S-1235

AN ACT Relating to athlete agents; adding a new chapter to Title 18 RCW; prescribing penalties; and providing an effective date.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. SHORT TITLE. This chapter may be cited as the Uniform Athlete Agents Act.

NEW SECTION. Sec. 2. DEFINITIONS. In this chapter:

(1) "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.

(2) "Athlete agent" means an individual who enters into an agency contract with a student-athlete or, directly or indirectly, recruits or solicits a student-athlete to enter into an agency contract. The term does not include a spouse, parent, sibling, grandparent, or guardian of the student-athlete or an individual acting solely on behalf of a professional sports team or professional sports organization. The term includes an individual who represents to the public that the individual is an athlete agent.

(3) "Athletic director" means an individual responsible for administering the overall athletic program of an educational institution or, if an educational institution has separately administered athletic programs for male students and female students, the athletic program for males or the athletic program for females, as appropriate.

(4) "Contact" means a communication, direct or indirect, between an athlete agent and a student-athlete, to recruit or solicit the student-athlete to enter into an agency contract.

(5) "Department" means the department of licensing.

(6) "Endorsement contract" means an agreement under which a student-athlete is employed or receives consideration to use on behalf of the other party any value that the student-athlete may have because of publicity, reputation, following, or fame obtained because of athletic ability or performance.

(7) "Intercollegiate sport" means a sport played at the collegiate level for which eligibility requirements for participation by a student-athlete are established by a national association for the promotion or regulation of collegiate athletics.

(8) "Licensure" means licensure as an athlete agent pursuant to this chapter.

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

(10) "Professional-sports-services contract" means an agreement under which an individual is employed or agrees to render services as a player on a professional sports team, with a professional sports organization, or as a professional athlete.

(11) "Record" means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.

(12) "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.

(13) "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. If an individual is permanently ineligible to participate in a particular intercollegiate sport, the individual is not a student-athlete for purposes of that sport.

NEW SECTION. Sec. 3. ADMINISTRATION‑‑SERVICE OF PROCESS‑‑ SUBPOENAS. (1) The department shall administer this chapter.

(2) By engaging in the business of an athlete agent in this state, a nonresident individual appoints the director of the department as the individual's agent to accept service of process in any civil action related to the individual's business as an athlete agent in this state.

(3) The department may issue subpoenas for any relevant material under this chapter.

NEW SECTION. Sec. 4. ATHLETE AGENTS‑‑LICENSURE REQUIRED. (1) Except as otherwise provided in subsection (2) of this section, an individual may not act as an athlete agent in this state before being issued a certificate of licensure under section 6 or 8 of this act.

(2) An individual may act as an athlete agent before being issued a certificate of licensure for all purposes except signing an agency contract if:

(a) A student-athlete or another acting on behalf of the student-athlete initiates communication with the individual; and

(b) Within seven days after an initial act as an athlete agent, the individual submits an application for licensure as an athlete agent in this state.

(3) An agency contract resulting from conduct in violation of this section is void. The athlete agent shall return any consideration received under the contract.

NEW SECTION. Sec. 5. LICENSURE AS ATHLETE AGENT‑‑FORM‑‑ REQUIREMENTS. (1) An applicant for licensure shall submit an application for licensure to the department in a form prescribed by the department. An application filed under this section is a public record. Except as otherwise provided in subsection (2) of this section, the application must be in the name of an individual and signed by the applicant under penalty of perjury and must state or contain:

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

(b) The name of the applicant's business or employer, if applicable;

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

(d) A description of the applicant's:

(i) Formal training as an athlete agent;

(ii) Practical experience as an athlete agent; and

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

(e) The names and addresses of three individuals not related to the applicant who are willing to serve as references;

(f) The name, sport, and last known team for each individual for whom the applicant provided services as an athlete agent during the five years next preceding the date of submission of the application;

(g) The names and addresses of all persons who are:

(i) With respect to the athlete agent's business if it is not a corporation, the partners, officers, associates, or profit-sharers; and

(ii) With respect to a corporation employing the athlete agent, the officers, directors, and any shareholder of the corporation with a five percent or greater interest;

(h) Whether the applicant or any other person named pursuant to (g) of this subsection has been convicted of a crime that, if committed in this state, would be a felony or other crime involving moral turpitude, and identify the crime;

(i) Whether there has been any administrative or judicial determination that the applicant or any other person named pursuant to (g) of this subsection has made a false, misleading, deceptive, or fraudulent representation;

(j) Any instance in which the conduct of the applicant or any other person named pursuant to (g) of this subsection 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;

(k) Any sanction, suspension, or disciplinary action taken against the applicant or any other person named pursuant to (g) of this subsection arising out of occupational or professional conduct; and

(l) Whether there has been any denial of an application for, suspension or revocation of, or refusal to renew, the registration or licensure of the applicant or any other person named pursuant to (g) of this subsection as an athlete agent in any state.

