BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  SB 238
                                                                  Page  1

          Date of Hearing:   July 6, 2011

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

                   SB 238 (De Leon) - As Amended:  April 13, 2011 

          Policy Committee:                              
          JudiciaryVote:10-0 (Consent)
                        Arts                                    9-0

          Urgency:     No                   State Mandated Local Program: 
          No     Reimbursable:               

           SUMMARY  

          This bill requires, rather than authorizes, courts to suspend 
          athlete agents who violate provisions of the Miller-Ayala 
          Athlete Agents Act.  Specifically, this bill:

          1)Requires the court to suspend for a minimum of one year, or 
            where appropriate, revoke the person's privilege to conduct 
            business as an athlete agent if the person is convicted of a 
            violation of the Act.

          2)Requires the court to order an athlete agent to disgorge all 
            consideration received in connection with a violation of the 
            Act, and specifies the distribution of all fines and disgorged 
            monies surrendered as a result of a violation of the Act.

           FISCAL EFFECT  

          Potential minor state General Fund and local revenue due to the 
          disgorgement requirement.

           COMMENTS  

           1)Background  . The Miller-Ayala Athlete Agents Act (Chapter 857, 
            Statutes of 1996) enacted a comprehensive set of provisions 
            governing the conduct and practice of individuals working as 
            athlete agents. Rather than establishing a registration 
            program, whereby athlete agents would be required to submit 
            and renew an application with the state, the Act simply 
            requires the filing of information regarding the background 
            and business practices of the athlete agent with the Secretary 








                                                                  SB 238
                                                                  Page  2

            of State. According to the Secretary's Special Filing Unit, 
            469 agents or agent companies have filed information. 
            Violations of the Act are misdemeanors, subject to a fine of 
            up to $50,000 and/or imprisonment in county jail for up to one 
            year. The court may also suspend or revoke a person's 
            privilege to conduct business as an athlete agent.

           2)Purpose  . This bill, sponsored by the Los Angeles City 
            Attorney, enhances penalties for violations of the Act. The 
            author notes that more than half of the 42 states that have 
            implemented athlete agent laws have never revoked the license 
            of an agent found guilty of misconduct.  As such, agents who 
            commit misconduct are still allowed to practice and 
            potentially to continue targeting student athletes who may not 
            know of an agent's of the illegality of the agent's past 
            actions.  By imposing a mandatory minimum one year suspension 
            for any agent or agent's representative found guilty of 
            violating the law, this bill seeks to remove unscrupulous 
            agents from practice.  This suspension, in addition to the 
            bill's financial penalties is aimed at deterring improper 
            conduct before it starts.

            According to the sponsor, "Unscrupulous agents thrive on 
            exploiting the financial circumstances of student-athletes, 
            encouraging them to accept financial incentives.  The current 
            penalties afforded by the existing law are too lenient, when 
            weighed against the significant damage that may result from an 
            agent's illegal practices."

           3)Prior Legislation  . SB 1098 (Corbett) of 2010, which would have 
            replaced the Miller-Ayala Act with the Uniform Athlete Agent 
            Act, as adopted by the National Conference of Commissioners on 
            Uniform State Laws, and in part required athlete agents to 
            register with the state, was vetoed by Governor 
            Schwarzenegger.
           
           Analysis Prepared by  :    Chuck Nicol / APPR. / (916) 319-2081