BILL ANALYSIS                                                                                                                                                                                                    



          SENATE COMMITTEE ON APPROPRIATIONS
                             Senator Ricardo Lara, Chair
                            2015 - 2016  Regular  Session

          SB 469 (Hill) - State Athletic Commission
          
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          |Version: April 22, 2015         |Policy Vote: B., P. & E.D. 8 -  |
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          |Urgency: No                     |Mandate: Yes                    |
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          |Hearing Date: May 28, 2015      |Consultant: Mark McKenzie       |
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          SUSPENSE FILE. AS AMENDED.




          


          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 (as approved on May 28, 2015):
           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  
            of approximately $1.7 million.

           Costs of approximately $115,000 in 2016-17 and $107,000  







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            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.  (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  
          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  








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          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  
          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.








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          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.


          Author amendments (as adopted on May 28, 2015): Author's  
          amendments would specify that the Commission may assess a fine  
          of 40 percent of the total purse for violations related to the  
          use of prohibited substances.





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