BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  SB 1525
                                                                  Page  1

          Date of Hearing:   July 3, 2012

                       ASSEMBLY COMMITTEE ON HIGHER EDUCATION
                                 Marty Block, Chair
                    SB 1525 (Padilla) - As Amended:  July 2, 2012

           SENATE VOTE  :   22-14
           
          SUBJECT  :   Student Athlete Bill of Rights.

           SUMMARY  :   Enacts the Student Athlete Bill of Rights that 
          requires intercollegiate athletic programs at universities, as 
          defined, to provide scholarships to injured student athletes, 
          continue to pay specified medical expenses for a student athlete 
          who was injured, and conduct financial and life skills workshops 
          for student athletes, and clarifies the process for student 
          athletes seeking a transfer.  Specifically,  this bill  :   

          1)Applies these provisions to institutions of higher education 
            that receives $10 million or more in annual income derived 
            from media rights for intercollegiate athletics, as specified, 
            and provides that universities to which this section applies 
            shall rely exclusively on revenue derived from media rights 
            for intercollegiate athletics to defray any costs of 
            compliance with its provisions.  Under this provision, this 
            bill would apply to the Berkeley and Los Angeles campuses of 
            the University of California (UC), the University of Southern 
            California (USC), and Stanford University.

          2)Requires universities to provide the following scholarships to 
            student athletes:

             a)   An equivalent scholarship for up to five academic years 
               or until the student athlete completes his or her 
               undergraduate degree, whichever period is shorter, if an 
               athletic program does not renew an athletic scholarship of 
               a student athlete who suffers an incapacitating injury or 
               illness resulting from his or her participation in the 
               athletic program, as specified.  Clarifies that a temporary 
               leave of absence by a student does not count against the 
               five-year limit on eligibility.

             b)   An equivalent scholarship to a student athlete for up to 
               one year or until the student athlete completes his or her 
               primary undergraduate degree, whichever is shorter, if the 








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               student was on an athletic scholarship and is in good 
               standing but has exhausted his or her athletic eligibility. 
                Exempts from this provision, athletic programs with a 
               graduation success rate over 60%, as specified.

             c)   Exempts student athletes whose athletic scholarships are 
               not renewed for cause but allows a student to appeal the 
               decision at the university or within the conference or 
               association of which the university is a member, as 
               appropriate.

          3)Requires athletic programs to conduct financial and life 
            skills workshops for all of its first-year and third-year 
            student athletes, as specified, including, but not limited to, 
            information concerning financial aid, debt management, and a 
            recommended budget for full- and partial-scholarship student 
            athletes living on or off campus during the academic year and 
            the summer term based on the current academic year's cost of 
            attendance, as well as information on time management skills 
            necessary for success as a student athlete and the academic 
            resources available on campus.

          4)Requires universities to grant a student athlete the same 
            rights as other students with regard to possible adverse or 
            disciplinary actions, including actions involving 
            athletically-related financial aid.

          5)Declares that an athletic program shall respond within seven 
            business days with an answer to a student athlete's written 
            request to transfer to another institution of higher 
            education.

          6)Requires an athletic program to pay for the following:

             a)   The medical insurance premiums of each of its student 
               athletes, whose household income would qualify them for Cal 
               Grant A awards, as defined, for insurance covering claims 
               resulting from their participation in the athletic program, 
               unless a student athlete declines the payment of premiums.

             b)   The insurance deductible applicable to the claim of any 
               student athlete who suffers an injury resulting from his or 
               her participation in the athletic program. 

             c)   Either of the following for a minimum of two years from 








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               the student athlete's graduation or separation from the 
               institution of higher education for any student athlete who 
               suffers an injury resulting from his or her participation 
               in the athletic program that requires ongoing medical 
               treatment, excluding pre-existing conditions:

               i)     The necessary medical treatment, or, 

               ii)    The health insurance that covers the injury and 
                 resulting deductible amounts.

          7)Requires an athletic program adopt and implement guidelines to 
            prevent, assess, and treat sports-related concussions and 
            dehydration, as well as implement exercise and supervision 
            guidelines for any student athlete identified with potentially 
            life-threatening health conditions.

