BILL ANALYSIS SENATE COMMITTEE ON EDUCATION Gloria Romero, Chair 2009-2010 Regular Session BILL NO: AB 2079 AUTHOR: Torlakson AMENDED: May 28, 2010 FISCAL COMM: Yes HEARING DATE: June 30, 2010 URGENCY: No CONSULTANT:Lynn Lorber SUBJECT : Recruiting student athletes. KEY POLICY ISSUES Should collegiate athletic recruiters be required to provide to any student with whom he or she has had personal contact a disclosure letter with specific information regarding athletic scholarships? Should the disclosure letter be provided only once a scholarship offer has been made? Will this disadvantage the recruitment of California student athletes? SUMMARY This bill requires a collegiate athletic recruiter to provide a written disclosure letter with specific information regarding athletic scholarships, medical expenses, and athletic release to any pupil or student (K-postsecondary) with whom the recruiter has had personal contact; and requires a scholarship offer to be made in writing within one week of a verbal offer. BACKGROUND Existing law: 1) Prohibits any person from giving, offering, promising or attempting to give money or other item of value to a student athlete or member of the athlete's immediate family to induce, encourage or reward a student athlete's application, enrollment or attendance at a public or private institution of higher education (IHE) AB 2079 Page 2 to participate in intercollegiate sporting activities. Some exceptions may be granted in accordance with National Collegiate Athletic Association (NCAA) rules. (Education Code 67360) 2) Subjects a person who violates these rules to a civil penalty of up to $10,000, or three times the amount given, offered or promised, whichever is greater. (EC 67360) 3) Prohibits student athletes and members of their immediate family from soliciting or accepting money or other item of value as an inducement, encouragement or reward, subject to the same exceptions and penalty listed above. (EC 67361) The NCAA adopted bylaws that regulate recruiting, scholarships levels, timing and methods of communications between institutions of higher education (IHEs) and student athletes. Rules governing Division I, II and III IHEs are not necessarily the same across divisions. Currently, NCAA bylaws impose a number of restrictions on student athlete financial assistance. For example, NCAA Division 1 schools: 1) Cannot guarantee scholarships for more than one academic year. 2) Cannot finance student health insurance if the insurance is provided or offered to the general student body only on an optional basis. 3) Cannot award financial aid to a student athlete that exceeds the cost of attendance that normally is incurred by students enrolled in a comparable program at that institution. 4) Must include earnings from the student athlete's employment during semester or term time to determine whether a full grant-in-aid is reached and can only allow $2,000 in earnings over a full grant-in-aid award, as defined. The 2010-11 Guide for the College-Bound Student-Athletes, and other links on the NCAA's website, provides information about several aspects of becoming a collegiate athlete, including AB 2079 Page 3 athletically related financial aid and recruiting regulations. Specifically: 1) Athletic scholarships in Divisions I and II are initially awarded for up to one academic year, and may be renewed annually for up to five years (D-I) or up to a total of 10 semesters/15 quarters (D-II). Division III institutions do not award athletic financial aid. 2) Athletic scholarships can be renewed, reduced, increased or canceled from year to year for almost any reason. 3) Athletic scholarships are awarded in a variety of amounts. 4) The total amount of financial aid a student-athlete can receive may be limited, and may affect whether a student-athlete may accept additional financial aid. 5) For purposes of recruitment, "contact" is defined as any time a coach has any face-to-face contact with a student or his or her parents off the institution's campus, and when the coach "says more than hello." 6) "Verbal commitment" describes a college-bound student's commitment to an institution before he or she signs a National Letter of Intent (which is binding). Verbal commitments are not binding on either the student or the institution. ANALYSIS This bill requires a collegiate athletic recruiter to provide a written disclosure letter with specific information regarding athletic scholarships, medical expenses, and athletic release to any pupil or student (K-postsecondary) with whom the recruiter has had personal contact; and requires a scholarship offer to be made in writing within one week of a verbal offer. Specifically, this bill: Scholarship offer 1) Requires, beginning July 1, 2011, any scholarship offer made to a student athlete to be made in writing within one week of a verbal offer. AB 2079 Page 4 2) If the written offer is sent more than one year in advance of the earliest date a student athlete is authorized to sign an agreement, the athletic program is required to send a subsequent letter stating whether or not the offer is still valid, at least five months prior to the earliest signing period. 3) Requires the initial written offer and, if applicable, subsequent letter, to include at least all of the following information: a) The disclosure letter. (see below) b) Whether or not the athletic scholarship offer will expire and all terms of any such expiration. c) Whether or not the athletic program will guarantee that the student athlete's acceptance of the offer prior to any expiration will be honored. d) A description of the college's policy for awarding financial aid for summer school. e) Whether or not the student athlete will be guaranteed admission and full athletic participation at an institution if a specific academic level is achieved during the remainder of the athlete's high school career, and a description of any such academic level. f) The terms and the amount of any death benefit provided by the college in case of a sports-related death. 4) Prohibits the provisions of this bill from being construed to require a college to revise athletic scholarship contracts entered into prior to the effective date of this bill. Disclosure letter 1) Requires, beginning July 1, 2011, a collegiate athletic recruiter, within one week of any direct personal contact with a student athlete, to provide to the student in writing a disclosure letter as follows: AB 2079 Page 5 a) Athletic scholarship information (up to 250 words): i) The college's most recent cost of attendance expenses. ii) The portion of these expenses prohibited, per NCAA rules, from inclusion in a full grant-in-aid scholarship. iii) Whether the college provides athletic scholarships for summer school. iv) The average monthly scholarship payment received by students living on- and off-campus. b) Athletic scholarship renewals (up to 250 words): i) The NCAA's policy on scholarship duration. ii) The college's policies on scholarship renewal or non-renewal, including circumstances in which a student athlete in good standing suffers a temporary or permanent sports-related injury, there is a coaching change, or the athletic performance is deemed to be below expectations. c) Athletically related medical expenses (up to 500 words): i) The policies of the NCAA and college on whether athletic programs are required to pay for athletically related medical expenses. ii) The college's policy concerning who is required to pay for any required athletically related insurance premiums for student athletes who do not have such insurance. iii) The duration of time the college's AB 2079 Page 6 athletic program continues to pay for athletically related medical expenses after a student athlete's eligibility expires. iv) Whether or not an athletic program's medical policy covers expenses associated with attaining a second medical opinion, and whether the program provides coverage for services received by such a physician. d) Athletic release (up to 250 words): i) The policies of the NCAA and college on whether an athletic program may refuse to grant an athletic release to a student athlete who wishes to transfer to another college. 