BILL ANALYSIS
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|Hearing Date:April 5, 2010 |Bill No:SB |
| |1098 |
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SENATE COMMITTEE ON BUSINESS, PROFESSIONS
AND ECONOMIC DEVELOPMENT
Senator Gloria Negrete McLeod, Chair
Bill No: SB 1098Author:Corbett
As Introduced: February 17, 2010 Fiscal:Yes
SUBJECT: Athlete agents.
SUMMARY: Enacts the Uniform Athlete Agents Act (UAAA), which would
regulate the activities of an athlete agent in soliciting or
contracting to represent a student or professional athlete.
Existing law, the Miller-Ayala Athlete Agents Act:
1) Regulates specified activities of an athlete agent in representing
or to represent student and professional athletes.
2) Defines "agent contract" as any contract or agreement in which a
person authorizes or empowers an athlete agent to negotiate, or
solicit on behalf of the person, with one or more professional
sports teams or organizations, for the employment of the person by
one or more professional sports teams or organizations, or to
negotiate or solicit on behalf of the person for the employment of
the person as a professional athlete.
3) Defines "athlete agent" as any person who, directly or indirectly,
recruits or solicits an athlete to enter into any specified type of
contract, or for compensation procures, offers, promises, attempts,
or negotiates to obtain employment for any person with a
professional sports team or organization or as a professional
athlete.
4) Includes a talent agency as an "athlete agent" if they engage in
the activities of an athlete agent as defined.
5) Defines particular types of contracts entered into by athlete
agents on their own behalf or with others, and when persons may be
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considered as participating in negotiations to enter into a
contract.
6) Defines "student athlete" as any individual admitted to or enrolled
as a student in an elementary or secondary school, college or
university or other educational institution if the student
participates as an athlete in a sports program.
7) Requires an athlete agent to file with the Secretary of State
specified information about his or her background, criminal and
disciplinary record, training and experience, and to advise an
athlete of the availability of this information.
8) Requires an athlete agent to establish a trust fund and deposit
into it all funds received on behalf of the athlete and, if
providing financial services to the athlete, to disclose potential
conflicts of interest, as specified.
9) Imposes additional requirements pertaining to an athlete agent's
transactions with a student athlete, specifying the circumstances
under which an athlete agent may contact a student athlete, or his
or her family.
10)Requires the athlete agent to include a disclosure in a contract
with a student athlete, warning the student that he or she may lose
eligibility to compete in interscholastic or intercollegiate sports
upon entering into the contract and allowing the student athlete to
rescind the contract within 15 days.
11)Allows for civil action to recover damages resulting from a
violation and makes void any contract that fails to comply with its
requirements.
12)Requires every athlete agent to provide security for claims against
them in the amount of $100,000.
13)Makes the violation of any provisions of the Act a misdemeanor
offense.
This bill:
1)Conforms existing law regarding the regulation of athlete agents to
the UAAA on July 1, 2011, and makes the existing Miller-Ayala
Athlete Agents Act inoperative on July 1, 2011.
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2)Makes conforming changes to definitions of athlete agent, negotiate,
agent contract, student athlete and definitions regarding specified
contracts.
3)Defines "contact" as a communication, direct or indirect, between an
athlete agent and a student or professional athlete, to recruit or
solicit the student or professional athlete to enter into an agency
contract.
4)Defines "intercollegiate sport" as a sport played at the collegiate
level for which eligibility requirements for participation by a
student athlete are established by a national association for the
promotion or regulation of collegiate athletics.
5)Requires athlete agents to register with and obtain a certificate of
registration from the Department of Industrial Relations
(Department), rather than the Secretary of State and provide
specified information about his or her background, criminal and
disciplinary record, training and experience, and to advise an
athlete of the availability of this information.
6)Specifies that the agent must submit an application for registration
within seven days after an initial act as an athlete agent or a
contract resulting from violation of this requirement will be void.
7)Requires the athlete agent to disclose the fact of registration to a
student or professional athlete and where information may be
obtained regarding the agent.
8)Specifies that an application for a certificate of registration is a
public record.
9)Requires renewal of registration every two years. Creates a
registration renewal process that includes either a form prescribed
by the Department or a copy of the application for renewal and valid
certificate of registration from another state, according to certain
conditions.
10) Allows the Department to issue a temporary certificate of
registration while an application for registration or renewal or
registration is pending.
11) Specifies that the Department may suspend, revoke, or refuse to
renew a registration for conduct specified and shall provide notice
and an opportunity for a hearing in accordance with current law.
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12) Specifies what an agency contract shall state or contain with a
prominent notice to students of what the implications are to signing
the contract and voids a contract that does not conform to any other
requirements within the UAAA.
13) Provides for notice within 72 hours to the athletic director of
the educational institution upon entering into an agency contract
and the ability of the student athlete to cancel a contract within
14 days.
14) Delineates what conduct of the athlete agent would subject the
agent to criminal and civil penalties and allows a court to suspend
or revoke the registration of the agent for criminal violations as
specified.
15) Provides an educational institution with a right of action against
an athlete agent for damages caused by violation of the UAAA.
