Senate Bill text for SB0365

SENATE BILL 365

47th legislature - STATE OF NEW MEXICO - second session, 2006

INTRODUCED BY

James G. Taylor

FOR THE COURTS, CORRECTIONS AND JUSTICE COMMITTEE

AN ACT

RELATING TO CONTRACT LAW; ENACTING THE UNIFORM ATHLETE AGENTS ACT; PROVIDING STANDARDS FOR REPRESENTATION OF STUDENT ATHLETES BY AGENTS; PRESCRIBING PENALTIES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

Section 1. SHORT TITLE.--This act may be cited as the "Uniform Athlete Agents Act".

Section 2. DEFINITIONS.--As used in the Uniform Athlete Agents 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. "Athlete agent" includes an individual who represents to the public that the individual is an athlete agent. "Athlete agent" does not include the spouse, parent, sibling, grandparent or guardian of a 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. "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;

F. "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;

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

H. "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;

I. "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;

J. "registration" means registration as an athlete agent pursuant to the Uniform Athlete Agents Act;

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; and

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. 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.

Section 3. SERVICE OF PROCESS--SUBPOENAS.--

A. By acting as an athlete agent in this state, a nonresident individual appoints the secretary of state 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.

B. The secretary of state may issue subpoenas for any material that is relevant to the administration of the Uniform Athlete Agents Act.

Section 4. ATHLETE AGENTS--REGISTRATION REQUIRED--VOID CONTRACTS.--

A. Except as otherwise provided in Subsection B of this section, an individual may not act as an athlete agent in this state without holding a certificate of registration pursuant to Section 6 or 8 of the Uniform Athlete Agents Act.

B. Before being issued a certificate of registration, an individual may act as an athlete agent in this state for all purposes except signing an agency contract, if:

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

(2) within seven days after an initial act as an athlete agent, the individual submits an application for registration as an athlete agent in this state.

C. 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.

Section 5. REGISTRATION AS ATHLETE AGENT--FORM--

REQUIREMENTS.--

A. An applicant for registration shall submit an application for registration to the secretary of state in a form prescribed by the secretary of state. An application filed under this section is a public record. The application must be in the name of an individual and, except as otherwise provided in Subsection B of this section, signed or otherwise authenticated by the applicant under penalty of perjury and 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 business or employer, if applicable;

(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:

(a) formal training as an athlete agent;

(b) practical experience as an athlete agent; and

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

(6) the name, sport and last known team for each individual for whom the applicant acted 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 are:

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

(b) with respect to a corporation employing the athlete agent, officers, directors and any shareholders of the corporation having an interest of five percent or greater;

(8) whether the applicant or any person named pursuant to Paragraph (7) of this subsection 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;

(9) whether there has been an administrative or judicial determination that the applicant or any person named pursuant to Paragraph (7) of this subsection has made a false, misleading, deceptive or fraudulent representation;

(10) an instance in which the conduct of the applicant or any person named pursuant to Paragraph (7) 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;

(11) a sanction, suspension or disciplinary action taken against the applicant or any person named pursuant to Paragraph (7) of this subsection arising out of occupational or professional conduct; and

(12) whether there has been a denial of an application for, suspension or revocation of, or refusal to renew, the registration or licensure of the applicant or any person named pursuant to Paragraph (7) of this subsection as an athlete agent in any state.

B. 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 an application in the form prescribed pursuant to Subsection A of this section. The secretary of state shall accept the application and the certificate from the other state as an application for registration in this state if the application to the other state:

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

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

(3) was signed by the applicant under penalty of perjury.

Section 6. CERTIFICATE OF REGISTRATION--ISSUANCE OR DENIAL--RENEWAL.--

A. Except as otherwise provided in Subsection B of this section, the secretary of state shall issue a certificate of registration to an individual who complies with Subsection A of Section 5 of the Uniform Athlete Agents Act or whose application has been accepted pursuant to Subsection B of that section.

B. 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 effect on the applicant's fitness to act as an athlete agent. In making the determination, the secretary of state may consider whether the applicant has:

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

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

(3) engaged in conduct that would disqualify the applicant from serving in a fiduciary capacity;

(4) engaged in conduct prohibited by Section 14 of the Uniform Athlete Agents Act;

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

(6) 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; or

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

C. In making a determination under Subsection B of this section, the secretary of state shall consider:

(1) how recently the conduct occurred;

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

(3) any other relevant conduct of the applicant.

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

E. 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 D 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 secretary of state 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:

(1) was submitted in the other state within six months next preceding the filing in this state and the applicant certifies the information contained in the application for renewal is current;

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

(3) was signed by the applicant under penalty of perjury.

F. A certificate of registration or a renewal of a registration is valid for two years.

Section 7. SUSPENSION, REVOCATION OR REFUSAL TO RENEW REGISTRATION.--

A. The secretary of state may suspend, revoke or refuse to renew a registration for conduct that would have justified denial of registration pursuant to Subsection B of Section 6 of the Uniform Athlete Agents Act.

B. The secretary of state may deny, suspend, revoke or refuse to renew a certificate of registration or licensure only after proper notice and an opportunity for a hearing.

