4th Engrossment - 82nd Legislature (2001 - 2002) Posted on 12/15/2009 12:00am
1.1 A bill for an act 1.2 relating to higher education; providing for 1.3 registration of agents of student athletes; defining 1.4 terms; providing penalties and remedies; appropriating 1.5 money; proposing coding for new law as Minnesota 1.6 Statutes, chapter 81A. 1.7 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.8 Section 1. [81A.01] [SHORT TITLE.] 1.9 Sections 81A.01 to 81A.21 may be cited as the Uniform 1.10 Athlete Agents Act. 1.11 Sec. 2. [81A.02] [DEFINITIONS.] 1.12 Subdivision 1. [TERMS.] For purposes of sections 81A.01 to 1.13 81A.21, the terms defined in this section have the meanings 1.14 given them. 1.15 Subd. 2. [AGENCY CONTRACT.] "Agency contract" means an 1.16 agreement in which a student athlete authorizes a person to 1.17 negotiate or solicit on behalf of the student athlete a 1.18 professional sports services contract or an endorsement contract. 1.19 Subd. 3. [ATHLETE AGENT.] "Athlete agent" means an 1.20 individual who enters into an agency contract with a student 1.21 athlete or, directly or indirectly for remuneration, recruits or 1.22 solicits a student athlete to enter into an agency contract. 1.23 The term includes an individual who represents to the public 1.24 that the individual is an athlete agent. The term does not 1.25 include a spouse, parent, sibling, grandparent, or guardian of 1.26 the student athlete or an individual acting solely on behalf of 2.1 a professional sports team or professional sports organization. 2.2 Subd. 4. [ATHLETIC DIRECTOR.] "Athletic director" means an 2.3 individual responsible for administering the overall athletic 2.4 program of an educational institution or, if an educational 2.5 institution has separately administered athletic programs for 2.6 male students and female students, the athletic program for 2.7 males or the athletic program for females, as appropriate. 2.8 Subd. 5. [COMMISSIONER.] "Commissioner" means the 2.9 commissioner of commerce. 2.10 Subd. 6. [CONTACT.] "Contact" means a communication, 2.11 direct or indirect, between an athlete agent and a student 2.12 athlete, to recruit or solicit the student athlete to enter into 2.13 an agency contract. 2.14 Subd. 7. [ENDORSEMENT CONTRACT.] "Endorsement contract" 2.15 means an agreement under which a student athlete is employed or 2.16 receives consideration to use on behalf of the other party any 2.17 value that the student athlete may have because of publicity, 2.18 reputation, following, or fame obtained because of athletic 2.19 ability or performance. 2.20 Subd. 8. [INTERCOLLEGIATE SPORT.] "Intercollegiate sport" 2.21 means a sport played at the collegiate level for which 2.22 eligibility requirements for participation by a student athlete 2.23 are established by a national association for the promotion or 2.24 regulation of collegiate athletics. 2.25 Subd. 9. [PERSON.] "Person" means an individual, 2.26 corporation, business trust, estate, trust, partnership, limited 2.27 liability company, association, or joint venture; government, 2.28 governmental subdivision, agency, or instrumentality; public 2.29 corporation; or any other legal or commercial entity. 2.30 Subd. 10. [PROFESSIONAL SPORTS SERVICES CONTRACT.] 2.31 "Professional sports services contract" means an agreement under 2.32 which an individual is employed, or agrees to render services, 2.33 as a player on a professional sports team, with a professional 2.34 sports organization, or as a professional athlete. 2.35 Subd. 11. [RECORD.] "Record" means information that is 2.36 inscribed on a tangible medium or that is stored in an 3.1 electronic or other medium and is retrievable in perceivable 3.2 form. 3.3 Subd. 12. [REGISTRATION.] "Registration" means 3.4 registration as an athlete agent under sections 81A.01 to 81A.21. 3.5 Subd. 13. [STATE.] "State" means a state of the United 3.6 States, the District of Columbia, Puerto Rico, the United States 3.7 Virgin Islands, or any territory or insular possession subject 3.8 to the jurisdiction of the United States. 