BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 52|
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THIRD READING
Bill No: AB 52
Author: Cedillo (D), et al
Amended: 7/6/00 in Senate
Vote: 21
PRIOR VOTES NOT RELEVANT
SENATE BUSINESS & PROFESSIONS COMMITTEE : 6-1, 6/26/00
AYES: Figueroa, Johannessen, Kelley, Murray, O'Connell,
Polanco
NOES: Speier
SENATE APPROPRIATIONS COMMITTEE : 7-2, 8/7/00
AYES: Burton, Karnette, Kelley, Leslie, McPherson,
Mountjoy, Perata
NOES: Johnston, Bowen
SUBJECT : Athletic events: fees
SOURCE : Staples Center
DIGEST : This bill establishes $50,000 as the maximum fee
on admission receipts required to be paid to the California
Athletic Commission by promoters for any one boxing
contest.
ANALYSIS : Existing law:
1.Establishes the California Athletic Commission
(commission) within the State Department of Consumer
Affairs with responsibility to develop rules and
CONTINUED
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regulations governing boxing and martial arts.
2.Requires the promoter or other organization conducting a
boxing, kickboxing, martial arts, or wrestling contest to
pay the commission a fee of five percent of the amount
actually paid for admission to a contest, except that the
fee may never be less than $1,000 for a professional
contest and $500 for an amateur contest.
3.Requires the promoter or other organization conducting a
contest, within 72 hours after a contest for which
admission is charged and received, to furnish a written
report to the commission showing the number of tickets
issued or sold for the contest, the amount of the gross
receipts or value of the tickets, and the gross price
charged directly or indirectly, for the sale, lease, or
other broadcasting or television rights of the contest.
4.Requires the commission to administer a pension plan for
boxers who engage in boxing contests in this state.
This bill:
1.Provides that the five percent fee be paid to the
commission shall not exceed $50,000 for any one boxing
contest.
2.Provides that if the admission for any single boxing
contest exceeds $35,000, 50 percent of the amount in
excess of $35,000 shall be deposited in the Boxer's
Pension Plan (plan) and 50 percent of the amount in
excess of $35,000 shall be paid to the commission.
3.Sunsets the provisions of this bill as of January 1,
2006.
4.Requires the commission to report to the Legislature on
the impact and effect of the provisions of this bill by
December 31, 2004.
Background
Earlier this year, the author introduced AB 2937 after
several news articles profiled the dissatisfaction of
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boxing promoters and Staples Arena officials with the five
percent fee on boxing event admission receipts. The
dissatisfied promoters were in the process of negotiating a
championship boxing match at the Staples Arena in Los
Angeles. Since the initial news articles appeared, the
deal for the championship fight was finalized and took
place as scheduled on June 17, 3000. The fight was
anticipated to generate $8 million in ticket revenue, which
would result in a $400,000 fee required to be paid to the
state. If the Legislature had passed AB 2937, it would
have reduced the fee from $400,000 to $50,000. AB 2937 was
never heard by the Assembly Governmental Organization
Committee.
California Athletic Commission . The commission is
responsible for regulating professional and amateur boxing
and professional and amateur full-contact martial arts.
There are approximately 100 professional boxing events, 150
amateur boxing events, and 70 professional/amateur
full-contact martial arts events held each year in
California. The regulatory process attempts to maximize
the health and safety of athletes and ensures that events
are fair and competitive.
California has more professional boxing events than any
other state. Commission staff must approve all bout
opponents from preliminary bouts to world title bouts. All
officials, ringside physicians and inspectors are assigned
to events by commission staff. To ensure integrity,
ability and knowledge, mandatory clinics are held every six
months for referees, judges, timekeepers, ringside
physicians and inspectors. All referees are formally
evaluated on a bout-by-bout basis and remedial training is
offered.
Professional Boxer's Pension Plan . The Plan is defined as
a "contribution" plan which is now based on a per-ticket
assessment of $.88 per ticket for each event (boxing and
otherwise) paid by the promoter. The funds are now
administered by First Union Securities. There are
currently 400 vested boxers which means they are eligible
for benefits at age 55. To date, the commission has
refunded $404,542 to boxers who have had a break in service
and do not meet the vesting criteria. The amount of
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$25,533 has been returned to boxers who are permanently
disabled.
FISCAL EFFECT : Appropriation: Yes Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
Fiscal Impact (in thousands)
Major Provisions 2000-01 2001-02
2002-03 Fund
Boxing fee -- unknown revenue or
loss -- General
SUPPORT : (Verified 8/10/00)
Staples Center (source)
Central City Association of Los Angeles
City of Los Angeles
Greater Los Angeles African-American Chamber of Commerce
Great Western Forum
Los Angeles Area Chamber of Commerce
Los Angeles Convention & Visitors Bureau
OPPOSITION : (Verified 8/10/00)
California Athletic Commission
ARGUMENTS IN SUPPORT : According to the author's office,
establishment of a $50,000 cap on the fee that the
commission charges for boxing events will enable California
to compete with other states in attracting and retaining
large boxing events. The author's office claims that
without a fee cap, California is at a competitive
disadvantage with other states that have implemented a fee
cap. The author's office notes that in addition to the
five percent fee required to be paid to the state, a three
percent tax is also authorized for boxing gate receipts in
the City of Los Angeles.
ARGUMENTS IN OPPOSITION : The California Athletic
Commission indicates that it opposes AB 52 because it
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undermines the existence of the Commission and places their
goal of financial self-sufficiency in jeopardy. The
Commission points out that the Joint Legislative Sunset
Review Committee recently recommended that the commission
should reduce its reliance on the General Fund. The
commission indicates that it has an annual struggle with
revenue collection to avoid deficiency requests and this
bill will in no way eliminate that struggle.
CP:cm 8/10/00 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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