(2) An individual who has submitted an application for, and received a certificate of, registration or licensure as an athlete agent in another state may submit a copy of the application and a valid certificate of registration or licensure from the other state in lieu of submitting an application in the form prescribed pursuant to subsection (1) of this section. The department shall accept the application and the certificate from the other state as an application for licensure in this state if the application to the other state:

(a) Was submitted in the other state within the six months next preceding the submission of the application in this state and the applicant certifies the information contained in the application is current;

(b) Contains information substantially similar to or more comprehensive than that required in an application submitted in this state; and

NEW SECTION. Sec. 6. CERTIFICATE OF LICENSURE‑‑ISSUANCE OR DENIAL‑‑RENEWAL. (1) Except as otherwise provided in subsection (3) of this section, the department shall issue a certificate of licensure to an individual who complies with section 5(1) of this act.

(2) Except as otherwise provided in subsection (3) of this section, the department shall issue a certificate of licensure to an individual whose application has been accepted under section 5(2) of this act.

(3) The department may refuse to issue a certificate of licensure if the department determines that the applicant has engaged in conduct that has a significant adverse effect on the applicant's fitness to serve as an athlete agent. In making the determination, the department may consider whether the applicant has:

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

(b) Made a materially false, misleading, deceptive, or fraudulent representation as an athlete agent or in the application;

(d) Engaged in conduct prohibited by section 14 of this act;

(e) Had a registration or licensure as an athlete agent suspended, revoked, or denied or been refused renewal of registration or licensure in any state;

(f) Engaged in conduct or failed to engage in conduct the consequence of which was that a sanction, suspension, or declaration of ineligibility to participate in an interscholastic or intercollegiate athletic event was imposed on a student-athlete or educational institution; or

(g) Engaged in conduct that significantly adversely reflects on the applicant's credibility, honesty, or integrity.

(4) In making a determination under subsection (3) of this section, the department shall consider:

(a) How recently the conduct occurred;

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

(5) An athlete agent may apply to renew licensure by submitting an application for renewal in a form prescribed by the department. An application filed under this section is a public record. The application for renewal must be signed by the applicant under penalty of perjury and must contain current information on all matters required in an original application for licensure.

(6) An individual who has submitted an application for renewal of registration or licensure in another state, in lieu of submitting an application for renewal in the form prescribed pursuant to subsection (5) of this section, may file a copy of the application for renewal and a valid certificate of registration or licensure from the other state. The department shall accept the application for renewal from the other state as an application for renewal in this state if the application to the other state:

(a) Was submitted in the other state within the last six months and the applicant certifies the information contained in the application for renewal is current;

(b) Contains information substantially similar to or more comprehensive than that required in an application for renewal submitted in this state; and

(7) A certificate of licensure or a renewal of licensure is valid for two years.

NEW SECTION. Sec. 7. SUSPENSION, REVOCATION, OR REFUSAL TO RENEW LICENSURE. (1) The department may suspend, revoke, or refuse to renew licensure for conduct that would have justified denial of licensure under section 6(3) of this act.

(2) The department may deny, suspend, revoke, or refuse to renew licensure only after proper notice and an opportunity for a hearing. Chapter 34.05 RCW, the administrative procedure act, applies to this chapter.

NEW SECTION. Sec. 8. TEMPORARY LICENSURE. The department may issue a temporary certificate of licensure while an application for licensure or renewal is pending. A temporary license is valid for no more than sixty days from the date of application for licensure.

NEW SECTION. Sec. 9. LICENSURE AND RENEWAL FEE. (1) An application for licensure or renewal of licensure must be accompanied by a fee in the following amount:

(a) Three hundred dollars for an initial application for licensure;

(b) Three hundred dollars for an application for licensure based upon a certificate of registration or licensure issued by another state;

(d) Three hundred dollars for an application for renewal of licensure based upon an application for renewal of registration or licensure submitted in another state.

(2) The amount of fees specified in this section are exempt from the requirements of RCW 43.24.086 and shall expire on December 31, 2003. After December 31, 2003, the amount of the fees shall be established by the department by rule pursuant to RCW 43.24.086.

NEW SECTION. Sec. 10. FORM OF CONTRACT. (1) An agency contract must be in a record signed by the parties.

(2) An agency contract must state or contain:

(a) 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 or will receive from any other source for entering into the contract or for providing the services;

(b) The name of any person not listed in the application for licensure or renewal who will be compensated because the student athlete signed the agency contract;

(d) A description of the services to be provided to the student-athlete;

(e) The duration of the contract; and

(f) The date of execution.

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

WARNING TO STUDENT-ATHLETE

IF YOU SIGN THIS CONTRACT:

(1) YOU MAY LOSE YOUR ELIGIBILITY TO COMPETE AS A STUDENT-ATHLETE IN YOUR SPORT;

(2) BOTH YOU AND YOUR ATHLETE AGENT ARE REQUIRED TO TELL YOUR ATHLETIC DIRECTOR, IF YOU HAVE AN ATHLETIC DIRECTOR, WITHIN SEVENTY-TWO HOURS PRIOR TO ENTERING INTO AN AGENCY CONTRACT AND AGAIN WITHIN SEVENTY-TWO HOURS AFTER ENTERING INTO AN AGENCY CONTRACT; AND

(3) YOU MAY CANCEL THIS CONTRACT WITHIN FOURTEEN DAYS AFTER SIGNING IT. CANCELLATION OF THE CONTRACT MAY NOT REINSTATE YOUR ELIGIBILITY.

