Bill Text: CA AB1136 | 2023-2024 | Regular Session | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: State Athletic Commission: mixed martial arts: retirement benefit.

Spectrum: Partisan Bill (Democrat 5-0)

Status: (Passed) 2023-10-08 - Chaptered by Secretary of State - Chapter 466, Statutes of 2023. [AB1136 Detail]

Download: California-2023-AB1136-Introduced.html

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CALIFORNIA LEGISLATURE— 2023–2024 REGULAR SESSION

Assembly Bill

No. 1136

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Introduced by Assembly Member Haney

February 15, 2023

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An act to add Article 17 (commencing with Section 18888) to Chapter 2 of Division 8 of the Business and Professions Code, relating to business, and making an appropriation therefor.

LEGISLATIVE COUNSEL'S DIGEST

AB 1136, as introduced, Haney. State Athletic Commission: mixed martial arts: pension fund.

Existing law, the Boxing Act, also known as the State Athletic Commission Act, creates within the Department of Consumer Affairs the State Athletic Commission. Under existing law, the commission has sole direction, management, control of, and jurisdiction over all professional and amateur boxing and kickboxing, all forms and combinations of full contact martial arts contests, including mixed martial arts, and matches or exhibits conducted, held, or given within California. Existing law authorizes the commission to license professional and amateur boxers, professional and amateur martial arts fighters, and booking agents, managers of professional boxers and professional martial arts fighters, trainers, chief seconds, and seconds of each. Existing law prohibits a person from participating in any contest, or serving in the capacity of a booking agent, manager, trainer, or second, unless they have been licensed for that purpose by the commission.

Existing law establishes the Boxers’ Pension Fund, a retirement fund under the exclusive control of the commission, that is funded by an assessment on tickets that is transferred to the commission following a contest or wrestling exhibition, as prescribed, and by contributions by boxers, managers, promoters, or any one or more of these persons. Existing law requires all moneys in the Boxers’ Pension Fund to be continuously appropriated to be used exclusively for the purposes and administration of the pension fund. Existing law prohibits any moneys with the Boxers’ Pension Fund from being deposited or transferred to the general fund.

This bill would require the commission to establish, similar to the Boxers’ Pension Fund, the Mixed Martial Arts (MMA) Pension Fund and would continuously appropriate the moneys in the MMA Pension Fund for purposes of administration of a pension plan for martial artists. The bill would give the commission exclusive control of all funds in the MMA Pension Fund, prohibit any funds from being deposited or transferred to the General Fund, and require the funds to be invested as prescribed. The bill would authorize the commission to establish a method for financing the pension plan for martial artists, including by assessment on tickets to events under the commission’s jurisdiction, by revenue generated through the sale of sport paraphernalia and souvenirs, and by contributions from mixed martial artists, managers, promoters, or any one or more of these persons. The bill would authorize the commission to award an early pension benefit for vocational, education, training, or medical need in the amount contained in the covered martial artist’s pension plan account, as specified. The bill would make related findings and declarations.

This bill would include a change in state statute that would result in a taxpayer paying a higher tax within the meaning of Section 3 of Article XIII A of the California Constitution, and thus would require for passage the approval of ²/₃ of the membership of each house of the Legislature.

Digest Key

Vote: 2/3   Appropriation: YES   Fiscal Committee: YES   Local Program: NO  

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Bill Text

The people of the State of California do enact as follows:

SECTION 1.

 Article 17 (commencing with Section 18888) is added to Chapter 2 of Division 8 of the Business and Professions Code, to read:

Article  17. Mixed Martial Arts Pension Fund

18888.

  The Legislature finds and declares all of the following:

(a) Many Californians find a need, purpose, and great benefit in participating in combat sports.

(b) That professional athletes licensed under this chapter, as a group, for many reasons, do not retain their earnings, and are often injured or destitute, or both, and unable to take proper care of themselves, whether financially or otherwise, and that the enactment of this article is to serve a public purpose by making provisions for a needy group to insure a modicum of financial security for professional athletes.

(c) Athletes licensed under this chapter may suffer extraordinary disabilities in the normal course of their trade. These may include acute and chronic traumatic brain injuries, resulting from multiple concussions as well as from repeated exposure to a large number of subconcussive punches and kicks, eye injuries, including retinal tears, holes, and detachments, and other neurological impairments.

(d) The pension plan of the commission is part of the state’s health and safety regulatory scheme, designed to protect professional athletes, including mixed martial artists, licensed under this chapter from the health-related hazards of their trade. The pension plan addresses those health and safety needs, recognizing the disability and health maintenance expenses those needs may require.

(e) The regulatory system of California is interrelated with the conduct of the trade in every jurisdiction. Athletes licensed under this chapter participate in contests in other states and many athletes who are based in those other jurisdictions may participate in California on a single-event basis.

