BILL ANALYSIS �
SENATE COMMITTEE ON EDUCATION
Alan Lowenthal, Chair
2011-2012 Regular Session
BILL NO: SB 1525
AUTHOR: Padilla
AMENDED: March 27, 2012
FISCAL COMM: Yes HEARING DATE: April 11, 2012
URGENCY: No CONSULTANT: Lynn Lorber
SUBJECT : Student Athlete Bill of Rights.
SUMMARY
This bill requires public and private four-year
universities that do not renew a student's athletic
scholarship to provide an equivalent scholarship to that
student, requires an athletic program to be responsible for
medical expenses of its student athletes resulting from
their participation in the athletic program, and
establishes a trust fund into which institutions of higher
education that receive at least $10 million in annual
revenue from media rights for intercollegiate athletics
contribute funds.
BACKGROUND
Current law:
1) Beginning January 1, 2012, requires California
postsecondary educational institutions that offer
athletic scholarships to provide specific information
on its website, such as the National Collegiate
Athletic Association (NCAA) policy on scholarship
duration, the most recent cost of attendance, and the
policy on athletically related medical expenses.
(Education Code � 67365)
2) 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
(IHE) to participate in intercollegiate sporting
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activities. Some exceptions may be granted in
accordance with National Collegiate Athletic
Association (NCAA) rules. (EC � 67360)
3) Subjects a person who violates these rules to a civil
penalty of up to $10,000, or three times the amount
given, offered or promised, whichever is greater. (EC
� 67360)
4) 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)
The NCAA adopted bylaws that regulate recruiting,
scholarship levels, timing and methods of communication
between institutions of higher education (IHEs) and student
athletes. Rules governing Division I, II and III IHEs are
not necessarily the same across divisions. Currently, NCAA
bylaws impose a number of restrictions on student athlete
financial assistance. For example, NCAA
Division 1 schools:
1) Cannot guarantee scholarships for more than one
academic year.
2) Cannot finance student health insurance if the
insurance is provided or offered to the general
student body only on an optional basis.
3) Cannot award financial aid to a student athlete that
exceeds the cost of attendance that normally is
incurred by students enrolled in a comparable program
at that institution.
4) Must include earnings from the student athlete's
employment during semester or term time to determine
whether a full grant-in-aid is reached and can only
allow $2,000 in earnings over a full grant-in-aid
award, as defined.
The NCAA recently adopted several new rules that have not
yet been implemented, including granting the authority for
Division I schools to offer multi-year athletic
scholarships and a $2,000 stipend, and increased academic
standards (minimum grade point average and academic
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progress rate).
The 2011-12 Guide for the College-Bound Student-Athlete,
and other links on the NCAA's website, provides information
about several aspects of becoming a collegiate athlete,
including athletically related financial aid and recruiting
regulations. Specifically:
1) Athletic scholarships in Divisions I and II are
initially awarded for up to one academic year, and may
be renewed annually for up to five years (D-I) or up
to a total of 10 semesters/15 quarters (D-II).
Division III institutions do not award athletic
financial aid.
2) Athletic scholarships can be renewed, reduced,
increased or canceled from year to year for almost any
reason.
3) Athletic scholarships are awarded in a variety of
amounts.
4) The total amount of financial aid a student-athlete
can receive may be limited, and may affect whether a
student-athlete may accept additional financial aid.
Each student-athlete must be covered by individual,
parental or institutional medical insurance prior to
competing in interscholastic athletics. Universities are
authorized to provide medical insurance. The University of
California (UC) administers the Student Health Insurance
Plan that covers athletic injuries only at the San Diego
and Santa Barbara campuses, while coverage for athletes at
other UC campuses varies. The California State University
Risk Management Authority administers the Athletic Injury
Medical Expense, which provides secondary coverage for
medical expenses from athletic injuries not paid by the
student's primary insurance. The NCAA provides a
Catastrophic Injury Insurance Program that covers student
athletes, coaches and cheerleaders who are catastrophically
injured while participating in a "covered event" (for
medical bills over $90,000).
ANALYSIS
This bill requires public and private four-year
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universities that do not renew an athletic scholarship to
provide an equivalent scholarship, requires an athletic
program to be responsible for medical expenses of its
student athletes resulting from their participation in the
athletic program, and establishes a trust fund into which
institutions of higher education that receive at least ten
million dollars in annual revenue from media rights for
intercollegiate athletics contribute funds. Specifically,
this bill:
Scholarship, Transfer, Workshop and Medical Expenses
1) Requires, beginning with the 2013-14 academic year, an
intercollegiate athletic program at any campus of the
University of California, California State University,
or private four-year university in California to:
a) Provide to students whose athletic
scholarship is not renewed, an equivalent
scholarship (when combined with the total
duration of any previous athletic or other
scholarship received by the student) for a total
of at least five years or until the student
completes his or her undergraduate degree,
whichever period is shorter.
b) Promptly approve a qualifying
student athlete's written request to transfer to
another institution without actively or passively
imposing any restrictions or condition.
