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 18, 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. (See two paragraphs below.)
2) 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.
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
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
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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.
ANALYSIS
This bill requires public and private four-year
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
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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
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.
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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
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
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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
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
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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.
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
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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
rate under 60%. In most cases, this number goes even
lower when using the United States Department of
Education's statistics."
2) Author's amendments . The author would like to amend
this bill as follows:
a) Apply scholarship provisions of the bill to
all student athletes whose athletic scholarship
has not been renewed (expanded from just football
and basketball players) and:
i) Who have been injured.
ii) Whose athletic eligibility has
expired.
b) The scholarship would be provided for at
most 6 years, until the student graduates or is
otherwise no longer enrolled at that university,
whichever period is shorter.
c) Prohibits a temporary leave of absence from
counting against a student athlete's eligibility
for the scholarship pursuant to this bill.
d) Provides that the scholarship provisions
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apply to universities with at least $10 million
in media rights revenue and a graduation rate in
any sport of 60% or lower.
e) Narrow provisions relative to medical
expenses to require athletic programs to be
responsible for the insurance premiums and
deductibles of its low-income student athletes,
and deductibles for student athletes who are not
low-income.
The medical coverage provisions apply to universities
with at least $10 million in media rights
revenue.
The determination that an injury resulted from
participation in an athletic program is to be
made by a neutral third party medical
professional.
Limits this coverage to 5 years after the date of the
injury.
f) Apply transfer provisions to all student
athletes, rather than just football or basketball
players.
g) Strike provisions relative to a State Trust
Fund and funding formula.
h) Specify that universities are to use revenue
derived from media rights to fund the
scholarships and medical expenses pursuant to
this bill.
3) Scholarship not based on financial need . This bill
provides a scholarship for some athletes that is not
afforded to athletes who have not received an athletic
scholarship, nor students who are not athletes.
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?
4) Length of athletic eligibility . NCAA eligibility
rules require student athletes, among other things, to
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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
5 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.
5) 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.
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 University of Southern California reviews
permanent/career-ending injuries on a case-by-case
basis and may offer a medical athletic scholarship for
the identical time frame and financial aid level for a
period corresponding to one bachelor's degree (16 unit
minimum per semester). If offered a medical athletic
scholarship, the student-athlete must work the same
work hours and regime as a student-athlete that has
exhausted eligibility.
6) 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
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totally disabled person to complete his or her
undergraduate and/or graduate degree. The
disabled person must recommence studies within 5
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 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
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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.
ii) $50,000 for years 10-20.
iii) $60,000 for years 20-30.
iv) $75,000 for years 30-40.
7) 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
(mid-academic year).
8) 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 (for current version of bill)
None on file.
OPPOSITION (for current version of bill)
Stanford University
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