction, management,
control of, and jurisdiction over all professional and amateur
boxing, professional and amateur kickboxing, all forms and
combinations of forms of full contact martial arts contests,
including mixed martial arts, and matches or exhibitions
conducted, held, or given within this state. Provides that no
event shall take place without the prior approval of the
Commission and that no person shall engage in the promotion
of, or participate in, a boxing or martial arts contest,
match, or exhibition without a license, and except in
accordance with the State Act. (BPC § 18640)
4)Defines "club" and "promoter" as a corporation, partnership,
association, individual or other organization which conducts,
holds or gives a boxing or martial arts contest, match or
exhibition. (BPC § 18622)
5)Defines "manager" as any person who does any of the following:
a) By contract, agreement, or other arrangement with any
person, undertakes or has undertaken to represent in any
way the interest of any professional boxer, or martial arts
fighter in procuring, or with respect to the arrangement or
conduct of, any professional contest in which the boxer or
fighter is to participate as a contestant. Clarifies that
the term "manager" shall not be construed to mean any
attorney licensed to practice in this state whose
participation in these activities is restricted to
representing the legal interests of a professional boxer or
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fighter as a client.
b) Directs or controls the professional boxing or martial
arts activities of any professional boxer or martial arts
fighter.
c) Receives or is entitled to receive more than 10 percent
of the gross purse of any professional boxer or martial
arts fighter for any services relating to such person's
participation in a professional contest.
d) Is an officer, director, shareholder, or member of any
corporation or organization which receives, or is entitled
to receive more than 10 percent of the gross purse of any
professional boxer or martial arts fighter for any services
relating to the person's participation in a professional
contest. (BPC § 18628)
1)Requires a manager of a boxer or martial arts fighter to
maintain an accurate record, including documentation, showing
training expenses, the amount of money actually paid to the
contestant, the amount of money which the manager received
from the purse and the amount of money owed to the manager by
the contestant. Requires records to be made available to both
the fighter under contract and the Commission upon request and
requires records to be kept in the manager's possession for a
period of five years from the transaction. (BPC § 18852)
2)Establishes Commission oversight for contracts between boxers
and managers and between boxers or managers and licensed
clubs, including that contracts must be executed on printed
forms approved by the Commission, authorizes the Commission to
recognize or enforce a contract not on its printed form if
entered into in another jurisdiction and provides that no
other contract or agreement may be recognized or enforced by
the Commission. Requires the original contract entered into
between managers and boxers and promoters and boxers to be
placed on file with the Commission at the time it is approved.
Provides that all disputes between the parties to the
contract, including the validity of the contract, shall be
arbitrated pursuant to the provisions of the contract. (Title
4 California Code of Regulations (CCR) §§ 220 and 230)
3)Establishes an Advisory Committee on Medical and Safety
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Standards (MAC) consisting of six licensed physicians
appointed by the Commission which meets for the purpose of
studying and recommending medical and safety standards for the
conduct of boxing, wrestling, and martial arts contests.
Requires a majority vote of the Commission to appoint a person
to the MAC. Provides that each appointment to the MAC shall
be at the pleasure of the Commission for a term not to exceed
four years. (BPC § 18645)
4)Provides the Commission with enforcement authority to revoke
or suspend licenses or a violation of the State Act.
Authorizes the Commission to suspend temporarily, any license
until final determination by the Commission when, in the EO's
opinion, the action is necessary to protect the public welfare
or is in the best interest of boxing or martial arts.
Provides that a suspension may be without advance hearing, but
the suspended licensee may apply to the Commission for a
hearing on the matter to determine if the suspension should be
modified or set aside. Requires an application for a hearing
to be in writing and received by the Commission within
30 days after the date of suspension. Requires the Commission,
upon receipt of such written request, to set the matter for
hearing within 30 days. (BPC §§ 18841 and 18842)
5)Authorizes the Commission, EO or his or her duly authorized
representative to assess fines, not to exceed $2,500, for each
violation of any of the provisions of the State Act or any of
the rules and regulations of the Commission (contained within
Title 4 CCR §200-829). States that the fine may be assessed
without advance hearing, but the licensee may apply to the
Commission for a hearing on the matter if such fine should be
modified or set aside in the manner outlined above.