3.9 Subd. 14. [STUDENT ATHLETE.] "Student athlete" means an 3.10 individual who engages in, is eligible to engage in, or may be 3.11 eligible in the future to engage in any intercollegiate sport. 3.12 If an individual is permanently ineligible to participate in a 3.13 particular intercollegiate sport, the individual is not a 3.14 student athlete for purposes of that sport. 3.15 Sec. 3. [81A.03] [SERVICE OF PROCESS; INVESTIGATING 3.16 POWERS.] 3.17 Subdivision 1. [APPOINTMENT OF AGENT.] By acting as an 3.18 athlete agent in this state, a nonresident individual appoints 3.19 the commissioner as the individual's agent for service of 3.20 process in any civil action in this state related to the 3.21 individual's acting as an athlete agent in this state. 3.22 Subd. 2. [SUBPOENA AND ENFORCEMENT POWERS.] The 3.23 commissioner may issue subpoenas for any material that is 3.24 relevant to the administration of sections 81A.01 to 81A.21 and 3.25 exercise other enforcement powers available to the commissioner 3.26 under chapter 45. 3.27 Sec. 4. [81A.04] [CERTIFICATE OF REGISTRATION REQUIRED.] 3.28 Subdivision 1. [GENERAL REQUIREMENT.] Except as otherwise 3.29 provided in subdivision 2, an individual may not act as an 3.30 athlete agent in this state without holding a certificate of 3.31 registration under section 81A.06 or 81A.08. 3.32 Subd. 2. [EXCEPTIONS.] Before being issued a certificate 3.33 of registration, an individual may act as an athlete agent in 3.34 this state for all purposes except signing an agency contract, 3.35 if: 3.36 (1) a student athlete or another person acting on behalf of 4.1 the student athlete initiates communication with the individual; 4.2 and 4.3 (2) within seven days after an initial act as an athlete 4.4 agent, the individual submits an application for registration as 4.5 an athlete agent in this state. 4.6 Subd. 3. [CONTRACTS VOID.] An agency contract resulting 4.7 from conduct in violation of this section is void, and the 4.8 athlete agent shall return any consideration received under the 4.9 contract. 4.10 Sec. 5. [81A.05] [REGISTRATION PROCESS.] 4.11 Subdivision 1. [REQUIREMENTS.] An applicant for 4.12 registration shall submit an application for registration to the 4.13 commissioner in a form prescribed by the commissioner. The 4.14 application must be in the name of an individual and, except as 4.15 otherwise provided in subdivision 2, signed or otherwise 4.16 authenticated by the applicant under penalty of perjury, and 4.17 state or contain: 4.18 (1) the name of the applicant and the address of the 4.19 applicant's principal place of business; 4.20 (2) the name of the applicant's business or employer, if 4.21 applicable; 4.22 (3) any business or occupation engaged in by the applicant 4.23 for the five years next preceding the date of submission of the 4.24 application; 4.25 (4) a description of the applicant's: 4.26 (i) formal training as an athlete agent; 4.27 (ii) practical experience as an athlete agent; and 4.28 (iii) educational background relating to the applicant's 4.29 activities as an athlete agent; 4.30 (5) the names and addresses of three individuals not 4.31 related to the applicant who are willing to serve as references; 4.32 (6) the name, sport, and last known team for each 4.33 individual for whom the applicant acted as an athlete agent 4.34 during the five years next preceding the date of submission of 4.35 the application; 4.36 (7) the names and addresses of all persons who are: 5.1 (i) with respect to the athlete agent's business if it is 5.2 not a corporation, the partners, members, officers, managers, 5.3 associates, or profit-sharers of the business; and 5.4 (ii) with respect to a corporation employing the athlete 5.5 agent, the officers, directors, and any shareholder of the 5.6 corporation having an interest of five percent or greater; 5.7 (8) whether the applicant or any person named under clause 5.8 (7) has been convicted of a crime that, if committed in this 5.9 state, would be a crime involving moral turpitude or a felony, 5.10 and identify the crime; 5.11 (9) whether there has been any administrative or judicial 5.12 