BILL ANALYSIS                                                                                                                                                                                                    



                                                                     SB 469


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          Date of Hearing:  July 7, 2015


                   ASSEMBLY COMMITTEE ON BUSINESS AND PROFESSIONS


                                Susan Bonilla, Chair


                       SB 469(Hill) - As Amended June 1, 2015


          NOTE: This bill was double referred, having been previously  
          heard by the Assembly Committee on Arts, Entertainment, Sports,  
          Tourism, and Internet Media on June 30, 2015, and approved on a  
          6-0 vote. 


          SENATE VOTE:  40-0


          SUBJECT:  State Athletic Commission.


          SUMMARY:  Extends the operation of the California State Athletic  
          Commission (CSAC) until January 1, 2020 and implements the  
          CSAC's sunset review oversight hearing recommendations,  
          including authority for drug testing and fines, the authority to  
          recover arbitration costs, and other technical and clarifying  
          changes.


          EXISTING LAW:


          1)Establishes, until January 1, 2016, the California State  
            Athletic Commission (CSAC) within the Department of Consumer  
            Affairs (DCA) to license and regulate boxers, kickboxers,  
            martial arts athletes, and events held in California.   








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            (Business and Professions Code (BPC)  18600 - 18887)
          2)Establishes an Advisory Committee on Medical and Safety  
            Standards within CSAC as follows:  (BPC  18645)


             a)   The committee consists of six licensed physicians and  
               surgeons appointed by the CSAC;
             b)   The CSAC may call meetings of the committee at times and  
               places as it deems appropriate for the purpose of studying  
               and recommending medical and safety standards for the  
               conduct of boxing, wrestling, and martial arts contests;  
               and,


             c)   Appointing a person to the committee requires a majority  
               vote of the CSAC. Each appointment is at the pleasure of  
               the CSAC for a term not to exceed four years.


          3)Authorizes the CSAC, its executive officer, or the executive  
            officer's duly authorized representative to assess fines not  
            to exceed two thousand five hundred dollars ($2,500) for each  
            violation of any of the provisions of the Boxing Act or any of  
            the CSAC's rules and regulations.  Fines may be assessed  
            without advance hearing, but the licensee may apply to the  
            CSAC for a hearing on the matter if the fine should be  
            modified or set aside.  The application for a hearing must be  
            in writing and must be received by the CSAC within 30 days  
            after service of notice of the fine.  Upon receipt of the  
            written request, the CSAC must set the matter for hearing  
            within 30 days.  (BPC  18843)
          4)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, California Code of Regulations (CCR)  303)


          THIS BILL:









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          5)Extends the operation of the CSAC until January 1, 2020.


          6)Provides that a majority of the appointed members of the CSAC  
            Advisory Committee constitutes a quorum for the purposes of  
            meeting.


          7)Prohibits the administration or use of any drugs, alcohol,  
            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 adopted by the World  
            Anti-Doping Agency, by a professional or amateur boxer or  
            martial arts fighter licensed by the CSAC. 


          8)Authorizes the CSAC, in its discretion and pursuant to  
            regulations adopted pursuant to the Administrative Procedure  
            Act (Chapter 3.5 (commencing with  11340) of Part 1 of  
            Division 3 of Title 2 of the Government Code), to determine  
            the necessity of exemptions to the use of a prohibited  
            substance for licensees.


          9)Authorizes the CSAC to conduct testing at any time during the  
            period of licensure for a professional or amateur boxer or  
            martial arts fighter licensed by the CSAC.


          10)                                                            
            Authorizes the CSAC to collect blood and urine specimens from a  
            professional or amateur boxer or martial arts fighter licensed  
            by the CSAC to detect the presence of any prohibited  
            substances.  Collection of specimens must be done in the  
            presence of authorized CSAC personnel.


          11)                                                            








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            Provides that a professional or amateur boxer or martial arts  
            fighter licensed by the CSAC, for which the presence of a  
            prohibited substance is detected through testing by the CASC,  
            is subject to penalties under the Boxing Act.


          12)                                                            
            Authorizes the CSAC to additionally assess a fine equal to 40  
            percent of the total purse for a violation of related to the  
            use of prohibited substances.


          13)                                                            
            Requires the CSAC to recognize and enforce contracts between  
            boxers or martial arts fighters and managers and between  
            boxers or martial arts fighters and licensed clubs.  Contracts  
            must be executed on printed forms approved by the commission.  
            The CSAC may recognize or enforce a contract not on its  
            printed form if entered into in another jurisdiction.   No  
            other contract or agreement may be recognized or enforced by  
            the CSAC.   All disputes between the parties to the contract,  
            including the validity of the contract, must be arbitrated by  
            the CSAC pursuant to the provisions of the contract.  Subject  
            to 4 CCR  227, a person who seeks arbitration of a contract  
            must send a written request to the CSAC's headquarters and to  
            the office of the Attorney General.  The CSAC may seek cost  
            recovery related to arbitration proceedings from the parties  
            to the proceedings.


          14)                                                            
            Makes other technical and non-substantive changes.


