House Bills 4335 and 4336 (enrolled)

Contact: Office of Policy and Legislative Affairs

Agency: Licensing and Regulatory Affairs

Analysis

Topic: New Boxing Regulation Law
Sponsor: Representative Robertson
Co-Sponsors: Representatives Gaffney*, Vagnozzi*, Palsrok*, Sheen*, Pappageorge, Hardman, McConico, Stewart, Rocca, Gieleghem, Minore, Zelenko, Kolb, Jamnick, DeRossett, Richardville, Murphy, Voorhees, Hager, Meyer, Julian, Vander Veen, Howell, Hood, Farrah, Hopgood, Brandenburg, Bieda, Clack, DeRoche, Stakoe, Garfield, Gleason, Caswell, Hoogendyk, Sak, Stahl, Huizenga, Gillard (* Original Co-sponsors)

Committees: House Regulatory Reform, Senate Economic Development, Small Business & Regulatory Reform

Date Introduced: March 12, 2003

Date Enrolled: November 9, 2004

Date of Analysis: September 24, 2003

Position: The Department of Labor and Economic Growth supports the bill.

Background: Although Michigan has always been strong in the development of young boxers, Michigan’s boxing regulation does not have a strong national reputation.  One manifestation of Michigan’s relatively weak regulation is the state’s inability to prevent fighters banned by other states from fighting in Michigan.  The insurance requirements of Michigan’s current law provide only minimal protection for boxers and their families.

Description of Bill: The bill creates the Boxing Regulatory Act.   A 7-member Boxing Commission is created and Article 8 of the Occupational Code is repealed.  The director of the Department of Labor and Economic Growth would be an ex officio non-voting member of the Commission.  The duties of the department and the commission are outlined.  Fees are established for promoters and events. The Michigan Boxing Fund is created and is to be used for administration and enforcement.  An applicant is required to demonstrate good moral character.  A promoter is required to file a bond of not less than $20,000 with the department.  Procedures for receiving, investigating, and hearing complaints are provided.  Many administrative functions from the Occupational Code are carried over to the new bill.  The current Occupational Code language relating to boxing elimination contests is also carried over.  Insurance requirements are increased from the current level of $1,000 to $50,000.  There will no longer be a differentiation between the length of rounds for men’s and women’s boxing.  Rounds will be three minutes in length in both cases.

The Senate committee amended the bill to incorporate a regulatory fee for televised events held in venues with at least 5,000 seating capacity.  The fee would be 3% of ticket sales with a maximum amount of $25,000 for a single event.  The concept of the amendment was suggested by the department.  The Senate substitute also makes the department director a non-voting member of the Commission.  The original bill made the director a voting member.

The companion bill, House Bill 4336, amends the Penal Code to refer to the proposed Boxing Regulatory Act.

Summary of Arguments

Pro:

Michigan needs a stronger boxing law.  The state has had a rich history in the development of young boxers, but far too often these fighters are compelled by the regulatory situation here to fight in other states.  Weaknesses of current Michigan’s boxing regulation include a weak commission, no post-event drug test, and lack of a good moral character standard.

Michigan’s weak law also makes it very difficult for us to prevent boxers who have been prohibited from boxing elsewhere from boxing in Michigan.  Michigan made national news several years ago when a Mike Tyson bout was held in Michigan.  Although many argued that he should not be permitted to fight in Michigan, the state did not have the authority under Article 8 of the Occupational Code to prevent him from doing so.  The current proposal would give the state the authority to prevent such bouts.

The proposal provides a good balance between the perceived need in the boxing industry for a stronger Commission and maintaining appropriate regulatory authority and discretion for the department.

If Michigan’s law were strengthened, more high profile bouts with extremely high payouts would come to Michigan.  A good example was a recent fight in Grand Rapids involving Floyd Mayweather, Jr., a Grand Rapids native.  The event reportedly resulted in a six-figure state income tax payment to the state.

Con:

Although the incorporation of the regulatory fee requested by the department is a constructive step, the fee is limited to televised events in the state’s largest venues.  Televised bouts held at smaller venues, like casinos, would not be required to pay the fee.  As a result, revenue may be insufficient to finance the department’s increased regulatory responsibilities under the bill.

The department has concerns about the capacity of the proposed regulatory fee to generate sufficient revenue to finance increased department regulation under the bill.   If the bill sponsor is correct and stronger boxing regulation in Michigan results in an increase in the number of major boxing events promoted in Michigan, the fee has a good chance to generate significant revenue.  Alternatively, if the number of major boxing events does not increase or if the events are promoted in venues

Other Pertinent Information:

Similar proposals have been made in past legislative sessions. Representative Raczkowski was the sponsor of these bills in previous sessions. This is the first time a proposal like this has advanced.

Administrative Rules Impact:

New rules would be required. The department is required to consult with the Commission in promulgating rules. Rules promulgated under current Article 8 of the Occupational Code would retain authorization under the bill.