(BPC § 18843)
6)Provides that if a licensee fails to pay any fine assessed
under this chapter within
30 days after receipt of notice by the EO, after time for appeal
has passed or after action on an appeal by the Commission, the
Commission may, without hearing, revoke or suspend the license
held by the licensee and authorize the Attorney General (AG)
to bring an action in superior court to collect the amount due
and attorney's fees. Provides that the action shall be
speedily determined by the court and shall take precedence
over all matters pending therein except criminal cases,
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applications for injunction, or other matters to which special
precedence has been given by law. (BPC § 18844)
7) Provides that the administration or use of any drugs,
alcohol, or stimulants, or injections in any part of the body,
either before or during a match, to or by any boxer is
prohibited. (Title 4 CCR § 303)
This bill:
1) Extends the operation of the Commission until January 1,
2020.
2) Codifies the Commission's authority to conduct drug testing
necessary to promote the health and safety of licensees by
providing that the administration or use of any drugs,
alcohol or stimulants or injections in any part of the body
or the use of any prohibited substance specified in the
Prohibited List of the World Anti-Doping Code, as promulgated
by the World Anti-Doping Agency, by a professional or amateur
boxer or martial arts fighter licensed by the Commission, is
prohibited.
3) Authorizes the Commission, in its discretion and through the
rulemaking process, to determine the necessity of exemptions
to the prohibition on prohibited substances for certain
licensees.
4) Authorizes the Commission to conduct drug testing at any time
during the period of licensure for a professional or amateur
boxer or martial arts fighter licensed by the Commission.
5) Authorizes the Commission to collect blood and urine
specimens from a professional or amateur boxer or martial
arts fighter licensed by the Commission in order to detect
the presence of any prohibited substances. Requires
collection of specimens to be done in the presence of
authorized Commission personnel.
6) Authorizes the Commission to assess a fine equal to ____
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percent of the purse for a violation of the prohibited
substances provisions outlined above.
7) Clarifies that a majority of the appointed members of the MAC
constitute a quorum for the purposes of meeting.
8) Codifies the Commission's existing authority to recognize and
enforce contracts between boxers and managers and between
boxers and licensed clubs and extends those provisions to
include martial arts fighters. Clarifies that all disputes
between the parties to the contract, including the validity
of the contract, shall be arbitrated by the Commission
pursuant to the provisions of the contract. Authorizes the
Commission to seek cost recovery related to arbitration
proceedings.
FISCAL EFFECT: Unknown. This bill is keyed "fiscal" by
Legislative Counsel.
COMMENTS:
1. Purpose. This bill is sponsored by the Author . This bill is
one of five "sunset bills" the Author is sponsoring this
session. According to the Author, this bill is necessary to
extend the sunset date of the Commission in order to ensure
the protection, health, welfare and safety of the athletes
and fighters licensed by the Commission who participate in
sports and events the Commission oversees. According to the
Author, Federal Law, the Muhammad Ali Boxing Reform Act
(Boxing Act) prohibits events from taking place in a state
without a regulatory commission unless the fight is regulated
by either another state's commission or on sovereign tribal
land. Regulated events result in higher levels of protection
for fighters than unauthorized or illegal events, in addition
to added revenue for the state and a boon to the local
economy where events take place.
2. Oversight Hearings and Sunset Review of Licensing Boards and
Programs. In 2015, the Senate Business, Professions and
Economic Development Committee and the Assembly Business and
Professions Committee (Committees) conducted joint oversight
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hearings to review 12 regulatory entities: California
Accountancy Board; California Architects Board and Landscape
Architects Committee; California State Athletic Commission;
Board of Barbering and Cosmetology; Cemetery and Funeral
Bureau; Contractors State License Board; Dental Board of
California; Board for Professional Engineers, Land Surveyors
and Geologists; Board of Registered Nursing; Bureau of
Security and Investigative Services and; Board of Vocational
Nursing and Psychiatric Technicians.
The Committees began their review of the aforementioned
licensing agencies in March and conducted two days of Sunset
Review Oversight Hearings. This bill, and the accompanying
sunset bills, are intended to implement legislative changes
as recommended by staff of the Committees and which are
reflected in the Background Papers prepared by Committee
staff for each agency and program reviewed by the Committees
for this year.
