BILL ANALYSIS Ó SENATE COMMITTEE ON APPROPRIATIONS Senator Ricardo Lara, Chair 2015 - 2016 Regular Session SB 469 (Hill) - State Athletic Commission ----------------------------------------------------------------- | | | | | | ----------------------------------------------------------------- |--------------------------------+--------------------------------| | | | |Version: April 22, 2015 |Policy Vote: B., P. & E.D. 8 - | | | 0 | | | | |--------------------------------+--------------------------------| | | | |Urgency: No |Mandate: Yes | | | | |--------------------------------+--------------------------------| | | | |Hearing Date: May 11, 2015 |Consultant: Mark McKenzie | | | | ----------------------------------------------------------------- This bill meets the criteria for referral to the Suspense File. Bill Summary: SB 469 would extend the sunset on the California State Athletic Commission (Commission) and the term of its executive officer until January 1, 2020. The bill would also explicitly authorize the Commission to conduct drug testing of licensees, and to enforce contracts between fighters and managers and between fighters and licensed clubs. Fiscal Impact: Projected expenditures of approximately $1.6 million annually (primarily from the Athletic Commission Fund), supporting 10.7 PY, until January 1, 2020, fully offset by annual fee revenues SB 469 (Hill) Page 1 of ? of approximately $1.7 million. Costs of approximately $115,000 in 2016-17 and $107,000 annually ongoing for .5 PY of staff time and expenses related to additional drug tests. (Athletic Commission Fund) Estimated one-time costs of up to $50,000 in 2015-16 to develop and adopt regulations providing for exceptions to drug testing requirements. (Athletic Commission Fund) Unknown increases in fine revenues for violations related to the use of prohibited substances. The amount of the fine is currently unspecified in the bill (Athletic Commission Fund) Background: Existing federal law, The Muhammad Ali Boxing Reform 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. Existing state law, the Boxing Act, or State Athletic Commission Act, provides for the licensing and regulation of boxers, kickboxers, martial arts athletes, and events held in California by the California State Athletic Commission within the Department of Consumer Affairs (DCA), and sunsets the Commission on January 1, 2016. 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, and has supervised over 40 so far in 2013. The Commission is supported solely from licensing and regulatory fees set in statute. In addition to licensing fees, 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, for each regulated event held in California. 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. As part of its disciplinary authority, the Commission partners SB 469 (Hill) Page 2 of ? with the Attorney General's Office (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. Proposed Law: SB 469 would extend the sunset on the Commission and its executive officer until January 1, 2020, and make the following changes to the State Athletic Commission Act: Prohibit the use of any drugs, alcohol, stimulants, or injections, or the use of any prohibited substance specified in the Prohibited List of the World Anti-Doping Code, by a licensed professional or amateur boxer or martial arts fighter. Authorize the Commission to adopt regulations to provide for exemptions to this prohibition for certain licensees. Explicitly authorize the Commission to conduct drug testing of licensees at any time, and to collect blood and urine specimens to detect the presence of any prohibited substances. Collection of specimens must occur in the presence of Commission personnel. Authorize the Commission to assess a fine equal to ___ percent of the total purse for a violation related to the use of prohibited substances. Require the Commission to recognize and enforce contracts between boxers or martial arts fighters and managers, and between boxers or fighters and licensed clubs. Require that all contract disputes be arbitrated by the Commission, and authorize cost recovery from the parties subject to the proceedings. Clarify that a majority of the appointed members of the Commission's Advisory Committee on Medical and Safety Standards constitutes a quorum for purposes of meeting. Related Legislation: This bill is one of five measures introduced this session by the Senate Business, Professions, and Economic Development Committee to extend the sunset on licensing boards SB 469 (Hill) Page 3 of ? within DCA - including SB 465 (Hill), SB 466 (Hill), SB 467 (Hill), and SB 468 (Hill). Five additional bills that extend the sunset on DCA licensing boards and bureaus are being considered by the Assembly this year. Staff Comments: Staff notes approximately $1.7 million in licensing and regulatory fees are projected to be deposited in the Athletic Commission Fund in the current year and 2015-16 budget year, which is more than adequate to support projected expenditures of approximately $1.45 million from the Fund. The Fund is expected to have a reserve of approximately $1 million at the end of the 2015-16 fiscal year, which is sufficient to support the additional expenditures related to this bill while maintaining a healthy reserve for the duration of the sunset period. Recommended Amendments: The bill should be amended to fill in the blank on page 6, line 16 to specify the percentage of the total purse that would be a penalty for violations related to the use of prohibited substances. -- END --