determination that the applicant or any person named under 5.13 clause (7) has made a false, misleading, deceptive, or 5.14 fraudulent representation; 5.15 (10) any instance in which the conduct of the applicant or 5.16 any person named under clause (7) resulted in the imposition of 5.17 a sanction, suspension, or declaration of ineligibility to 5.18 participate in an interscholastic or intercollegiate athletic 5.19 event on a student athlete or educational institution; 5.20 (11) any sanction, suspension, or disciplinary action taken 5.21 against the applicant or any person named under clause (7) 5.22 arising out of occupational or professional conduct; and 5.23 (12) whether there has been any denial of an application 5.24 for, suspension or revocation of, or refusal to renew, the 5.25 registration or licensure of the applicant or any person named 5.26 under clause (7) as an athlete agent in any state. 5.27 Subd. 2. [RECIPROCAL APPLICATIONS OR CERTIFICATES.] An 5.28 individual who has submitted an application for, and holds a 5.29 certificate of, registration or licensure as an athlete agent in 5.30 another state may submit a copy of the application and 5.31 certificate in lieu of submitting an application in the form 5.32 prescribed under subdivision 1. The commissioner must accept 5.33 the application and the certificate from the other state as an 5.34 application for registration in this state if the application to 5.35 the other state: 5.36 (1) was submitted in the other state within six months next 6.1 preceding the submission of the application in this state and 6.2 the applicant certifies that the information contained in the 6.3 application is current; 6.4 (2) contains information substantially similar to or more 6.5 comprehensive than that required in an application submitted in 6.6 this state; and 6.7 (3) was signed by the applicant under penalty of perjury. 6.8 Sec. 6. [81A.06] [ISSUANCE OF CERTIFICATE OF 6.9 REGISTRATION.] 6.10 Subdivision 1. [AUTHORITY.] Except as otherwise provided 6.11 in subdivision 2, the commissioner must issue a certificate of 6.12 registration to an individual who complies with section 81A.05, 6.13 subdivision 1, or whose application has been accepted under 6.14 section 81A.05, subdivision 2. 6.15 Subd. 2. [REFUSAL.] (a) The commissioner may refuse to 6.16 issue a certificate of registration if the commissioner 6.17 determines that the applicant has engaged in conduct that has a 6.18 significant adverse effect on the applicant's fitness to act as 6.19 an athlete agent. In making the determination, the commissioner 6.20 may consider whether the applicant has: 6.21 (1) been convicted of a crime that, if committed in this 6.22 state, would be a crime involving moral turpitude or a felony; 6.23 (2) made a materially false, misleading, deceptive, or 6.24 fraudulent representation in the application or as an athlete 6.25 agent; 6.26 (3) engaged in conduct that would disqualify the applicant 6.27 from serving in a fiduciary capacity; 6.28 (4) engaged in conduct prohibited by section 81A.14; 6.29 (5) had a registration or licensure as an athlete agent 6.30 suspended, revoked, or denied or been refused renewal of 6.31 registration or licensure as an athlete agent in any state; 6.32 (6) engaged in conduct the consequence of which was that a 6.33 sanction, suspension, or declaration of ineligibility to 6.34 participate in an interscholastic or intercollegiate athletic 6.35 event was imposed on a student athlete or educational 6.36 institution; or 7.1 (7) engaged in conduct that significantly adversely 7.2 reflects on the applicant's credibility, honesty, or integrity. 7.3 (b) In making a determination under paragraph (a), the 7.4 commissioner shall consider: 7.5 (1) how recently the conduct occurred; 7.6 (2) the nature of the conduct and the context in which it 7.7 occurred; and 7.8 (3) any other relevant conduct of the applicant. 7.9 Subd. 3. [RENEWALS.] An athlete agent may apply to renew a 7.10 registration by submitting an application for renewal in a form 7.11 prescribed by the commissioner. The application for renewal 7.12 must be signed by the applicant under penalty of perjury and 7.13 must contain current information on all matters required in an 7.14 original registration. 