Implementation must include granting other
institutions permission to contact the student
athlete and waiving residency requirements, as
permitted by athletic association rules.
c) Conduct a financial and life
skills workshop for all of its first- and
third-year student athletes at the beginning of
the academic year. The workshop must include
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. The workshop must also
include information on time management skills
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necessary for success as a student athlete, and
academic resources available on campus.
d) Grant a student athlete the same
rights as other students with regard to any and
all matters related to possible adverse or
disciplinary actions, including actions involving
his or her participation in the athletic program.
2) Requires an athletic program to be responsible for any
and all medical expenses of its student athletes
resulting from their participation in the
athletic program, irrespective of whether the student
athlete is still in school, has graduated or no longer
enrolled in the school so long as the medical expenses
result from the student athlete's participation in the
athletic program.
3) Requires an athletic program to adopt and implement
guidelines to prevent, assess, and treat
sports-related concussions and dehydration, and
exercise and supervision guidelines for any student
athlete identified with potentially life-threatening
health conditions who participates in an athletic
program.
State Trust Fund
4) Establishes the State Trust Fund under the
administration an executive board consisting of the
following members:
a) The Controller, who is to serve as the
presiding officer of the board.
b) A representative of the University of
California (UC), appointed by
and serving at the pleasure of the UC Regents.
c) A representative of the California State
University (CSU), appointed
by and serving at the pleasure of the CSU
Trustees.
d) The President of the Association of the
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Independent California
Colleges and Universities, or his or her
designee.
e) A representative of the public, appointed by
and serving at the
pleasure of the Governor.
5) Requires an intercollegiate athletic program at any
campus of the University of California, California
State University, or private four-year university in
California that receives, as an average, at least $10
million in annual revenue from media rights for
intercollegiate athletics to pay to the State Trust
Fund an annual fee that is the sum of the following:
a) An amount equal to 25% of the most
expensive cost of attendance among the
universities, as determined by the Controller,
multiplied by the total number of football and
basketball student athletes who receive an
athletic scholarship at that university, and
b) An amount that equals the athletic
scholarship shortfall, as determined by the
Controller, plus interest based on each year's
unsubsidized federal Stafford Loan interest rate,
multiplied by the total number of football and
basketball student athletes who receive an
athletic scholarship at any point during the
academic year at that university. The Controller
is to adjust this amount annually for inflation
according to the Consumer Price Index.
6) Requires universities to set aside an amount equal to
(b) above exclusively for achieving compliance with
the gender equity requirements of Title IX. This
set-aside would not be required if the executive board
of the State Trust Fund determines the university is
in compliance with Title IX for four consecutive
years.
7) Requires the executive board of the State Trust Fund
to make public the amount of fees collected from each
athletic program and submit a detailed report to the
Governor and Legislature by August 1, 2014 and every
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August 1 every three years thereafter.
8) Requires each university to pay all fees by June 1 of
each academic year beginning June 1, 2013, and pay a
late fee of $15,000 for each calendar day the payment
is late. Late fees are to be paid directly to the
State Trust Fund and subsequently distributed evenly
among the eligible fund recipients (student athletes)
whose funds are put at risk due to a late payment.
9) Requires a separate account to be established in the
State Trust Fund for depositing the fees paid by each
university.
10) Requires the State Trust Fund to return funds to the
appropriate university if the Controller does not
encumber the funds and the funds are not used within
two years of the annual fee deadline (June 1).
11) Provides that an institution that receives less than
$10 million in annual income from media rights is not
required to contribute to the State Trust Fund if it
submits a request for waiver to the executive board.
The executive board must grant the waiver, which is to
remain valid unless and until the Controller
determines that the $10 million threshold is met. The
Controller is required to periodically review the
media rights arrangements for institutions.
Miscellaneous
12) Authorizes an athletic program to dismiss a student
athlete from participation in the program for cause,
in which case the student is prohibited from receiving
benefits pursuant to this bill but may apply to the
executive board for reinstatement to eligibility for
those benefits.
13) Defines several terms, including:
a) "Athletic scholarship shortfall" as the
difference between an
institution's cost of attendance and the sum of
all grant-in-aid athletic scholarship, plus any
stipend, excluding summer school, preseason,
postseason, tournament and expense payments.
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b) "Institution of higher education" as any
campus of the University of
California, California State University, or any
four-year private university located in
California, that maintains an intercollegiate
athletic program.
c) "Qualifying student athlete" as a student
athlete who participates in
either basketball or football and who is in
compliance with athletic program academic and
conduct standards.
d) "Student athlete" as 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.
14) Sunsets its provisions on January 1, 2021.
STAFF COMMENTS
1) Need for the bill . According to the author,
"According to the United States Department of
Education, California's twelve thousand student
athletes in Division I and Division II schools helped
generate over $687 million dollars in income in 2010
alone. However, the future for most student athletes
is far from certain. Due to NCAA rules and a lack of
state law, universities often neglect to pay for the
medical care of injured student athletes.
