BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 1098|
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UNFINISHED BUSINESS
Bill No: SB 1098
Author: Corbett (D)
Amended: 6/22/10
Vote: 21
SENATE BUS, PROF. & ECON. DEV. COMMITTEE : 5-2, 4/5/10
AYES: Negrete McLeod, Calderon, Correa, Oropeza, Yee
NOES: Aanestad, Walters
NO VOTE RECORDED: Wyland, Florez
SENATE JUDICIARY COMMITTEE : 3-1, 4/13/10
AYES: Corbett, Hancock, Leno
NOES: Walters
NO VOTE RECORDED: Harman
SENATE APPROPRIATIONS COMMITTEE : 7-3, 5/27/10
AYES: Kehoe, Alquist, Corbett, Leno, Price, Wolk, Yee
NOES: Denham, Walters, Wyland
NO VOTE RECORDED: Cox
SENATE FLOOR : 23-12, 6/1/10
AYES: Alquist, Calderon, Cedillo, Corbett, Correa,
DeSaulnier, Ducheny, Florez, Hancock, Kehoe, Leno, Liu,
Lowenthal, Negrete McLeod, Padilla, Pavley, Price,
Romero, Simitian, Steinberg, Wolk, Wright, Yee
NOES: Aanestad, Ashburn, Cogdill, Cox, Denham, Dutton,
Harman, Hollingsworth, Huff, Runner, Strickland, Wyland
NO VOTE RECORDED: Oropeza, Walters, Wiggins, Vacancy,
Vacancy
ASSEMBLY FLOOR : 51-23, 8/23/10 - See last page for vote
CONTINUED
SB 1098
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SUBJECT : Athlete agents
SOURCE : California Commission on Uniform State Laws
DIGEST : This bill enacts the Uniform Athlete Agents Act
which regulates the activities of an athlete agent in
soliciting or contracting to represent a student or
professional athlete.
Assembly Amendments make technical nonsubstantive changes.
ANALYSIS :
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 considered as participating in
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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/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:
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1.Conforms existing law regarding the regulation of
athlete agents to the Uniform Athlete Agents Act (UAAA)
on July 1, 2011, and makes the existing Miller-Ayala
Athlete Agents Act inoperative on July 1, 2011.
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
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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.
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 a professional athlete, student athlete or
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. Specifies
this penalty shall become operative on January 1, 2012.
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.
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19.Incorporates other technical and substantive provisions
from the Miller-Ayala Athlete Agents Act.
Background
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.
Uniform Athlete Agents Act . 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
National Conference of Commissioners on Uniform State Laws
(NCCUSL) began work in 1997 on developing a model state
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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 National Collegiate Athletic
Association (NCAA), NCCUSL completed its work in drafting
the UAAA. The model law provides for important protections
for 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 three states, including this
measure in California.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
According to the Senate Appropriations Committee analysis:
Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12
2012-13 Fund
Athlete agent Estimated $360
(loan) Special*
registration program Up to
$480 annually, Special**
fully offset by fees
* Loan from the Labor Enforcement and Compliance Fund to be
repaid by July 1, 2014.
** Athlete Agent Registration Fund
SUPPORT : (Verified 8/23/10)
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California Commission on Uniform State Laws (source)
Association of Talent Agents
California State University, San Diego
National Collegiate Athletic Association
Uniform Law Commission
University of California Los Angeles, Department of
Intercollegiate
Athletics
University of California
OPPOSITION : (Verified 8/23/10)
Department of Industrial Relations
ARGUMENTS IN SUPPORT : According to the National
Conference of Commissioners on Uniform State Laws, "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 National Collegiate Athletic Association 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."
ASSEMBLY FLOOR :
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AYES: Ammiano, Arambula, Bass, Beall, Bill Berryhill,
Block, Blumenfield, Bradford, Brownley, Buchanan,
Caballero, Charles Calderon, Carter, Chesbro, Coto,
Davis, De La Torre, De Leon, Eng, Evans, Feuer, Fong,
Galgiani, Gatto, Hagman, Hall, Hayashi, Hernandez, Hill,
Huber, Huffman, Jones, Lieu, Bonnie Lowenthal, Ma,
Mendoza, Monning, Nava, V. Manuel Perez, Portantino,
Ruskin, Salas, Saldana, Skinner, Smyth, Solorio, Swanson,
Torlakson, Torres, Torrico, John A. Perez
NOES: Adams, Anderson, Tom Berryhill, Conway, Cook, DeVore,
Fletcher, Fuller, Gaines, Garrick, Gilmore, Harkey,
Jeffries, Knight, Logue, Miller, Nestande, Niello,
Nielsen, Norby, Audra Strickland, Tran, Villines
NO VOTE RECORDED: Fuentes, Furutani, Silva, Yamada,
Vacancy, Vacancy
JJA:do 8/24/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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