16)Allows the Department to assess a civil penalty against an athlete
agent not to exceed twenty-five thousand dollars ($25,000) for
violation of the UAAA.
17)Creates the Athlete Agent Registration Fund and allows for the
Department to establish by regulation a fee to fund the costs of the
registration program.
18)Requires athlete agents to maintain certain records.
19)Incorporates other technical and substantive provisions from the
Miller-Ayala Athlete Agents Act.
FISCAL EFFECT: Unknown. This bill is keyed "fiscal" by Legislative
Counsel.
COMMENTS:
1. Purpose. This bill is sponsored by the California Commission on
Uniform State Laws . According to the Author, "Currently there is
no state regulatory body empowered to deny or revoke an applicant's
authority to act as an athlete agent based on an evaluation of the
person's conduct to determine his or her fitness to represent
athletes." The Author also asserts that California's current law
does not conform to the UAAA, as drafted by the National
Conference of Commissioners on Uniform State Laws (NCCUSL).
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2. Miller-Ayala Athlete Agents Act. In 1996, the Senate Business and
Professions Committee Subcommittee on Sports heard testimony from
university officials and coaches, interscholastic sports governing
bodies, attorneys, and former college athletes. All of these
witnesses spoke of a growing pattern of various abusive practices
on the part of athlete agents. All emphasized that such abusive
practices have great harmful effects on the athletes and their
families and friends, their athletic programs, and their schools
generally, including alumni and fans. All decried the lack of
meaningful oversight of athlete agents, citing insufficient
penalties in current law and apparent inattention and/or inability
of any agency to take action against athlete agents.
That same year, the Miller-Ayala Athlete Agents Act was passed to
enact a comprehensive set of provisions governing the conduct and
practice of individuals who work as athlete agents. However, it
did not include a registration program but rather required filing
of information regarding the background and business practices of
the athlete agent with the Secretary of State's Office.
According to the Secretary of State Special Filing Unit, 400
athlete agents or athlete agent companies have filed information.
It is unknown whether any action has been taken against athlete
agents pursuant to this Act.
3. Uniform Athlete Agents Act (UAAA). Problems associated with
illegal athlete agent conduct are national in scope. Far too
often, the actions of athlete agents in other states result in the
loss of student-athlete eligibility, the imposition of financial
penalties on the student-athlete's institution and the taint of a
"scandal" on both the institution and the larger intercollegiate
sports community. In an effort to address these problems, the
NCCUSL began work in 1997 on developing a model state athlete agent
law. At the time, there were 28 state athlete agent laws each with
a different set of fees, bonding and registration requirements, and
a list of prohibitive acts. Many of the laws were ineffective and,
as a result, were sporadically enforced. In addition, agents
expressed frustration over the differing state regulations and the
time and costs associated with registering in many of the
jurisdictions. Many agents simply ignored most the state agent
laws and the corresponding registration requirements. After three
years of work, that included input from sports agents,
representatives of the professional sports leagues players'
associations and the NCAA, NCCUSL completed its work in drafting
the UAAA. The model law provides for important protections for
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student-athletes and educational institutions and it also seeks to
assist athlete agents by standardizing and streamlining the
regulations governing the profession.
The UAAA has been enacted in 39 states and is currently pending
enactment in at 3 states, including this measure in California.
4. Previous Legislation. This bill is virtually identical to SB 694
(Sher) of 2001 and SB 1652 (Sher) of 2002, which were both heard in
this Committee. Both measures were ultimately vetoed by then
Governor Davis. In his veto message of SB 1652, the Governor noted
that that while he was supportive of an effort to place a
regulatory program for athlete agents in the Department of
Industrial Affairs, budget constraints prevented him from being
able to sign legislation requiring a department to take on new
responsibilities.
5. Arguments in Support: According to the NCCUSL , "the UAAA provides
extremely important protections for student athletes and the
educational institution where they compete, creates a uniform body
of agent registration information for use by state agencies,
simplifies the regulatory environment faced by legitimate sports
agents and provides public and private recourse against
unscrupulous actors." The Commission further states, "While
maximizing the income of one's clients is certainly a sound
business practice, the recruitment of a student athlete while he or
she is still enrolled in an educational institution may cause
substantial eligibility or other problems for both the student and
the school."
The NCAA states that "Unprincipled agent conduct presents a
legitimate threat to the vitality of amateur athletics" and that
the "safeguards provided under the UAAA are vital for student
athletes and educational institutions."
According to the University of California Los Angeles, Department
of Intercollegiate Athletics , "Miller-Ayala has gone a long way in
helping California universities regulate agents' activities?and the
UAAA will not only provide a national consistent standard but takes
the current standard to another level."
NOTE : Double-referral to Judiciary Committee (second.)
SUPPORT AND OPPOSITION:
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Support:
California Commission on Uniform State Laws (Sponsor)
National Collegiate Athletic Association (NCAA)
National Conference of Commissioners on Uniform State Laws (NCCUSL)
University of California Los Angeles, Department of Intercollegiate
Athletics
Opposition: None on file as of March 31, 2010
Consultant:Sarah Mason