3. Background. Concerned with athlete injuries and death, the
public established the Commission by initiative in 1924. The
Commission is responsible for protecting the health and
safety of its licensees: boxers, kickboxers, and other
martial arts athletes. The Commission, now comprised of
seven members, is also responsible for implementation and
enforcement of the Federal Muhammad Ali Boxing Reform Act
(Federal Boxing Act) and the California Boxing Act or State
Athletic Commission Act (State Act). It provides direction,
management, and control for professional and amateur boxing,
professional and amateur kickboxing, and all forms and
combinations of full contact martial arts contests, including
mixed martial arts (MMA) and matches or exhibitions
conducted, held or given in California. The Commission has
four main functions: licensing, enforcement, regulating
events and administering the Professional Boxers' Pension
Fund (Pension Fund).
Specifically, the Commission establishes requirements for
licensure, issues and renews licenses, approves and regulates
events, assigns ringside officials, investigates complaints
received, and enforces applicable laws by issuing fines and
suspending or revoking licenses. In 2014, the Commission
supervised 128 events. At the time of the Commission's
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Sunset Review Oversight Hearing earlier this year, the
Commission has so far supervised 38 events, including 18
boxing, 8 MMA,
1 kickboxing.
As a special fund entity, the Commission receives no General
Fund (GF) support, relying solely on fees set in statute and
collected from regulatory and license fees. For each event
held in California that the Commission regulates, the
Commission collects a "gate fee" from the event promoter,
which is a 5% fee on gross ticket sales for that event, not
to exceed $100,000. The Commission also collects a "TV fee"
from the event promoter if the event is broadcast on
television, which is a 5% fee on the revenue a promoter
collects from broadcasting rights, not to exceed $35,000.
The Commission receives over 70% of its revenue from these
fees.
The Commission licenses a number of individuals related to
the participation in, oversight for, and management of events
in California. The Commission does not require any formal
education requirements for licensure of fighters, promoters,
managers, seconds, matchmakers, referees, judges and
timekeepers. However, licensees must possess a minimum level
of skill to enable them to safely compete against one another
and demonstrate their ability to perform. Licensees who do
not fall into the combatant category such as referees,
judges, timekeepers and ringside physicians (who are approved
by the Commission) must have adequate knowledge of laws and
rules so as not to jeopardize the health and safety of
athletes. Many of the Commission's licensees must also pass
competency exams provided by the Commission unless they are
licensed in other jurisdictions. Fighters must also pass
medical examinations that determine whether his or her health
or safety may be compromised by licensure and participation
in an event.
The Commission has direct disciplinary authority to issue
immediate suspensions and fines to ensure violations by
Commission licensees are handled and reported quickly. The
Commission also has the ability to issue cease and desist
orders for unauthorized, illegal events in addition to the
suspensions and license revocations for violations of the
State Act and accompanying Commission regulations and rules.
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The Commission partners with the Office of the Attorney
General (AG) when license revocations, suspension or
application denials are appealed. The Commission also
conducts arbitrations for its licensees when disputes arise
within either the boxer-manager or boxer-promoter agreements
and has sole authority over these arbitration proceedings.
The Commission's citation and fine option allows the
Commission to penalize licensees rather than pursue formal
discipline for less serious offenses, or offenses where
probation or license revocation is not appropriate
4. Review of the Commission: Issues Identified and Recommended
Changes. The following are some of the major issues
pertaining to the Commission along with background
information concerning the particular issue. Recommendations
were made by Committee staff regarding the particular issue
areas which needed to be addressed.
a) Issue: Medical Advisory Committee Quorum
Background: The State Act creates an Advisory Committee on
Medical and Safety Standards (MAC) consisting of six
licensed physicians who are appointed by the Commission.
The Commission has been advised that in order for the MAC
to receive a quorum, a majority of appointed members must
be present, which means that four of the six members must
attend meetings. According to the Commission, the MAC does
not always even have six member appointees who would be
eligible to attend these important meetings where guidance
on key safety issues is discussed and recommendations are
agreed upon to submit to the Commission as a whole. A
quorum is required for governing bodies to meet and conduct
official business or take official action such as voting on
agenda items. It is unclear whether this important
advisory committee can only meet if a quorum is achieved or
if the committee, the meetings for which are noticed
publicly, can meet with, for example, only a majority of
the appointed members present.
Recommendation and Proposed Statutory Change: Committee
staff recommended necessary changes to the State Act to
clarify how, when, according to what requirements for
public meetings and under what circumstances the MAC can
meet.