2) Requires any changes to policies included in the disclosure letter to be sent in writing to all student athletes, as well as any athletes currently enrolled in the institution who were recruited from the State of California. 3) Requires, beginning July 1, 2011, each interscholastic athletic program that recruits any student athlete to prominently post the disclosure letter on its official athletic Internet website. 4) Requires the recruiter to provide the above information by directing a student athlete who has not yet entered grade 11 to a disclosure letter posted on the institution's website. STAFF COMMENTS 1) Need for the bill . According to the author, "Currently, the NCAA prohibits scholarship contracts. The problem occurs when a student-athlete receives a scholarship offer from a college/university. The college/university provide scholarship offers verbally or through the National Letter of Intent. Unfortunately, neither verbal offers nor the National Letter of Intent provide all the necessary information for student-athletes to make such an important decision. For example, most scholarship offers do not provide information about AB 2079 Page 7 summer school tuition, what majors' conflict with practice schedules, coverage of medical expenses, or the time commitment required for practices schedules." 2) Applies to every California student athlete . This bill requires recruiters of any California student athlete to put any scholarship offer in writing within one week of making a verbal offer, and provide the disclose letter to that student. Therefore, any institution of higher education (IHE), whether the IHE is located in California or elsewhere, would be required to follow the provisions of this bill when recruiting California students. Will this disadvantage the recruitment of California student athletes because it establishes new requirements relative to California students that won't be required for the recruitment of students from other states? 3) Verbal vs. written scholarship offers . This bill requires any scholarship offer made to a student athlete to be made in writing within one week of a verbal offer. NCAA rules do not prohibit verbal offers from being made within the allowable timeframe. However, beginning August 1, 2010, the NCAA rules will prohibit DI colleges from offering athletic scholarships in writing until the student-athlete is in their senior year of high school. Because this bill requires a verbal offer to be followed by a written offer within one week, coupled with the new NCAA rules, DI colleges would be prohibited from making even a verbal offer until students are in the 12th grade. Will this disadvantage the early recruitment of California students? 4) Timing of disclosure . This bill requires a disclosure letter with information about athletic scholarships to be provided to a student within one week of personal contact with a collegiate athletic recruiter. However, the provision of this disclosure letter is not linked with any offer, verbal or written, of a scholarship. Staff recommends an amendment to require the disclosure letter to be provided within one week of any offer of an athletic scholarship. 5) Who is a collegiate athletic recruiter ? This bill does not define collegiate athletic recruiter. NCAA bylaws define "contact" as being a face-to-face conversation AB 2079 Page 8 with a coach. Staff recommends an amendment to define "collegiate athletic recruiter" or clarify that any person who makes any offer of an athletic scholarship must provide the disclosure letter. 6) Fiscal impact . According to the Assembly Appropriations Committee, University of California (UC) and California State University (CSU) campuses would incur costs to develop and print the materials to be provided to each recruit including regular updates as information changes, developing a mailing list, record keeping, orienting athletic recruiters to the new procedures, and assuring compliance with the bill's requirements. UC costs are estimated at $290,000 ongoing, for a full-time staff person at campuses engaged in national recruiting and a half-time person at other campuses. Start-up costs would be somewhat higher. CSU's ongoing costs, assuming a half-time position per campus for 23 campuses, would be about $575,000, again, with somewhat higher start-up costs. The above costs do not include potential litigation brought by individuals challenging UC's and CSU's compliance with the above requirements. 1) Prior and related legislation . AB 95 (Torlakson, 2009) was very similar to this bill, but was never heard. SB 193 (K. Murray, 2004) would have prohibited California IHEs from participating in any organizations that regulates student athlete scholarships, including the NCAA. SB 193 was held in the Assembly Higher Education Committee. 1) Policy Arguments . Proponents argue that there are many ways that intercollegiate athletic programs mistreat their student-athletes and mislead high school recruits. College student-athletes are subject to many injustices including being left to pay AB 2079 Page 9 sports-related medical expenses, losing their scholarships due to injury or coaching changes, and paying thousands of dollars in education-related expenses despite their "full" scholarships. Opponents contend this bill is problematic in that it attempts to change the rules and regulations set by a national entity for one specific group of student athletes based on where they reside. This bill would put California in conflict with NCAA, putting at risk the ability of our students to participate in intercollegiate sports. This bill requires written communications with students contrary to new NCAA rules effective August 1st which dictates when a written offer can be provided to a student athlete entering their senior year of high school. SUPPORT California Labor Federation Charter Oak High School Consumer Attorneys of California National College Players Association United Steelworkers, District 12 and Local #1304 Individuals OPPOSITION California State University University of California University of San Diego University of Southern California