June 12, 2007, Introduced by Senators WHITMER, PAPPAGEORGE, SCHAUER, CHERRY, BASHAM and JACOBS and referred to the Committee on Judiciary.
A bill to regulate certain contracts and transactions
involving athlete agents and student-athletes in this state; to
provide for licensure and regulation of certain athlete agents; to
provide for certain powers and duties of certain state agencies; to
require certain disclosures; to create certain causes of action; to
provide for remedies and penalties; and to repeal acts and parts of
acts.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1. This act shall be known and may be cited as the
"uniform athlete agents act".
Sec. 3. As used in this act:
(a) "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.
(b) "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 and includes an individual who represents to the public
that he or she is an athlete agent. Athlete agent 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.
(c) "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.
(d) "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.
(e) "Department" means the department of labor and economic
growth.
(f) "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
resulting from athletic ability or performance.
(g) "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.
(h) "Person" means an individual, corporation, business trust,
estate, trust, partnership, limited liability company, association,
joint venture, government, governmental subdivision, or any other
legal or commercial entity.
(i) "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.
(j) "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.
(k) "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.
(l) "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 permanently ineligible
to participate in a particular intercollegiate sport is not a
student-athlete for purposes of that sport.
Sec. 5. (1) Except as otherwise provided in subsection (2), an
individual may not act as an athlete agent in this state without
holding a license issued under this act.
(2) Before being issued a license, an individual may act as an
athlete agent in this state for all purposes except signing an
agency contract under the following circumstances:
(a) A student-athlete or another person acting on behalf of
the student-athlete initiates communication with the individual.
(b) Within 7 days after an initial act as an athlete agent,
the individual submits an application for licensure as an athlete
agent.
(3) An agency contract resulting from conduct in violation of
this section is void and the athlete agent shall return any
consideration received under the contract.
(4) By acting as an athlete agent in this state, a nonresident
individual appoints the department as the individual's agent for
service of process in any civil action in this state related to the
individual's acting as an athlete agent in this state.
(5) The department may issue subpoenas for any material that
is relevant to the administration of this act.
Sec. 7. (1) An applicant for licensure shall submit an
application to the department on a form prescribed by the
department. The application must be in the name of an individual
and, except as otherwise provided under this act, signed or
otherwise authenticated by the applicant under penalty of perjury
and state or contain the following:
(a) The name of the athlete agent and the address of the
athlete agent's principal place of business.
(b) The name of the athlete agent's business or employer, if
applicable.
(c) Any business or occupation engaged in by the athlete agent
for the 5 years preceding the date of the submission of the
application.
(d) A description of the athlete agent's formal training as an
athlete agent, practical experience as an athlete agent, and
educational background relating to the activities as an athlete
agent.
(e) The names and addresses of 3 individuals not related to
the athlete agent who are willing to serve as references.
(f) The name, sport, and last known team for each individual
for whom the athlete agent acted as an athlete agent during the 5
years preceding the date of the submission of the application.
(g) The names and addresses of all persons who are, with
respect to the athlete agent's business if it is not a corporation,
the partners, members, officers, managers, associates, or profit-
sharers of the business and, with respect to a corporation
employing the athlete agent, the officers, directors, and any
shareholder of the corporation having an interest of 5% or greater.
(h) Whether the athlete agent or any person named under
subdivision (g) has been convicted of a crime that, if committed in
this state, would be a crime involving moral turpitude or a felony,
and identify the crime.
(i) Whether there has been any administrative or judicial
determination that the athlete agent or any person named under
subdivision (g) has made a false, misleading, deceptive, or
fraudulent representation.
(j) Any instance in which the conduct of the athlete agent or
any person named under subdivision (g) 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 athlete agent or any person named under subdivision (g)
arising out of occupational or professional conduct.
(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 person named under subdivision
(g) as an athlete agent in any state.
(2) An individual who has submitted an application for, and
holds a certificate of, registration or licensure as an athlete
agent in another state may submit a copy of the application and
certificate in lieu of submitting the application under subsection
(1).
(3) 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 is in conformance
with the following:
(a) Was submitted in the other state within 6 months preceding
the submission of the application in this state and the applicant
certifies that 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.
(c) Was signed by the applicant under penalty of perjury.
Sec. 9. (1) Except as otherwise provided in subsection (2),
the department shall issue a license to an individual who complies
with section 7.
(2) The department may deny the issuance of a license if the
department determines that the applicant has engaged in conduct
that has a significant adverse effect on the applicant's fitness to
act as an athlete agent. In making the determination, the
department may consider whether the applicant has done any of the
following:
(a) Been convicted of a crime that, if committed in this
state, would be a crime involving moral turpitude or a felony.
(b) Made a materially false, misleading, deceptive, or
fraudulent representation in the application.
(c) Engaged in conduct that would disqualify the applicant
from serving in a fiduciary capacity.
(d) Engaged in conduct prohibited by this act.
(e) Had a registration or licensure as an athlete agent
suspended, revoked, or denied or has been refused renewal of
registration or licensure as an athlete agent in any state.
(f) Engaged 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.
(g) Engaged in conduct that the department determines
significantly adversely reflects on the applicant's credibility,
honesty, or integrity.
(3) In making a determination under subsection (2), the
department shall consider how recently the conduct occurred, the
nature of the conduct and the context in which it occurred, and any
other relevant conduct of the applicant.
(4) An athlete agent may apply to renew a license by
submitting an application for renewal in a form prescribed by the
department. 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.