          8)Defines the following terms:

             a)   "Athletic association" means any organization that is 
               responsible for governing intercollegiate programs.

             b)   "Athletic program" means an intercollegiate athletic 
               program at any institution of higher education, as defined.

             c)   "Graduate success rate" means the percentage of student 
               athletes who graduate from that institution of higher 
               education within six years of their initial enrollment, 
               excluding outgoing transfers in good academic standing with 
               athletic eligibility remaining, and including incoming 
               transfers.  Specifies that this rate is to be calculated by 
               combining the rates of the four most recent classes that 
               are available in the exact manner as the rate is calculated 
               under the National Collegiate Athletics Association (NCAA) 
               rules.

             d)   "Institution of higher education" means any UC campus or 
               campus of the California State University (CSU), or any 
               four-year private university located in California that 
               maintains an intercollegiate athletic program.

             e)   "Media rights" means rights to the live coverage, 
               tape-delayed coverage, and postevent footage use of 
               athletic games, practices, and interviews; royalties for 
               the use of a player's likeness or uniform, signage, or 








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               other sponsorships; and luxury box sales.

             f)   "Student athlete" means any college student who 
               participates in an intercollegiate athletic program of an 
               institution of higher education, and includes student 
               athletes who participate in basketball, football, and other 
               intercollegiate sports.

          9)Commences these provisions with the 2013-14 academic year.

          10)Makes numerous legislative findings and declarations.

          11)Sunsets these provisions on January 1, 2021.

           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 to participate in intercollegiate sporting 
            activities.  Some exceptions may be granted in accordance with 
            NCAA rules.  A person who violates these rules are subject to 
            a civil penalty of up to $10,000, or three times the amount 
            given, offered or promised, whichever is greater.  (Education 
            Code § 67360)

          2)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)

          3)Requires California postsecondary educational institutions 
            that offer athletic scholarships to provide specific 
            information on its website, such as NCAA policy on scholarship 
            duration, the most recent cost of attendance, and their policy 
            on athletically related medical expenses.  (EC § 67365)

           FISCAL EFFECT  :   According to the Senate Appropriations 
          Committee analysis prior to the most recent amendments, this 
          bill will result in the following costs:  

          1)UC:  Potentially significant cost pressure on the UCLA and UC 
            Berkeley campus budgets to backfill any reduction of support 








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            for activities that currently receive financial support from 
            media rights revenues. 

          2)CSU:  CSU does not believe that any of its campuses currently 
            meet the threshold for this bill to apply but projects that 
            San Diego State University will in the near future, resulting 
            in increased annual costs of $500,000 at that time.  

          3)Financial aid programs:  Potential state savings, to the 
            extent that former student-athletes are extended scholarships 
            paid for by media rights funds, instead of being entitled to, 
            or competing for, state and institutional aid upon losing an 
            athletic scholarship.  

           COMMENTS  :   This bill was approved by the Arts, Entertainment, 
          Sports, Tourism, and Internet Media Committee on June 26, 2012, 
          by a vote of 5-1, as proposed to be amended with the language 
          that was amended into this bill on July 2.

           Need for this bill  .  According to the author, "Current law only 
          requires that institutions of higher education post information 
          related to athletic financial aid, cost of attendance, the cost 
          of medical expenses, who holds the responsibility to pay for 
          medical expenses and transfer policies.  NCAA regulations 
          provide universities with a significant amount of discretion in 
          how they protect student-athletes.  Universities choose not to 
          renew a scholarship annually from year to year at will.  
          Similarly, university and NCAA medical insurance only kicks in 
          after the student-athlete's insurance is exhausted.  Lastly, 
          there is little governing the due process and transfer rights 
          for student-athletes, allowing universities to give 
          student-athletes fewer rights than the student general body."

           Affected students  .  As noted previously, the provisions of this 
          bill would apply only to universities with annual media revenues 
          of $10 million or more-UC Berkeley, UCLA, USC, and Stanford, 
          with San Diego State University likely to meet this threshold in 
          the near future.  These universities enroll 2,500 of the state's 
          12,500 student athletes enrolled in Division I- or Division 
          II-eligible institutions.  They note that the scholarship, 
          transfer, and insurance/medical coverage provisions of this bill 
          are consistent with their existing practices.

           Recent amendments and NCAA rules  .  The NCAA is a voluntary 
          association of about 1,200 colleges and universities, athletic 








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          conferences, and sports organizations that administer 
          intercollegiate athletics.  Volunteer representatives from these 
          schools and conferences establish rules that govern the NCAA and 
          programs designed to further its purposes and goals.  