          15)                                                    Provides  
            that no reimbursement is required by this bill pursuant to  6  
            of Article XIII                                        B of  
            the California Constitution because the only costs that may be  
            incurred by a local agency or school district will be incurred  








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            because this act creates a new crime or infraction, eliminates  
            a crime or infraction, or changes the penalt16)        y for a  
            crime or infraction, within the meaning of  17556 of the  
            Government Code, or changes the definition of a crime within  
            the meaning of  6 of Article XIII                     B of  
            the California Constitution.
          FISCAL EFFECT:  According to the Senate Appropriations Committee  
          analysis dated May 28, 2015, this bill has projected  
          expenditures of approximately $1.6 million annually, supporting  
          10.7 PY, until January 1, 2020, fully offset by annual fee  
          revenues of approximately $1.7 million.  It will have 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.  There are also estimated one-time costs of up to $50,000  
          in 2015-16 to develop and adopt regulations providing for  
          exceptions to drug testing requirements.  This bill will also  
          generate unknown increases in fine revenues for violations  
          related to the use of prohibited substances.


          COMMENTS:


          Purpose.  This bill is author sponsored.  According to the  
          author, "[this bill] in particular 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. 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.  
          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. While the Commission has faced some  
          administrative and front office challenges in the past, the real  
          work that they do, and do really well, is on the ground level at  
          the events. From the medical walk-through to checking the ring  








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          or cage to ensuring the fighter immediately undergoes a medical  
          exam to staff ensuring that a fighter gets paid on the spot;  
          this is where the Commission excels and it is important for  
          regulation of events to continue to ensure the highest degree of  
          safety for the many individuals participating in these sports."


          Background.  In March of this year, the Assembly Business and  
          Professions Committee and the Senate Business, Professions and  
          Economic Development Committee (Committees) conducted joint  
          oversight 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.


          This bill is one of several sunset bills that are intended to  
          implement the legislative changes recommended by Committee  
          staff.  The recommendations are reflected in the background  
          papers prepared by Committee staff for each agency and program  
          reviewed.


          Medical Advisory Committee Quorum.  It is currently unclear how  
          many Medical Advisory Committee members must be present for a  
          quorum.  A quorum is required for governing bodies to meet and  
          conduct official business or take official action such as voting  
          on agenda items.  Therefore, this bill clarifies that a majority  
          of the appointed members of the committee constitutes a quorum. 


          Use of Performance Enhancing Substances and Drug Testing Costs.   
          The CSAC's current fines ($2,500) may not be high enough to  
          deter the use of prohibited substances by professional fighters  








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          receiving high salaries.  The CSAC 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.


          Some athletes receive over six figures to participate in bouts,  
          and a $2,500 fine for use of a prohibited substance may not feel  
          like a penalty.  The CSAC reports that having this option will  
          provide a greater level of deterrence for highly paid athletes.   
          Other states like Nevada take between three and 40 percent of a  
          fighter's purse for the event where the violation occurs.


          Therefore, this bill codifies the CSAC's authority to conduct  
          drug testing.  It also provides that the CSAC can provide  
          exemptions for the use of prohibited substances (arising out of  
          the issue of therapeutic exemptions for the medically necessary  
          use of a prohibited substance).  To ensure proper deterrence and  
          the ability to recoup expenses for drug testing, this bill also  
          allows the commission to take 40 percent of a fighter's purse if  
          the fighter is caught using a banned substance.


          Arbitration Cost Recovery.  The CSAC is responsible for  
          arbitration between licensees and managers or promoters when  
          contract disputes arise.  The CSAC absorbs costs related to  
          arbitration for contract disputes that it oversees that may  
          impede its ability to maintain a healthy fund balance.  


          The CSAC utilizes the services of the Attorney General (AG) to  
          conduct arbitration proceedings, but is then billed for the  
          services at a rate that is not feasible for the CSAC to pay on  
          an ongoing basis. The CSAC has exceeded its allotted AG  
          expenditure authority but is still required to assist fighters  
          through the 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  








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          licensees seeing arbitration.


          As a result, this bill codifies the CSAC'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.  This bill also clarifies that  
          all disputes between the parties to the contract, including the  
          validity of the contract, must be arbitrated by the Commission  
          pursuant to the provisions of the contract and authorizes the  
          Commission to seek cost recovery related to arbitration  
          proceedings.


          Sunset Extension.  While the CSAC has struggled with basic  
          operational and administrative functions in the past, the  
          current membership and management have shown a commitment to  
          improving the CSAC's efficiency and effectiveness and are  
          working cooperatively with the Legislature and the Committees to  
          bring about necessary changes.  As a result, this bill extends  
          the operation of the CSAC until January 1, 2020.  


          Prior Related Legislation.  SB 309 (Lieu), Chapter 370, Statutes  
          of 2013, extended the sunset date for the CSAC to January 1,  
          2016 and addressed issues raised during sunset review.


          AMENDMENT:


          To ensure the CSAC is able to use the new penalty for using a  
          prohibited substance up to 40 percent, the author should make  
          the following technical amendment:


          Page 6, line 14, strike: "equal" and insert:  up 










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           REGISTERED SUPPORT:  


          Ultimate Fighting Championship




          REGISTERED OPPOSITION:  
          None on file.


          Analysis Prepared by:Vincent Chee / B. & P. / (916) 319-3301