(5) 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 in
subsection (4), 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 was submitted in the other state
within 6 months preceding the filing in this state and the
applicant certifies that the information contained in the
application for renewal is current, contains information
substantially similar to or more comprehensive than that required
in an application for renewal submitted in this state, and was
signed by the applicant under penalty of perjury.
(6) A license or a renewal of a license is valid for 2 years.
Sec. 11. (1) The department may suspend, revoke, or refuse to
renew a license for conduct that would have justified such action
under section 9(2).
(2) The department may deny, suspend, revoke, or refuse to
renew a license only after proper notice and an opportunity for an
administrative hearing under the administrative procedures act of
1969, 1969 PA 306, MCL 24.201 to 24.328.
(3) The department may issue a temporary license while an
application for initial licensure or renewal licensure is pending.
(4) An application for initial or renewal licensure shall be
accompanied by a fee in the following amount:
(a) $300.00 for an initial application.
(b) $300.00 for an application based upon a certificate of
registration or licensure issued by another state.
(c) $75.00 for an application for renewal of licensure.
(d) $75.00 for an application for renewal based upon an
application for renewal of registration or licensure submitted in
another state.
Sec. 13. (1) An agency contract must be in a record and signed
or otherwise authenticated by the parties.
(2) An agency contract must state or contain all of the
following:
(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 written
disclosure required under section 5 who will be compensated as a
result of the student-athlete signing the agency contract.
(c) A description of any expenses that the student-athlete
agrees to reimburse.
(d) A description of the services to be provided to the
student-athlete.
(e) The duration of the agency contract.
(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 boldfaced
type in capital letters stating the following:
"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) If you have an athletic director, within 72 hours after
entering into this contract or before your next scheduled athletic
event, whichever occurs first, both you and your athlete agent must
notify your athletic director.
(3) You may cancel this contract within 14 days after signing
it. Cancellation of this contract may not reinstate your
eligibility to compete as a student-athlete.".
(4) An agency contract that does not substantially conform to
this section is voidable by the student-athlete. If a student-
athlete voids an agency contract, the student-athlete is not
required to pay any consideration under the contract or to return
any consideration received from the athlete agent to induce the
student-athlete to enter into the contract.
(5) The athlete agent shall give a record of the signed or
otherwise authenticated agency contract to the student-athlete at
the time of execution.
Sec. 15. (1) Within 72 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
agency 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 72 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.
Sec. 17. (1) A student-athlete may cancel an agency contract
by giving notice of the cancellation to the athlete agent in a
record within 14 days after the agency contract is signed.
(2) The right to cancel an agency contract described in
subsection (1) cannot be waived by the student-athlete.
(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 athlete
agent to induce the student-athlete to enter into the agency
contract.
Sec. 19. (1) An athlete agent shall retain the following
records for a period of 5 years:
(a) The name and address of each individual represented by the
athlete agent.
(b) Any agency contract entered into by the athlete agent.
(c) Any direct costs incurred by the athlete agent in the
recruitment or solicitation of a student-athlete to enter into an
agency contract.
(2) Records required to be retained under subsection (1) are
open to inspection by the department during normal business hours.
Sec. 21. (1) An athlete agent, with the intent to induce a
student-athlete to enter into an agency contract, shall not do any
of the following:
(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.
(c) Furnish anything of value to any individual other than the
student-athlete or another athlete agent.
(2) An athlete agent shall not intentionally do any of the
following:
(a) Initiate contact with a student-athlete unless licensed
under this act or under the circumstances provided for in section
5(2).
(b) Refuse to permit the inspection of or fail to retain the
records required to be retained by section 19.
(c) Fail to become licensed under section 5.
(d) Provide materially false or misleading information in an
application for licensure or renewal of licensure.
(e) Predate or postdate an agency contract.
(f) Fail to notify a student-athlete, before the student-
athlete signs or otherwise authenticates an agency contract for a
particular sport, that the signing or authentication may make the
student-athlete ineligible to participate as a student-athlete in
that sport.
Sec. 23. An athlete agent who violates section 21 is guilty of
a misdemeanor punishable by imprisonment for not more than 93 days
or a fine of not more than $1,000.00, or both.
Sec. 25. (1) An educational institution has a cause of action
for damages against an athlete agent or a former student-athlete
for damages caused by a violation of this act. In an action under
this section, the court may award to the prevailing party costs and
reasonable attorney fees.
(2) Damages of an educational institution under subsection (1)
include losses and expenses incurred caused by the conduct of an
athlete agent or former student-athlete that was in violation of
this act. The losses include any penalty, disqualification, or
suspension of the educational institution 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 likely to be imposed by such an organization.
(3) A cause 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 act does not restrict rights, remedies, or defenses
of any person under law or equity.
Sec. 27. The department, after notice and an opportunity for
an administrative hearing under the administrative procedures act
of 1969, 1969 PA 306, MCL 24.201 to 24.328, may assess an
administrative fine not to exceed $25,000.00 for a violation of
this act.
Sec. 29. 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 among states that enact
it.
Sec. 31. The provisions of this act governing the legal
effect, validity, or enforceability of electronic records or
signatures, and of contracts formed or performed with the use of
such records or signatures, shall conform to the requirements of
section 102 of the electronic signatures in global and national
commerce act, 15 USC 7002.
Sec. 33. Section 411e of the Michigan penal code, 1931 PA 328,
MCL 750.411e, is repealed effective January 1, 2008.
Sec. 35. This act takes effect January 1, 2008.