hb2539 intr

H. B. 2539

(By Delegate Webb)

[Introduced February 26, 2001; referred to the

Committee on Government Organization then the Judiciary.]

A BILL to amend chapter forty-seven of the code of West Virginia, one thousand nine hundred thirty-one, as amended, by adding thereto a new article, designated article three, relating to creating the uniform athlete agents act; definitions; secretary of state to administer act; registration of athlete agents; issuance, renewal and revocation of certificate of registration; registration fee; liability insurance required; form of contract; notice to educational institution; student-athlete's right to cancel contract; prohibited acts; record keeping; civil remedies; administrative and criminal penalties.

Be it enacted by the Legislature of West Virginia:

That chapter forty-seven of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended by adding thereto a new article, designated article three, to read as follows:
ARTICLE 3. UNIFORM ATHLETE AGENTS ACT.
§47-3-1. Short title.

This article may be cited as the "Uniform Athlete Agents Act."
§47-3-2. Definitions.

(a) "Athlete agent" means an individual who enters into an agency contract with a student-athlete or who, directly or indirectly, contacts, recruits, or solicits a student-athlete to enter into an agency contract, a professional sports-services contract, or an endorsement contract. The term does not include an individual acting solely on behalf of a professional sports team or organization or an individual acting solely for his or her spouse, child, grandchild or ward.

(b) "Agency contract" means an agreement in which a student-athlete authorizes a person to negotiate or solicit on behalf of the student-athlete a professional sports-services contract or an endorsement contract.

(c) "Athletic director" means an individual responsible for administering the overall athletic program of an educational institution.

(d) "Contact" means a communication, directly or indirectly, between an athlete agent and a student-athlete, to induce or attempt to induce a student-athlete to enter into an agency contract, professional sports-services contract or endorsement contract.

(e) "Endorsement contract" means a contract under which a student-athlete is employed or receives remuneration to utilize on behalf of the other contracting party any value or utility that the student-athlete may have because of publicity, reputation, following or fame obtained because of athletic ability or performance.

(f) "Person" means an individual; corporation; business trust; estate; trust; partnership; limited liability company; association; joint venture; government; governmental subdivision, agency or instrumentality; public corporation; or any other legal or commercial entity.

(g) "Professional sports-services contract" means a contract under which a student-athlete is employed or agrees to render services as a player on a professional sports team or organization or as a professional athlete.

(h) "Registration" means registration as an athlete agent pursuant to this article.

(i) "State" means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States.

(j) "Student-athlete" means an individual who engages in, is eligible to engage in, or may be eligible in the future to engage in, any intercollegiate sport. An individual is not a student-athlete if the individual is ineligible to participate in a particular sport unless:

(1) The individual's eligibility to participate in that particular sport is restored; or

(2) The individual is eligible to engage in, or may be eligible in the future to engage in, a different intercollegiate sport, in which case the individual is a student-athlete for purposes of the different sport.
§47-3-3. Administration.

The secretary of state shall administer this article.
§47-3-4. Registration of athlete agents required.

(a) Except as otherwise provided in subsection (b) of this section, an individual may not act as an athlete agent in this state, or contact a student-athlete who is attending or has expressed a written intention to attend an educational institution in this state, before registering with the secretary of state.

(b) An individual who is not registered as an athlete agent in this state may contact a student-athlete if:

(1) The student-athlete or an individual on behalf of the student-athlete initiates communication with the individual; and

(2) Within seven days after the contact made by the individual in response to the student-athlete's initiation of communication, the individual files an application to register as an athlete agent in this state.

(c) An agency contract resulting from an act in violation of this section is void and no individual owes any money or other consideration under the contract. The athlete agent shall return any money or other consideration received under the contract.
§47-3-5. Registration as athlete agent.

(a) An applicant for registration as an athlete agent shall submit a written application for registration to the secretary of state on a form prescribed by the secretary of state. Except as otherwise provided in subsection (b) of this section, the application must state or contain:

(1) The name of the applicant and the address of the applicant's principal place of business;

(2) The name of the applicant's firm or employer;

(3) Any business or occupation engaged in by the applicant for the five years next preceding the date of submission of the application;

(4) A description of the applicant's:

(i) Formal training;

(ii) Practical experience; and

(iii) Educational background relating to the applicant's activities as an athlete agent;

(5) The names and addresses of three individuals who can provide references;

(6) The name, sport and last known team of all individuals represented by the applicant as an athlete agent during the five years next preceding the date of submission of the application;

(7) The names and addresses of all persons who have a financial interest in the operation of the business of the applicant as an athlete agent including partners, associates or profit-sharers, but not including employees on fixed salaries;

(8) Any crime, other than a minor traffic offense, of which the applicant has been convicted;

(9) Any administrative or judicial determination that the applicant has made a false, misleading, deceptive or fraudulent representation as an athlete agent;

(10) Any instance in which the actions of the applicant resulted in the imposition of a sanction, suspension or declaration of ineligibility to participate in an interscholastic or intercollegiate athletic event on a student-athlete or educational institution;

(11) Any sanction or disciplinary action taken against the applicant arising out of misconduct in his or her occupation or profession;

(12) Any denial of an application or suspension, revocation or refusal to renew the applicant's registration as an athlete agent in any state; and

(13) The applicant's signature under penalty of perjury.