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This bill clarifies that a majority of the appointed members of
the MAC constitute a quorum for the purposes of meeting.
b) Issue: Technical Changes May Improve the Effectiveness
of the State Act and Commission Operations, Use of
Performance Enhancing Substances and Drug Testing Costs.
Background: The Commission currently has one of the most
thorough drug testing programs in the regulated combat
sports landscape, but maintaining this important effort has
high costs associated with it. The Commission's cite and
fine ability allows for punishment to licensees for
violations of the law that while significant, may not be
serious enough to warrant license suspension. Fines are
used as a penalty and are usually accompanied by a
suspension or order to correct conduct. They are commonly
issued against fighters for using prohibited substances and
conduct that brings discredit to combative sports or the
Commission. The Commission's current fines may not be
deterring certain activity and may not be strong enough to
make any kind of impact to professional fighters receiving
high salaries. The Commission has also struggled to
establish consistency in its citation and fine program,
sometimes assigning small fines to certain fighters for
some violations and large fines to others for similar
violations.
The Commission has explored seeking increased authority to
collect fines so that it can more effectively discipline
its licensees, specifically by basing the amount of a fine
on a percentage of the fighter's purse. Some athletes
receive over six figures to participate in bouts, and
paying a $2500 fine for use of an illegal substance does
not make a dent in their earnings, thus potentially
perpetuating use of the banned drugs without any noticeable
penalty. The Commission reports that having this option
will provide a greater level of deterrence for highly paid
athletes. Other states like Nevada take between 3 and 40
percent of a fighter's purse for the event where the
violation occurs.
Recommendation and Proposed Statutory Change: Committee
staff recommended that the Committees authorize the
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Commission in statute to adjust its fine collection
abilities so that it may collect a percentage of a
fighter's purse for certain substance abuse violations and
asked the Commission to advise the Committees of any
statutory changes necessary to continue to keep California
standards for banned substances on par with international
agencies like WADA. Committee staff also recommended
making technical changes to the State Act to clarify that
athlete licensees are subject to drug testing throughout
the period of their licensure, rather than only connected
to an event (drug testing directly prior to or at an event)
and recommended clarifying that blood and urine samples are
both acceptable for drug testing.
This bill codifies the Commission's authority to conduct
drug testing necessary to promote the health and safety of
licensees by providing that the administration or use of
any drugs, alcohol or stimulants or injections in any part
of the body or the use of any prohibited substance
specified in the Prohibited List of the World Anti-Doping
Code, as promulgated by the World Anti-Doping Agency, by a
professional or amateur boxer or martial arts fighter
licensed by the Commission, is prohibited. The bill also
authorizes the Commission, in its discretion and through
the rulemaking process, to determine the necessity of
exemptions to the prohibition on prohibited substances for
certain licensees. This bill authorizes the Commission to
conduct drug testing at any time during the period of
licensure for a professional or amateur boxer or martial
arts fighter licensed by the Commission and authorizes the
Commission to collect blood and urine specimens from a
professional or amateur boxer or martial arts fighter
licensed by the Commission in order to detect the presence
of any prohibited substances. The bill requires collection
of specimens to be done in the presence of authorized
Commission personnel. The bill also authorizes the
Commission to assess a fine equal to a certain percentage
of the total purse for a violation of the prohibited
substances provisions outlined above. (The Author notes
that he intends to work with the Commission and
Administration to determine the proper percentage of the
total purse the Commission should assess for detection of
prohibited substances.)
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c) Issue: Arbitration Cost Recovery
Background: The Commission is responsible for arbitration
between licensees and managers or promoters when contract
disputes arise. The Commission absorbs costs related to
arbitration for contract disputes that it oversees that may
impede its ability to maintain a healthy fund balance. The
Commission utilizes the services of the AG to conduct
arbitration proceedings and is then billed for these
services at a rate that is not feasible for the Commission
to pay on an ongoing basis. The Commission has exceeded
its AG expenditure authority yet has a statutory
requirement to assist fighters through this process. The
question was raised as to whether parties involved should
absorb certain costs, ensuring that any payment for
arbitration does not serve as a deterrent to licensees
seeing arbitration.
