BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
1098 (Corbett)
Hearing Date: 5/3/2010 Amended: 4/20/2010
As
proposed to be amended
Consultant: Bob Franzoia Policy Vote: B,P&ED 5-2 Jud 3-1
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BILL SUMMARY: SB 1098 would delete the provisions of the
Miller-Ayala Athlete Agents Act and would enact the Uniform
Athlete Agents Act, which would regulate the activities of an
athlete agent in soliciting or contracting to represent a
student or professional athlete. This act would:
- Prohibit a person from acting as an athlete agent without a
certification of registration issued by the Department of
Industrial Relations.
- Make void a contract to represent a student or professional
athlete obtained in violation of these registration
requirements, and would make void, at the athlete's election, an
agency contract that does not conform to other provisions of the
act.
- Allow for the acceptance of registration as an athlete agent
from another state.
- Require that a contract between an athlete agent and athlete
contain specified provisions with a contract with a student
athlete containing additional provisions, including the right to
cancel the contract within 14 days and a warning that the
student may lose his or her eligibility to compete as a student
athlete.
- Require notification of an educational institution under
certain conditions.
- Provide for a civil action by an athlete or educational
institution against an athlete agent for damages resulting from
a violation of the requirements of the act.
- Require an athlete agent to establish a trust fund and deposit
into it any payment he or she receives on behalf of a
professional athlete.
- Modify conflict of interest provisions, prohibit types of
specified conduct by an athlete agent, make their commission a
misdemeanor and make violations of the act grounds for the
department to revoke or suspend an athlete agent's registration.
- Direct fees and civil penalties be deposited into the Athlete
Agent Registration Fund, which would be continuously
appropriated.
- Authorize a loan from the General Fund to the department for
startup costs to be repaid with fee revenue by July 1, 2014.
- Provide that it shall become operative on July 1, 2011.
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Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12 2012-13 Fund
Athlete agent registration Estimated $360 (loan) General*
program Up to $480 annually, fully
Special**
offset by fees
* Loan to be repaid by July 1, 2014.
** Athlete Agent Registration Fund
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STAFF COMMENTS: This bill meets the criteria for referral to the
Suspense File.
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SB 1098 (Corbett)
In 1997, the National Conference of Commissioners on Uniform
State Laws began work on developing a model state athlete agent
law in order to address the problems associated with illegal
athlete agent conduct nationwide. (According to its Web site,
for more than a century, the Uniform Law Commission (ULC) has
worked for the improvement of state laws by drafting uniform
state laws on subjects where uniformity is desirable and
practicable. It is a non-profit unincorporated association,
comprised of state commissions on uniform laws from each state,
the District of Columbia, the Commonwealth of Puerto Rico and
the U.S. Virgin Islands. The ULC is the oldest state
governmental association and is the source of more than 250
uniform acts which seek to secure uniformity of state laws where
diversity obstructs the interests of all the citizens of the
United States.)
The Secretary of State maintains a program for the filing of
information regarding the background and business practices of
athlete agent pursuant to the Miller-Ayala Athlete Agent Act.
Under the Miller Ayala Act there is no reciprocal registration
between California and other states with similar athlete agent
registration laws. This bill would implement such a
registration. As a result, the population subject to the
provisions of this bill may reside in all 50 states, and not
just California. As of May 2008, the federal Bureau of Labor
Statistics estimated that 6,860 persons were employed in the
management of the combined categories of "Agents and Business
Managers of Artists, Performers, and Athletes." California
estimates, as of the same date, include 3,580 persons identified
under the same labor market category. Approximately 400 agents
are listed with the Secretary of State pursuant to the Miller
Ayala Act.
An application for registration or renewal shall be accompanied
by a fee established by regulation sufficient to fund the costs
of administering this program and repaying the loan. All fees
and civil penalties shall be deposited into the new Athlete
Agent Registration Fund, which is continuously appropriated.
The Director of Finance shall approve a loan from the General
Fund to the department for startup costs, which shall be repaid
from the fee revenue collected. The loan shall be repaid by
July 1, 2014, with interest. Staff recommends this bill be
amended to delete the continuous appropriation in order to
maintain oversight of the new registration program.
The new licensing program is estimated to require one Industrial
Relations Representative and one Office Assistant to review
applications and to issue and renew certificates. This bill
would also require the Division of Labor Standards Enforcement
add a component to its case management system, which would
require one Associate Information Systems Analyst and software
costs. Additionally, one Deputy Labor Commissioner would be
required to conduct investigations and issue citations, and one
Industrial Relations Counsel would be required to write
regulations and conduct administrative hearings for adverse
actions on registrations for violations of the law.
This analysis assumes 300 new registrants in the first year of
operation, 400 registrants in the second year of operation and
500 (100 new and 300 renewals) registrants in the third year of
operation and uses an average annual cost of $120,000 per
personnel year. The workload will likely vary greatly between
the first, second, and third years of
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SB 1098 (Corbett)
the program, stabilizing in the fourth year and ongoing.
Assuming that the regulations make no distinction in fees
between in-state and out-of-state applications, the fee for a
two-year license would be an estimated $1,200 to $1,440 in
2010-11, 2011-12 and 2012-13 and the fee for a renewal would be
an estimated $1,120 to $1,200 in 2012-13.
The funding needed for program startup costs will vary
depending, in part, on the need for and complexity of
regulations, ease of identifying and notifying potential
registrants, and participation. Some statutory flexibility has
been granted. For example, Budget Act Control Section 14
authorizes the Director of Consumer Affairs to transfer funds to
make payments, subject to specified conditions. SB 1111
(Negrete McLeod) proposes to expand that authority (proposed BPC
720.38). Additionally, Business and Professions Code 5025.2
authorizes an increase in Board of Accountancy expenditure
authority authorized by the Department of Finance for costs and
services in urgent litigation and enforcement matters.
Because of the potential General Fund loan costs, staff
recommends this bill be amended to delay the operative date of
the bill by six months to January 1, 2012 and to authorize the
Director of Industrial Relations, upon approval of the Director
of Finance, to order the transfer of special funds sufficient to
fund startup costs. With the one time transfer authority, this
should allow sufficient registration fees to accrue to commence
program startup and eliminate the need for a General Fund loan.
The proposed amendments, similar to what is noted below, strike
penalty of perjury provisions and provide for civil penalties,
instead.
Amendment 1.
Page 7 lines 16-21:
18911. (a) An applicant for registration shall submit an
application for registration to the department in a form
prescribed by the department. Any person who knowingly provides
false information in the application required by this
subdivision shall be subject to a civil penalty in an amount up
to $50,000 dollars, in addition to any civil remedies available
to the department, including but not limited to the sanctions
provided in section 18916. An action for a civil penalty under
this provision may be brought by the department or any public
prosecutor in the name of the people of the State of California.
The application shall be in the name of an individual and,
except as otherwise provided in subdivision (b), signed or
otherwise authenticated by the applicant under penalty of
perjury and state or contain the following information: . . .
Amendment 2 .
Pages 9 lines 38-40; 10 lines 1-2:
18913. (a) An athlete agent may apply to renew a registration by
submitting an application for renewal in a form prescribed by
the department. The application for renewal shall be signed by
the applicant under penalty of perjury and contain current
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SB 1098 (Corbett)
information on all matters required in an original registration.
Any person who knowingly provides false information in the
application required by this subdivision shall be subject to a
civil penalty in an amount up to $50,000 dollars, in addition to
any civil remedies available to the department, including but
not limited to the sanctions provided in section 18916. An
action for a civil penalty under this provision may be brought
by the department or any public prosecutor in the name of the
people of the State of California.