(b) An individual who has filed an application to be an athlete agent in another state, in lieu of filing an application in this state, may file a copy of the application from the other state.

The secretary of state shall accept the application from the other state as an application for registration in this state if the application from the other state:

(1) Was filed in the other state within the next preceding six months or the applicant certifies the information contained in the application is current; and

(2) Contains information substantially similar to or more detailed than that required in an application filed in this state.
§47-3-6. Issuance, denial, suspension, revocation of, or refusal to renew certificate of registration.

(a) The secretary of state shall issue a certificate of registration to an individual who has complied with subsection (b), section five of this article and submits satisfactory proof that the individual is licensed or registered in the state in which the application submitted pursuant to subsection (b), section five was filed and the secretary of state determines the requirements for licensure or registration in the other state are substantially similar to or more stringent that those of this state.

(b) Except as otherwise provided in subsection (c) of this section, the secretary of state shall issue a certificate of registration to an individual who complies with subsection (a), section five of this article.

(c) The secretary of state may refuse to issue a certificate of registration if the secretary of state determines that the applicant has engaged in conduct that has a significant adverse impact on the applicant's credibility, honesty or integrity and ability to serve as an athlete agent. In making the determination, the secretary of state may consider whether the applicant has:

(1) Been convicted of a crime which, if committed in this state, would be a felony or a misdemeanor involving moral turpitude;

(2) Knowingly made a materially false, misleading, deceptive or fraudulent representation as an athlete agent or in the application;

(3) Engaged in acts that would disqualify the applicant from serving in a fiduciary capacity;

(4) Committed any act prohibited by section fifteen of this article;

(5) Had a registration suspended, revoked or denied or been refused renewal of registration in any state; or

(6) Taken action that resulted in the imposition of a sanction, suspension or declaration of ineligibility to participate in an interscholastic or intercollegiate athletic event on a student-athlete or educational institution.

(d) In making a determination under subsection (c) of this section, the secretary of state shall consider:

(1) The period between the conduct and the application;

(2) The nature of the conduct and the context in which it occurred; and

(3) Any activity of the applicant since the conduct which demonstrates that the conduct is unlikely to recur.
§47-3-7. Renewal.

(a) An athlete agent may apply to renew a registration by filing an application for renewal in a form prescribed by the secretary of state.

(b) An individual who has filed an application of renewal in another state, in lieu of filing an application for renewal in this state, may file a copy of the application for renewal from the other state.

The secretary of state shall accept the application for renewal from the other state as an application for renewal in this state if:

(1) The application from the other state was filed in the other state within the next preceding six months or the applicant certifies the information contained in the application is current; and

(2) The application for renewal from the other state contains information substantially similar to or more detailed than that required in an application for renewal filed in this state.
§47-3-8. Suspension, revocation or refusal to renew registration.

The secretary of state may suspend, revoke or refuse to renew a registration for any reason that would have justified denial of a registration under subsection (c), section six of this article.
§47-3-9. Temporary registration.

The secretary of state may issue a temporary certificate of registration while considering an application for registration or renewal.
§47-3-10. Registration fee.

An application for registration or renewal of registration must be accompanied by a fee in the following amount:

(1) One hundred dollars for an initial application for registration;

(2) One hundred dollars for an application for registration based upon a certificate of registration issued by another state;

(3) Fifty dollars for an application for renewal of registration; or

(4) Fifty dollars for an application for renewal based upon an application for renewal filed in another state.
§47-3-11. Liability insurance.

(a) An application for registration must be accompanied by evidence of errors and omissions liability insurance applicable to the activities of an athlete agent in the amount of one hundred thousand dollars or equivalent security.

(b) If an athlete agent fails to provide evidence of errors and omissions liability insurance or equivalent security to the secretary of state within thirty days after receipt of a notice of cancellation issued by an insurer, the secretary of state shall suspend the certificate of registration issued to that athlete agent until the athlete agent provides evidence of errors and omissions liability insurance or equivalent security.
§47-3-12. Form of contract.