7.15 Subd. 4. [RECIPROCAL RENEWALS.] An individual who has 7.16 submitted an application for renewal of registration or 7.17 licensure in another state, in lieu of submitting an application 7.18 for renewal in the form prescribed under subdivision 3, may file 7.19 a copy of the application for renewal and a valid certificate of 7.20 registration or licensure from the other state. The 7.21 commissioner must accept the application for renewal from the 7.22 other state as an application for renewal in this state if the 7.23 application to the other state: 7.24 (1) was submitted in the other state within six months next 7.25 preceding the filing in this state and the applicant certifies 7.26 the information contained in the application for renewal is 7.27 current; 7.28 (2) contains information substantially similar to or more 7.29 comprehensive than that required in an application for renewal 7.30 submitted in this state; and 7.31 (3) was signed by the applicant under penalty of perjury. 7.32 Subd. 5. [TERM.] A certificate of registration or a 7.33 renewal of a registration is valid for two years. 7.34 Sec. 7. [81A.07] [SUSPENSION, REVOCATION, OR REFUSAL TO 7.35 RENEW REGISTRATION.] 7.36 Subdivision 1. [AUTHORITY.] The commissioner may suspend, 8.1 revoke, or refuse to renew a registration for conduct that would 8.2 have justified denial of registration under section 81A.06, 8.3 subdivision 2. 8.4 Subd. 2. [NOTICE AND HEARING REQUIREMENTS.] The 8.5 commissioner may deny, suspend, revoke, or refuse to renew a 8.6 certificate of registration or licensure only under chapter 14. 8.7 Sec. 8. [81A.08] [TEMPORARY REGISTRATION.] 8.8 The commissioner may issue a temporary certificate of 8.9 registration while an application for registration or renewal of 8.10 registration is pending. 8.11 Sec. 9. [81A.09] [REGISTRATION AND RENEWAL FEES.] 8.12 An application for registration must be accompanied by a 8.13 $500 fee. An application for renewal of registration must be 8.14 accompanied by a $400 fee. 8.15 Sec. 10. [81A.10] [FORM OF CONTRACT.] 8.16 Subdivision 1. [REQUIRED AUTHENTICATION.] An agency 8.17 contract must be in a record, signed or otherwise authenticated 8.18 by the parties. 8.19 Subd. 2. [CONTENTS.] An agency contract must state or 8.20 contain: 8.21 (1) the amount and method of calculating the consideration 8.22 to be paid by the student athlete for services to be provided by 8.23 the athlete agent under the contract and any other consideration 8.24 the athlete agent has received or will receive from any other 8.25 source for entering into the contract or for providing the 8.26 services; 8.27 (2) the name of any person not listed in the application 8.28 for registration or renewal of registration who will be 8.29 compensated because the student athlete signed the agency 8.30 contract; 8.31 (3) a description of any expenses that the student athlete 8.32 agrees to reimburse; 8.33 (4) a description of the services to be provided to the 8.34 student athlete; 8.35 (5) the duration of the contract; and 8.36 (6) the date of execution. 9.1 Subd. 3. [NOTICE.] An agency contract must contain, in 9.2 close proximity to the signature of the student athlete, a 9.3 conspicuous notice in boldface type in capital letters stating: 9.4 WARNING TO STUDENT ATHLETE 9.5 IF YOU SIGN THIS CONTRACT: 9.6 (1) YOU MAY LOSE YOUR ELIGIBILITY TO COMPETE AS A STUDENT 9.7 ATHLETE IN YOUR SPORT; 9.8 (2) IF YOU HAVE AN ATHLETIC DIRECTOR, WITHIN 72 HOURS AFTER 9.9 ENTERING INTO THIS CONTRACT, BOTH YOU AND YOUR ATHLETE AGENT 9.10 MUST NOTIFY YOUR ATHLETIC DIRECTOR; AND 9.11 (3) YOU MAY CANCEL THIS CONTRACT WITHIN 14 DAYS AFTER 9.12 SIGNING IT. CANCELLATION OF THIS CONTRACT MAY NOT REINSTATE 9.13 YOUR ELIGIBILITY. 9.14 Subd. 4. [VOIDABILITY.] An agency contract that does not 9.15 conform to this section is voidable by the student athlete. If 9.16 a student athlete voids an agency contract, the student athlete 9.17 is not required to pay any consideration under the contract or 9.18 to return any consideration received from the athlete agent to 9.19 induce the student athlete to enter into the contract. 