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