(a) An agent contract must be in writing, signed by the student-athlete and, if the student-athlete is a minor, by a parent or guardian of the student-athlete, and a copy must be furnished to the student-athlete at the time of signing.

(b) An agency contract must state or contain:

(1) The amount and method of calculating the consideration to be paid by the student-athlete for services to be provided by the athlete agent under the contract and any other consideration the athlete agent has received from any other source for obtaining the contract or will receive for providing the contractual services;

(2) The name of any person not listed in the application for registration who will receive a portion of the compensation;

(3) A description of the services to be furnished to which the student-athlete agrees to reimburse;

(4) A description of the services to be furnished to the student-athlete; and

(5) The duration of the contract.

(c) An agency contract must contain, in close proximity to the signature for the student-athlete, a conspicuous notice in boldface type in capital letters stating:

WARNING TO STUDENT-ATHLETE: IF YOU SIGN THIS CONTRACT, YOU WILL LOSE YOUR ELIGIBILITY TO COMPETE IN YOUR SPORT. BOTH YOU AND YOUR ATHLETE AGENT ARE REQUIRED TO TELL YOUR ATHLETIC DIRECTOR IF YOU SIGN THIS CONTRACT. IF YOU SIGN, YOU MAY CANCEL THIS CONTRACT WITHIN 14 DAYS AFTER SIGNING IT. CANCELLATION OF THE CONTRACT MAY NOT REINSTATE YOUR ELIGIBILITY.

(d) An agency contract that does not conform to this section is voidable by the student-athlete.
§47-3-13. Notice to educational institution.

(a) Within seventy-two hours after entering into an agency contract or before the student-athlete participates in the next scheduled athletic event, whichever comes first, the athlete agent shall give written notice of the existence of the contract to the athletic director of the educational institution at which the student-athlete is enrolled or the athlete agent has reasonable grounds to believe the student-athlete intends to enroll.

(b) Within seventy-two hours after entering into an agency contract or before the student-athlete participates in the next athletic event, whichever occurs first, the student-athlete shall inform the athletic director of the educational institution at which the student-athlete is enrolled that he or she has entered into an agency contract.
§47-3-14. Student-athlete's right to cancel.

(a) A student-athlete may cancel an agency contract by giving written notice to the athlete agent of the cancellation within fourteen days after the contract is signed.

(b) A student-athlete may not waive the right to cancel an agency contract.

(c) If a student-athlete cancels an agency contract, the student-athlete is not obligated to pay any consideration to the athlete agent and the student-athlete is not required to return anything of value received from the agent to induce the signing of the contract.
§47-3-15. Prohibited acts.

(a) An athlete agent may not do any of the following to induce a student-athlete to enter into an agency contract:

(1) Give any false or misleading information or make a false promise or representation;

(2) Furnish anything of value or benefit to a student-athlete before signing an agency contract with the student-athlete; or

(3) Furnish anything of value or benefit to any individual other than the student-athlete before signing the agency contract with the student-athlete.

(b) An athlete agent may not:

(1) Postdate any agency contract, professional sports-services contract or endorsement contract;

(2) Do business as an athlete agent without complying with this article;

(3) Contact a student-athlete before being registered under this article; or

(4) Refuse or willfully fail to maintain or permit inspection of the records required by section sixteen of this article.
§47-3-16. Record keeping.

(a) An athlete agent shall maintain a copy of any agency contract entered into between the athlete agent and a student-athlete for a period of five years.

(b) Information required by subsection (a) of this section to be maintained is open to inspection by the secretary of state during normal business hours.
§47-3-17. Civil remedies.

(a) An athlete agent who violates this article is liable for damages caused by the violation and for reasonable attorney's fees.

(b) Damages of an educational institution include damages incurred because, as a result of the activities of an athlete agent, the educational institution was penalized, disqualified or suspended from participation in athletics by a national association for the promotion and regulation of athletics, by an athletic conference, or by reasonable, self-imposed disciplinary action to mitigate sanctions.

(d) A claim under this section does not accrue until the educational institution discovers or by the exercise of reasonable diligence would have discovered the alleged violation by the athlete agent.
§47-3-18. Administrative penalty.

The secretary of state may assess a civil penalty not to exceed twenty-five thousand dollars for a violation of this article.
§47-3-19. Criminal penalty.

A person convicted of violating the provisions of section fifteen of this article is guilty of a misdemeanor and, upon conviction thereof, shall be fined not more than ten thousand dollars, or imprisoned in the county or regional jail not more than one year, or both fined and imprisoned.

NOTE: The purpose of this bill is to provide for the registration and regulation of sports agents who represent collegiate student athletes in professional contract negotiations.

This article is new; therefore, strike-throughs and underscoring have been omitted.