Additionally, universities can choose to not renew an
injured student athlete's scholarship. Saddling a
student with medical bills and taking away
scholarships can easily push a student out of college.
While the NCAA reports a nationwide overall
'graduation success rate' of over 80%, this does not
truly reflect the disparities among individual
campuses and programs. Using the NCAA's methodology,
17 of California's 24 Division I schools have at least
one intercollegiate sport with a graduation success
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rate under 60%. In most cases, this number goes even
lower when using the United States Department of
Education's statistics."
2) Scholarship . This bill provides a scholarship for
football and basketball players that is not afforded
to athletes participating in other sports, athletes in
any sport who have not received an athletic
scholarship, nor students who are not athletes. NCAA
rules prohibit universities from guaranteeing athletic
scholarships for more than one academic year.
Beginning January 1, 2012, universities in California
that offer athletic scholarships are required to post
on their websites information that includes the NCAA's
policy on scholarship duration, cost of attendance,
and the policy on athletically related medical
expenses. CalGrants are provided for up to four years
(except for teacher credential and mandatory five-year
programs) to students who maintain academic and income
eligibility. Should students who have received an
athletic scholarship (who should have known the
limitations of that type of aid) also benefit from an
additional scholarship that is not based on financial
need for which no other population of student is
eligible?
Staff recommends amendments to strike provisions relative
to the scholarship and instead require funds to be put
into the pool of institutional aid that is available
to all financially needy students.
3) Universities that pay into trust fund . This bill
requires universities that receive at least $10
million in annual revenue from media rights to pay a
fee into the State Trust Fund. The author would like
to limit the scope of this bill to universities with
graduation rates at or below 60%, disaggregated by
sport (any four-year university that generates at
least $10 million in media rights with a graduation
rate of 60% or below in any
sport). Staff recommends this amendment as well as
amendments to direct these funds back into
institutional aid rather than into a State Trust Fund.
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4) How much will universities pay into trust fund ? This
bill establishes a two-pronged formula to determine
the fee to be paid by each campus that is based on the
most expensive cost of attendance and the number of
football and basketball student athletes on athletic
scholarship. Information provided by the author
indicates that currently the most expensive cost of
attendance is at the University of Southern California
($42,818). Pursuant to the formulas established in
this bill, campuses would pay an annual fee of
$10,704.50 multiplied by the number of football and
basketball scholarships plus the scholarship shortfall
formula, for a combined total of approximately $21.7
million to be deposited in the State Trust Fund
annually (generally at least a few hundred thousand
dollars per campus).
5) Medical coverage for life . This bill requires
universities to be responsible for any and all medical
expenses of its student athletes (in any sport)
resulting from their participation in the athletic
program, irrespective of whether the student athlete
is still in school, has graduated or no longer
enrolled in the school so long as the medical expenses
result from the student athlete's participation in the
athletic program. Staff recommends amendments to
instead require medical coverage if a student's
athletic scholarship is not renewed because the
student is injured, and the student is in need of
medical coverage, for total of four years or upon the
student's graduation or disenrollment from that
university.
6) Transfer and residency . NCAA rules generally prohibit
communication between student athletes and athletic
programs at other universities. Students may transfer
but cannot have any agreement with the other
university about athletic competition or scholarship.
This bill requires athletic programs to promptly
approve a football or basketball player's request to
transfer, including granting permission to other
universities to contact the students. The author
wishes to extend this provision to all student
athletes. Staff recommends this amendment.
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This bill also requires the approval of requests to
transfer to include waiving residency requirements as
permitted by NCAA rules. Those rules, among other
things, restrict a student athlete's eligibility to
compete if the student transfer; some rules are
different for football and basketball players. For
example, if a student athlete signs a National Letter
of Intent (NLI) with a university and transfers within
the first academic year, the NLI is unfulfilled and
therefore the student is not eligible to compete at
the new university for one year and loses a year of
eligibility in all sports. The NCAA rules may be
waived in certain situations; this bill requires the
residency rules to be waived upon a student athlete's
request to transfer.
The residency provisions in this bill relate only to a
student athlete's eligibility to compete and does not
affect residency for the determination of whether a
student pays in-state or out-of-state tuition.
7) Waiver of payment . This bill applies to universities
with annual revenues from media rights of at least $10
million, and exempts universities with less revenue if
those universities submit a waiver request to the
Controller. It would be less cumbersome for
universities and the Controller's office if
universities with media rights revenue of less than
$10 million were simply exempt. Staff recommends this
amendment.
8) Sunset . This bill includes a sunset date of January
1, 2021. Presumably, any benefits provided pursuant
to this bill to a student at the time of the sunset
would simply cease being provided on January 1, 2021.
9) Prior legislation . SB 193 (K. Murray, 2004) would
have prohibited California universities from
participating in any organization that regulates
student athlete scholarships, including the NCAA. SB
193 was held in the Assembly Higher Education
Committee.
SUPPORT
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None on file.
OPPOSITION
None on file.