9.20 Subd. 5. [RECORD TO STUDENT ATHLETE.] The athlete agent 9.21 shall give a record of the signed or otherwise authenticated 9.22 agency contract to the student athlete at the time of execution. 9.23 Sec. 11. [81A.11] [NOTICE TO EDUCATIONAL INSTITUTION.] 9.24 Subdivision 1. [BY ATHLETE AGENT.] Within 72 hours after 9.25 entering into an agency contract or before the next scheduled 9.26 athletic event in which the student athlete may participate, 9.27 whichever occurs first, the athlete agent must give notice in a 9.28 record of the existence of the contract to the athletic director 9.29 of the educational institution at which the student athlete is 9.30 enrolled or at which the athlete agent has reasonable grounds to 9.31 believe the student athlete intends to enroll. 9.32 Subd. 2. [BY STUDENT ATHLETE.] Within 72 hours after 9.33 entering into an agency contract or before the next athletic 9.34 event in which the student athlete may participate, whichever 9.35 occurs first, the student athlete must inform the athletic 9.36 director of the educational institution at which the student 10.1 athlete is enrolled that he or she has entered into an agency 10.2 contract. The commissioner has no enforcement authority with 10.3 respect to a violation of this subdivision by a student athlete. 10.4 Sec. 12. [81A.12] [STUDENT ATHLETE'S RIGHT TO CANCEL.] 10.5 Subdivision 1. [GENERALLY.] A student athlete may cancel 10.6 an agency contract by giving notice of the cancellation to the 10.7 athlete agent in a record within 14 days after the contract is 10.8 signed. 10.9 Subd. 2. [NONWAIVABILITY.] A student athlete may not waive 10.10 the right to cancel an agency contract. 10.11 Subd. 3. [EFFECT.] If a student athlete cancels an agency 10.12 contract, the student athlete is not required to pay any 10.13 consideration under the contract or to return any consideration 10.14 received from the athlete agent to induce the student athlete to 10.15 enter into the contract. 10.16 Sec. 13. [81A.13] [REQUIRED RECORDS.] 10.17 Subdivision 1. [RETENTION.] An athlete agent must retain 10.18 the following records for a period of five years: 10.19 (1) the name and address of each individual represented by 10.20 the athlete agent; 10.21 (2) any agency contract entered into by the athlete agent; 10.22 and 10.23 (3) any direct costs incurred by the athlete agent in the 10.24 recruitment or solicitation of a student athlete to enter into 10.25 an agency contract. 10.26 Subd. 2. [INSPECTION RIGHTS.] Records required by 10.27 subdivision 1 to be retained are open to inspection by the 10.28 commissioner during normal business hours. 10.29 Sec. 14. [81A.14] [PROHIBITED CONDUCT.] 10.30 Subdivision 1. [CONDUCT INTENDED TO INDUCE A STUDENT 10.31 ATHLETE TO ENTER INTO AN AGENCY CONTRACT.] An athlete agent, 10.32 with the intent to induce a student athlete to enter into an 10.33 agency contract, may not: 10.34 (1) give any materially false or misleading information or 10.35 make a materially false promise or representation; 10.36 (2) furnish anything of value to a student athlete before 11.1 the student athlete enters into the agency contract; or 11.2 (3) furnish anything of value to any individual other than 11.3 the student athlete or another registered athlete agent. 11.4 Subd. 2. [OTHER INTENTIONAL CONDUCT.] An athlete agent may 11.5 not intentionally: 11.6 (1) initiate contact with a student athlete unless 11.7 registered under sections 81A.01 to 81A.21; 11.8 (2) refuse or fail to retain or permit inspection of the 11.9 records required to be retained by section 81A.13; 11.10 (3) fail to register when required by section 81A.04; 11.11 (4) provide materially false or misleading information in 11.12 an application for registration or renewal of registration; 11.13 (5) predate or postdate an agency contract; or 11.14 (6) fail to notify a student athlete before the student 11.15 athlete signs or otherwise authenticates an agency contract for 11.16 a particular sport that the signing or authentication may make 11.17 the student athlete ineligible to participate as a student 11.18 athlete in that sport. 