(f) The outcomes and natures of fights in other jurisdictions are relevant to California regulatory jurisdiction and are routinely monitored for health and safety reasons, so that, for example, a knockout of an athlete licensed under this chapter in another jurisdiction is paid appropriate heed with respect to establishing a waiting period before that athlete may commence fighting in California.

(g) The monitoring of other jurisdictions is an integral part of the health and safety of California athletes licensed under this chapter due to the interstate nature of the trade, and therefore the regulatory scheme for contests and athletes under this chapter should reflect this accordingly.

18888.1.

 For purposes of this article, “martial artist” shall mean a licensed professional mixed martial artist, licensed professional kickboxer, licensed professional Muay Thai fighter, or athlete licensed by the commission other than a boxer.

18888.2.

 (a) The commission shall, consistent with the purposes of this article, establish a pension plan for martial artists who engage in mixed martial arts contests in this state.

(b) The commission shall, consistent with the purposes of this article, establish the method by which the pension plan will be financed, including those who shall contribute to the financing of the pension plan. The method of financing the pension plan may include, but is not limited to, assessments on tickets, revenue through the sale of sport paraphernalia and souvenirs, and contributions by martial artists, managers, promoters, or any one or more of these persons, in an amount sufficient to finance the pension plan.

(c) Any pension plan established by the commission shall be actuarially sound.

18888.3.

 (a) At the time of payment of the fee required by Section 18824, a promoter shall pay to the commission all amounts scheduled for contribution to the pension plan for martial artists. If the commission, in its discretion, requires pursuant to Section 18888.2, that contributions to the pension plan be made by the martial artist and their manager, those contributions shall be made at the time and in the manner prescribed by the commission.

(b) All contributions to finance the pension plan for martial artists shall be deposited in the State Treasury and credited to the Mixed Martial Arts (MMA) Pension Fund, which is hereby created. Notwithstanding the provisions of Section 13340 of the Government Code, all moneys in the MMA Pension Fund are hereby continuously appropriated to be used exclusively for the purposes and administration of the pension plan.

(c) The MMA Pension Fund is a retirement fund, and no moneys within it shall be deposited or transferred to the General Fund.

(d) The commission has exclusive control of all funds in the MMA Pension Fund. No transfer or disbursement in any amount from this fund shall be made except upon the authorization of the commission and for the purpose and administration of the pension plan.

(e) Except as otherwise provided in this subdivision, the commission or its designee shall invest the money contained in the MMA Pension Fund according to the same standard of care as provided in Section 16040 of the Probate Code. The commission has exclusive control over the investment of all moneys in the MMA Pension Fund. Except as otherwise prohibited or restricted by law, the commission may invest the moneys in the fund through the purchase, holding, or sale of any investment, financial instrument, or financial transaction that the commission in its informed opinion determines is prudent.

(f) The administrative costs associated with investing, managing, and distributing the MMA Pension Fund shall be limited to no more than 2 percent of the corpus of the fund. Diligence shall be exercised by administrators in order to lower the fund’s expense ratio as far below 2 percent as feasible and appropriate. The commission shall report to the Legislature on the impact of this provision during the next regularly scheduled sunset review.

18888.4.

 (a) A promoter may, but is not required to, add to the price of each ticket sold for a professional mixed martial arts contest an amount specifically designated on the ticket for contribution or as a donation, either or both, to the pension plan established pursuant to Section 18888.2. The additional amount shall not be subject to the admissions tax required by Section 18824 or any other deductions. Nothing in this section shall authorize the addition of those amounts to less than all the tickets sold for the professional mixed martial arts contest involved. The promoter shall pay additional contributions collected in accordance with Section 18888.2.

(b) Any additional contributions received pursuant to this section shall not be considered to offset any of the contributions required by the commission under Section 18888.2.

18888.5.

 In addition to any other form in which retirement benefits may be distributed under the pension plan, the commission may, in its discretion, award to a covered martial artist an early pension benefit for vocational, education, training, or medical need in the amount contained in the covered martial artist’s pension plan account at the time the commission makes this award and in the manner provided in the regulations governing the martial artist’s pension plan. This benefit shall be in lieu of a pension.

18888.6.

 The commission shall adopt emergency regulations to implement, interpret, or make specific this section no later than July 1, 2024. The adoption of regulations shall be deemed an emergency and necessary to avoid serious harm to the public peace, health, safety, or general welfare within the meaning of Section 11342.545 of the Government Code, and the commission need not make a written finding of emergency as required by Section 11346.1 of the Government Code. Notwithstanding subdivisions (e) and (h) of Section 11346.1 of the Government Code, the board may annually readopt any emergency regulation authorized by this section that is the same as or substantially equivalent to an emergency regulation previously adopted pursuant to this section until January 1, 2026.