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.
(c) This article does not restrict rights, remedies or
defenses under the common law.
(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.
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