(4) An agency contract that does not conform to this section is voidable by the student-athlete.

(5) The athlete agent shall give a copy of the signed agency contract to the student-athlete at the time of signing.

NEW SECTION. Sec. 11. NOTICE TO EDUCATIONAL INSTITUTION. (1) Within seventy-two hours prior to entering into an agency contract, the athlete agent shall give notice in a record 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.

(2) Within seventy-two hours after entering into an agency contract or before the next scheduled athletic event in which the student-athlete may participate, whichever occurs first, the athlete agent shall give notice in a record 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.

(3) Within seventy-two hours after entering into an agency contract or before the next athletic event in which the student-athlete may participate, 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.

NEW SECTION. Sec. 12. STUDENT-ATHLETE'S RIGHT TO CANCEL. (1) A student-athlete may cancel an agency contract by giving notice in a record to the athlete agent of the cancellation within fourteen days after the contract is signed.

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

(3) If a student-athlete cancels an agency contract, the student-athlete is not required to pay any consideration under the contract or to return any consideration received from the agent to induce the student-athlete to enter into the contract.

NEW SECTION. Sec. 13. REQUIRED RECORDS. (1) An athlete agent shall retain the following records for a period of five years:

(a) The name and address of each individual represented by the athlete agent;

(b) Any agency contract entered into by the athlete agent; and

(2) Records required by subsection (1) of this section to be retained are open to inspection by the department during normal business hours.

NEW SECTION. Sec. 14. PROHIBITED ACTS. (1) An athlete agent may not do any of the following with the intent to induce a student-athlete to enter into an agency contract:

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

(b) Furnish anything of value to a student-athlete before the student-athlete enters into the agency contract; or

(2) An athlete agent may not intentionally:

(a) Initiate contact with a student-athlete unless licensed under this chapter;

(b) Refuse or willfully fail to retain or permit inspection of the records required by section 13 of this act;

(d) Provide materially false or misleading information in an application for licensure or renewal of licensure;

(e) Predate or postdate an agency contract; or

(f) Fail to notify a student-athlete prior to the student-athlete's signing an agency contract for a particular sport that the signing by the student-athlete may make the student-athlete ineligible to participate as a student-athlete in that sport.

NEW SECTION. Sec. 15. CRIMINAL PENALTIES. The commission of any act prohibited by section 14 of this act by an athlete agent is a class C felony punishable according to chapter 9A.20 RCW. In addition to any criminal penalties, the court may assess a civil penalty of up to ten thousand dollars for a violation of section 14 of this act.

NEW SECTION. Sec. 16. CIVIL REMEDIES. (1) An educational institution has a right of action against an athlete agent or a former student-athlete for damages caused by a violation of this chapter. In an action under this section, the court may award to the prevailing party costs and reasonable attorneys' fees.

(2) Damages of an educational institution under subsection (1) of this section include losses and expenses incurred because, as a result of the activities of an athlete agent or former student-athlete, the educational institution was injured by a violation of this chapter or 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 taken to mitigate sanctions.

(3) A right of action under this section does not accrue until the educational institution discovers or by the exercise of reasonable diligence would have discovered the violation by the athlete agent or former student-athlete.

(4) Any liability of the athlete agent or the former student-athlete under this section is several and not joint.

(5) This chapter does not restrict rights, remedies, or defenses of any person under law or equity.

NEW SECTION. Sec. 17. ADMINISTRATIVE PENALTY. The department may assess a civil penalty against an athlete agent not to exceed twenty-five thousand dollars for a violation of this chapter.

NEW SECTION. Sec. 18. DEPARTMENT POWERS AND DUTIES. In addition to any other duties imposed by statute, the department shall have the following powers and duties: To adopt rules necessary to implement this chapter; to investigate alleged violations of this chapter and consumer complaints involving the practice of athlete-agents; to issue subpoenas, orders, and agreements necessary to enforce this chapter; to issue cease and desist orders for violations of this chapter; to conduct disciplinary proceedings in accordance with chapter 34.05 RCW; to impose sanctions and assess fines for violations of this chapter or any rules adopted under the director's authority; to delegate in writing to a designee the authority to issue subpoenas, statements of charges, and any other documents necessary to enforce this chapter; and to employ such administrative, investigative, and clerical staff needed to implement this chapter.

NEW SECTION. Sec. 19. APPLICATION AND CONSTRUCTION. In applying and construing this uniform act, consideration must be given to the need to promote uniformity of the law with respect to its subject matter of this chapter among states that enact it.

NEW SECTION. Sec. 20. SEVERABILITY. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION. Sec. 21. CAPTIONS NOT LAW. Captions used in this chapter are not any part of the law.

NEW SECTION. Sec. 22. Sections 1 through 21 of this act constitute a new chapter in Title 18 RCW.

NEW SECTION. Sec. 23. This act takes effect January 1, 2002, but the department of licensing may immediately take such steps as are necessary to ensure that this act is fully implemented on its effective date.