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