          The affected universities raised significant concerns that some 
          provisions were inconsistent with NCAA rules.  Recent 
          amendments, accepted in the Arts Committee and now in print, 
          addressed the universities' concerns about provisions related to 
          the ability of student athletes to transfer to competitor 
          institutions, medical coverage for injured student athletes, and 
          equivalent scholarships for student athletes. 

           Relevant NCAA rules  .

          1)Length of athletic eligibility.  NCAA eligibility rules 
            require student athletes, among other things, to take a 
            certain number of units each year, maintain a minimum grade 
            point average, and make progress toward their degree.  
            Division I student athletes are allowed five years to graduate 
            while receiving athletically related financial aid.  This bill 
            requires some universities to provide an equivalent 
            scholarship to a student athlete who has used his or her 
            eligibility, but that scholarship is not an athletic 
            scholarship nor does it enable a student athlete to compete 
            beyond NCAA eligibility timelines.

          2)Existing medical coverage.  NCAA rules require each student 
            athlete to be covered by individual, parental or institutional 
            medical insurance prior to competing in interscholastic 
            athletics.  Universities are authorized to provide medical 
            insurance; coverage varies from campus to campus.  

          3)NCAA catastrophic insurance program.  Among other things, the 
            NCAA Catastrophic Insurance Program provides:  

             a)   College education benefit provides payment of the full 
               standard cost of attendance for a totally disabled person 
               to complete his or her undergraduate and/or graduate 
               degree.  The disabled person must recommence studies within 
               five years and complete the degree within 20 years.  The 
               maximum lifetime college education benefit is $120,000.

             b)   Vocational rehabilitation benefit provides payment for 
               expenses incurred for services rendered through a 








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               vocational rehabilitation program or counseling services to 
               enable the person to develop skills necessary for gainful 
               employment and to participate in a job search and find 
               gainful employment.  The maximum lifetime vocational 
               rehabilitation benefit is $60,000.

             c)   Maximum benefit per person per accident, for all 
               benefits combined is $20 million.

             d)   Custodial care maximum is $100,000 per calendar year.

             e)   Home health care maximum is $100,000 per calendar year.

             f)   Combined home and custodial is $100,000, increasing by 
               $10,000 on the 10th anniversary of the accident and on each 
               subsequent 10th anniversary.

             g)   Private duty nursing maximum is $250,000 per calendar 
               year.

             h)   Combined private duty nursing, custodial and home health 
               is $250,000.

             i)   Total disability benefit is $300 each month for up to 12 
               months, and $2,000 each month thereafter ($2,000 monthly 
               benefit increases by 4% after the $2,000 benefit has been 
               paid for 12 consecutive months.

             j)   Partial disability maximum benefit is $1,500 each month, 
               increasing by 4% after the benefit has been paid for 12 
               consecutive months.  The benefit is to be reduced by  of 
               the after-tax monthly compensation earned by the insured 
               person in excess of $1,000 per month.

             aa)  Adjustment expense benefit maximum is $50,000 lifetime 
               (training family to perform rehabilitative or custodial 
               functions, travel for family, loss of earnings by injured 
               person's spouse or parent, and family counseling.

             bb)  Special expense benefit for special items approved by 
               the person's doctor to accommodate his or her physical 
               disability, such as home or automobile modifications.  
               Benefits are limited to:

               i)     $125,000 during the first 10 years.








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               ii)    $50,000 for years 10-20.

               iii)   $60,000 for years 20-30.

               iv)    $75,000 for years 30-40.

           Related legislation  .  AB 1743 (Campos), Chapter 16, Statutes of 
          2012, clarified that the online scholarship disclosures required 
          of a California postsecondary educational institution only apply 
          to institutions that offer athletic scholarships to student 
          athletes.  AB 2079 (Torlakson), Chapter 592, Statutes of 2010, 
          provided that all California postsecondary educational 
          institutions that offer athletic scholarships are required to 
          provide specified scholarship information on their websites.  

           REGISTERED SUPPORT / OPPOSITION  :

           Support 
           
          None on file.
           
            Opposition 
           
          None on file.


           Analysis Prepared by  :    Sandra Fried / HIGHER ED. / (916) 
          319-3960