Section 8. TEMPORARY REGISTRATION.--The secretary of state may issue a temporary certificate of registration while an application for registration or renewal of registration is pending.

Section 9. REGISTRATION AND RENEWAL FEES.--An application for registration or renewal of registration must be accompanied by a fee in the following amount:

A. twenty dollars ($20.00) for an initial application for registration;

B. ten dollars ($10.00) for an application for registration based upon a certificate of registration or licensure issued by another state;

C. twenty dollars ($20.00) for an application for renewal of registration; or

D. ten dollars ($10.00) for an application for renewal of registration based upon an application for renewal of registration or licensure submitted in another state.

Section 10. REQUIRED FORM OF CONTRACT.--

A. An agency contract must be in a record, signed or otherwise authenticated by the parties.

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

(2) the name of any person not listed in the application for registration or renewal of registration who will be compensated because the student athlete signed

the agency contract;

(3) a description of any expenses that the student athlete agrees to reimburse;

(4) a description of the services to be provided to the student athlete;

(5) the duration of the contract; and

(6) the date of execution.

C. 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) IF YOU HAVE AN ATHLETIC DIRECTOR, WITHIN SEVENTY-TWO HOURS AFTER ENTERING INTO THIS CONTRACT, BOTH YOU AND YOUR ATHLETE AGENT MUST NOTIFY YOUR ATHLETIC DIRECTOR; AND

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

D. An agency contract that does not 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.

E. The athlete agent shall give a record of the signed or otherwise authenticated agency contract to the student athlete at the time of execution.

Section 11. NOTICE TO EDUCATIONAL INSTITUTION.--

A. 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.

B. 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 the student athlete has entered into an agency contract.

Section 12. STUDENT ATHLETE'S RIGHT TO CANCEL.--

A. A student athlete may cancel an agency contract by giving notice of the cancellation to the athlete agent in a record 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 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.

Section 13. REQUIRED RECORDS.--

A. An athlete agent shall retain the following records for a period of five years:

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

(2) any agency contract entered into by the athlete agent; and

(3) any direct costs incurred by the athlete agent in the recruitment or solicitation of a student athlete to enter into an agency contract.

B. Records required pursuant to Subsection A of this section to be retained are open to inspection by the secretary of state during normal business hours.

Section 14. PROHIBITED CONDUCT.--

A. An athlete agent, with the intent to induce a student athlete to enter into an agency contract, may not:

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

(2) furnish anything of value to a student athlete before the student athlete enters into the agency contract; or

(3) furnish anything of value to any individual other than the student athlete or another registered athlete agent.

B. An athlete agent shall not intentionally:

(1) initiate contact with a student athlete unless registered pursuant to the Uniform Athlete Agents Act;

(2) refuse or fail to retain or permit inspection of the records required to be retained pursuant to Section 13 of the Uniform Athlete Agents Act;

(3) fail to register when required pursuant to Section 4 of the Uniform Athlete Agents Act;

(4) provide materially false or misleading information in an application for registration or renewal of registration;

(5) predate or postdate an agency contract; or

(6) 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.

Section 15. CRIMINAL PENALTIES.--An athlete agent who violates the provisions of Section 14 of the Uniform Athlete Agents Act is guilty of a misdemeanor and upon conviction shall be sentenced pursuant to the provisions of Section 31-19-1 NMSA 1978.

Section 16. CIVIL REMEDIES.--

A. An educational institution has a right of action against an athlete agent or a former student athlete for damages caused by a violation of the provisions of the Uniform Athlete Agents Act. In an action pursuant to this section, the court may award to the prevailing party costs and reasonable attorney fees.

B. Damages of an educational institution pursuant to Subsection A of this section include losses and expenses incurred because, as a result of the conduct of an athlete agent or former student athlete, the educational institution was injured by a violation of the Uniform Athlete Agents Act 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 likely to be imposed by such an organization.

C. A right of action pursuant to 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.

D. Any liability of the athlete agent or the former student athlete pursuant to this section is several and not joint.

E. The Uniform Athlete Agents Act does not restrict rights, remedies or defenses of any person under law or equity.

Section 17. ADMINISTRATIVE PENALTY.--The secretary of state may assess a civil penalty against an athlete agent not to exceed twenty-five thousand dollars ($25,000) for a violation of the Uniform Athlete Agents Act.

Section 18. UNIFORMITY OF APPLICATION AND CONSTRUCTION.--In applying and construing the Uniform Athlete Agents 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.

Section 19. ELECTRONIC SIGNATURES IN GLOBAL AND NATIONAL COMMERCE ACT.--The provisions of the Uniform Athlete Agents 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 conform to the requirements of Section 102 of the federal Electronic Signatures in Global and National Commerce Act, and supersede, modify and limit the federal Electronic Signatures in Global and National Commerce Act.

Section 20. SEVERABILITY.--If any provision of the Uniform Athlete Agents Act or its application to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of that act that can be given effect without the invalid provision or application, and to this end the provisions of that act are severable.

Section 21. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2006.

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