Recommendation and Proposed Statutory Change: Committee
staff recommended that the Commission be authorized to seek
cost recovery for arbitration and requested that the
Commission provide additional information about the
instances under which it might collect reimbursement costs
for arbitration and what the options may be for determining
the costs paid by licensees (for example, a percentage of
the disputed fees).
This bill codifies the Commission's existing authority to
recognize and enforce contracts between boxers and managers
and between boxers and licensed clubs and extends those
provisions to include martial arts fighters. The bill also
clarifies that all disputes between the parties to the
contract, including the validity of the contract, shall be
arbitrated by the Commission pursuant to the provisions of
the contract and authorizes the Commission to seek cost
recovery related to arbitration proceedings.
d) Issue: Continuation of the Commission
Background: California's professional and amateur boxers,
kickboxers and mixed martial arts athletes are better
served with appropriate oversight by a Commission, and the
state benefits from holding these events in California. If
the Commission goes away, large scale events held in
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communities throughout the state will not happen, taking
with them the economic windfall to local businesses. Most
significantly, fighting will still take place, in an
underground, unregulated environment that is not conducive
to protecting athletes and promoting career opportunities
and abilities of many young people.
The most important work of the Commission happens on the
ground level, managing and overseeing events and promoting
the well-being of the competitors participating in combat
sporting events in California. While the Commission has
struggled with basic operational and administrative
functions over the years, the current membership and
management have shown a commitment to improve the
Commission's overall efficiency and effectiveness and are
working cooperatively with the Legislature and the
Committees to bring about necessary changes.
Recommendation and Proposed Statutory Change: Committee
staff recommended the Commission's operations and the State
Act be extended for four years and be reviewed at that time
by the respective Committees of the Senate and Assembly.
Committee staff recommended that boxers, kickboxers and
mixed martial arts athletes continue to be regulated by the
current Commission members in order to protect the
interests of athletes and the public and be reviewed once
again in four years.
This bill extends the operations of the Commission until
January 1, 2020.
e) Issue: Technical Cleanup. This bill includes cleanup
provisions to clarify the State Act as recommended by the
Commission and Committee staff.
1. Related Legislation. SB 465 (Hill) extends the operation of
the Contractors' State License Board until 2020 and makes
various changes to the Contractors' State License Law.
( Status: The bill will also be considered by this Committee
at today's hearing.)
SB 466 (Hill) sunsets the Board of Registered Nursing.
( Status: The bill will also be considered by this Committee
at today's hearing.)
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SB 467 (Hill) extends the operation of the California Board
of Accountancy until 2020 and makes various changes in
regards to the DCA. ( Status: The bill will also be
considered by this Committee at today's hearing.)
SB 468 (Hill) extends the operation of the Bureau of Security
and Investigative Services and the Alarm Company Act,
Locksmith Act, Private Investigator Act, Private Security
Services Act, Proprietary Security Services Act, and
Collateral Recovery Act until January 1, 2020. It also
subjects the Bureau to review by the appropriate committees
of the Legislature and makes various changes to provisions in
the aforementioned Acts to improve the oversight, enforcement
and regulation by the Bureau of licensees under each Act.
( Status: The bill will also be considered by this Committee
at today's hearing.)
AB 177 (Bonilla) extends the operation of the Board for
Professional Engineers, Land Surveyors and Geologists and
California Architects Board and Landscape Architects
Committee until January 1, 2020. ( Status: The bill is
pending in the Assembly Committee on Business and
Professions.)
AB 178 (Bonilla) extends the operation of the Board of
Vocational Nursing and Psychiatric Technicians until January
1, 2020. ( Status: The bill is pending in the Assembly
Committee on Business and Professions.)
AB 179 (Assembly Committee on Business and Professions)
extends the operation of the Dental Board of California until
January 1, 2020. ( Status: The bill is pending in the
Assembly Committee on Business and Professions.)
AB 180 (Assembly Committee on Business and Professions)
extends the operation of the Cemetery and Funeral Bureau
until January 1, 2020. ( Status: The bill is pending in the
Assembly Committee on Business and Professions.)
AB 181 (Assembly Committee on Business and Professions)
extends the operation of the Board of Barbering and
Cosmetology until January 1, 2020. ( Status: The bill is
pending in the Assembly Committee on Business and
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Professions.)
SUPPORT AND OPPOSITION:
Support: None on file as of April 21, 2015.
Opposition: None on file as of April 21, 2015.
-- END --