11.19 Subd. 3. [MISCONDUCT OF ATHLETE AGENTS.] An athlete agent 11.20 must not violate section 325E.33. 11.21 Sec. 15. [81A.15] [CRIMINAL PENALTIES.] 11.22 An athlete agent who violates section 81A.14 is guilty of a 11.23 gross misdemeanor. 11.24 Sec. 16. [81A.16] [CIVIL REMEDIES.] 11.25 Subdivision 1. [PRIVATE RIGHT OF ACTION BY EDUCATIONAL 11.26 INSTITUTION.] An educational institution has a right of action 11.27 against an athlete agent or a former student athlete for damages 11.28 caused by a violation of sections 81A.01 to 81A.21. In an 11.29 action under this section, the court may award costs and 11.30 reasonable attorney's fees. 11.31 Subd. 2. [DAMAGES.] Damages of an educational institution 11.32 under subdivision 1 include losses and expenses incurred 11.33 because, as a result of the conduct of an athlete agent or 11.34 former student athlete, the educational institution was injured 11.35 by a violation of sections 81A.01 to 81A.21 or was penalized, 11.36 disqualified, or suspended from participation in athletics by a 12.1 national association for the promotion and regulation of 12.2 athletics, by an athletic conference, or by reasonable 12.3 self-imposed disciplinary action taken to mitigate sanctions 12.4 likely to be imposed by such an organization. 12.5 Subd. 3. [ACCRUAL OF ACTION.] A right of action under this 12.6 section does not accrue until the educational institution 12.7 discovers, or by the exercise of reasonable diligence would have 12.8 discovered, the violation by the athlete agent or former student 12.9 athlete. 12.10 Subd. 4. [SEVERAL LIABILITY.] Any liability of the athlete 12.11 agent or the former student athlete under this section is 12.12 several and not joint. 12.13 Subd. 5. [OTHER RIGHTS, REMEDIES, OR DEFENSES.] Sections 12.14 81A.01 to 81A.21 do not restrict rights, remedies, or defenses 12.15 of any person under law or equity. 12.16 Sec. 17. [81A.17] [ADMINISTRATIVE PENALTY.] 12.17 The commissioner may assess a civil penalty against an 12.18 athlete agent not to exceed $25,000 for a violation of sections 12.19 81A.01 to 81A.21, in accordance with chapters 14 and 45. 12.20 Sec. 18. [81A.18] [UNIFORMITY OF APPLICATION AND 12.21 CONSTRUCTION.] 12.22 In applying and construing this uniform act, consideration 12.23 must be given to the need to promote uniformity of the law with 12.24 respect to its subject matter among states that enact it. 12.25 Sec. 19. [81A.19] [ELECTRONIC SIGNATURES IN GLOBAL AND 12.26 NATIONAL COMMERCE ACT.] 12.27 Sections 81A.01 to 81A.21 governing the legal effect, 12.28 validity, or enforceability of electronic records or signatures, 12.29 and of contracts formed or performed with the use of such 12.30 records or signatures are intended to conform to the 12.31 requirements of section 102 of the Electronic Signatures in 12.32 Global and National Commerce Act, Public Law Number 106-229, 114 12.33 Stat. 464 (2000), and supersede, modify, and limit the 12.34 Electronic Signatures in Global and National Commerce Act. 12.35 Sec. 20. [81A.20] [SEVERABILITY.] 12.36 If any provision of sections 81A.01 to 81A.21 or its 13.1 application to any person or circumstance is held invalid, the 13.2 invalidity does not affect other provisions or applications of 13.3 sections 81A.01 to 81A.21 which can be given effect without the 13.4 invalid provision or application, and to this end the provisions 13.5 of sections 81A.01 to 81A.21 are severable. 13.6 Sec. 21. [81A.21] [EFFECT ON OTHER LAW.] 13.7 Sections 81A.01 to 81A.21 do not limit the applicability of 13.8 section 325E.33. 13.9 Sec. 22. [APPROPRIATION.] 13.10 $30,000 is appropriated from the general fund in fiscal 13.11 year 2003 to the commissioner of commerce for purposes of this 13.12 act. The general fund base in fiscal year 2004 is $21,000, and 13.13 in fiscal year 2005 is $22,000. 13.14 Sec. 23. [EFFECTIVE DATE.] 13.15 Sections 1 to 22 are effective January 1, 2003.