what types of regulations do athlete agents have to follow?

OLR Bill Analysis

sSB 487

AN ACT ADOPTING THE Compatible ATHLETE AGENTS Human action

SUMMARY :

This bill make meaning changes to electric current police force on athlete agents. Among other things, it:

1. expands the types of agency contracts that are discipline to the law's provisions by including agreements authorizing a person to negotiate endorsement contracts;

2. makes a number of changes to the reasons the Department of Consumer Protection (DCP) can refuse to issue or renew a registration or append or revoke ane;

three. eliminates the requirement that the agent post a $ 100,000 surety bond as a condition of registration;

4. extends the registration period from ane to two years;

five. adds a prophylactic harbor provision when an athlete initiates contact with an agent who is not registered (the agent must register inside 7 days after the initial contact);

half-dozen. alters the registration application requirements and adds provisions on registration and renewal for agents who are registered in other states;

seven. alters the contract requirements but applies these requirements simply to agency contracts (unlike current police force, the bill does not address financial services contracts which are agreements where an athlete authorizes an athlete agent to provide financial services including making and carrying out investment and other financial decisions);

viii. increases from 6 to 14 days the time an athlete has to cancel an agency contract;

9. alters the provisions on prohibited conduct and no longer prohibits athlete agents from inbound bureau contracts with student athletes before their collegiate eligibility expires;

ten. creates a cause of activity by an educational institution confronting an agent or former student-athlete for damages caused by violations of the neb;

xi. does not specifically permit restitution or make violations an unfair trade practise, every bit under electric current law;

12. alters the record-keeping requirements imposed on agents and reduces, from seven to five years, the time the agent must keep records;

13. eliminates certain rules and prohibitions regarding interviewing athletes; and

14. eliminates DCP'due south authorisation to prefer regulations regarding athlete agents.

EFFECTIVE DATE: January 1, 2005

ATHLETE

Like to current police force, the bill defines "student-athlete" as someone who engages in, is eligible to appoint in, or may be eligible to engage in, an intercollegiate sport. Just unlike current law, the nib does not limit its scope to athletes who have non signed a contract with a professional person sports team for employment or for future athletic services.

The bill defines "intercollegiate sport" as a sport played at the collegiate level for which eligibility requirements are set by a national association for the promotion of athletics, such as the National Collegiate Athletic Association (NCAA).

Agent

Under current law, an "athlete agent" is a person who (1) for compensation, recruits or solicits athletes to sign an agent, financial services, or professional person sports services contract or (2) for a fee, procures or offers, promises, or attempts to obtain employment for an athlete with a professional person sports team or as a professional person athlete. The bill instead defines "athlete agent" as an individual who (1) enters an agency contract with a student-athlete and (2) solicits a pupil athlete to enter such a contract. Unlike current law, the bill includes someone who represents to the public that he is an agent.

Under electric current law, the term does not include the athlete's spouse, parent, or sibling. The neb as well excludes an athlete's grandparents and guardians and someone interim on behalf of a sports team.

The bill allows only individuals to register every bit agents, thereby disqualifying corporations and other legal entities from registering.

AGENCY CONTRACT

The beak defines "bureau contract," similar to current law, as an agreement in which a student-athlete authorizes a person to negotiate or solicit a professional sports services contract or an endorsement contract. Simply the pecker makes endorsement contracts (defined every bit agreements under which a student-athlete receives consideration to utilize his publicity value on behalf of someone else) a type of bureau contract discipline to its provisions.

As nether electric current police, a "professional services contract" is an agreement under which an athlete is employed past, or agrees to give services as a histrion on, a team or as a professional athlete.

REGISTRATION

Both the bill and current police crave athlete-agents to register. The nib extends the registration period from ane to two years. The bill sets the fee for an awarding or renewal at $ 200 for the two-twelvemonth period instead of the $ 100 annual fee under current law. The neb also sets a $ 200 fee for applications or renewals based on registration in another state.

Condom Harbor Provision

The bill adds a provision that allows an individual to act as an agent before registration for all purposes except signing an bureau contract if (1) the student-athlete or someone on his behalf contacts the agent and (two) the private files an agent registration application within vii days of the initial act taken every bit an agent. A contract signed in violation of this provision is void. The pecker requires the athlete agent to return any consideration received under such a contract.

The neb defines "contact" as a communication, direct or indirect, between an athlete agent and a student-athlete, to recruit or solicit the pupil-athlete to enter an bureau contract.

Awarding Requirements

The bill requires an applicant to provide most of the same information as required currently under regulations but it adds some requirements and eliminates others. As under current constabulary, the application must provide: (1) the applicant's name and address; (2) his business or employer, if applicable; (iii) occupations engaged in for the past 5 years; and (4) a description of formal preparation, practical experience, and pedagogy.

Current regulations require applicants to provide the names and addresses of all who have a fiscal involvement in the agent's business organization. If the applicant is a corporation, education and experience information must be provided most all who act on the corporation'due south behalf as an athlete amanuensis. Instead, the nib specifies that the applicant must provide the names and addresses of anyone who is (ane) a partner, member, officer, manager, associate, or profit-sharer in the amanuensis's business organization or (2) an officer, director, or shareholder with at least five% of the shares in a corporation employing the agent. An applicant must too state whether he, or anyone named under this requirement (1) was convicted of a crime that would be, in this state, a felony and identify the crime; (2) was found to have made a false, misleading, deceptive, or fraudulent representation in an administrative or judicial proceeding; (iii) did something that resulted in an athlete's sanction, suspension, or announcement of ineligibility for intercollegiate sports; (4) was the subject of a sanction, suspension, or disciplinary action arising out of their professional conduct; or (5) was denied an awarding.

The bill adds requirements that the applicant provide the (i) names and addresses of three references unrelated to the bidder and (two) the name, sport, and last-known squad of each individual for whom the applicant acted as an agent in the past five years.

The bill eliminates a requirement that DCP adopt regulations to establish bail requirements for athlete agents (the regulations require a $ 100,000 surety bond).

Regulations also allow DCP to reserve the right, as a condition of registration, to corroborate the form of an agency, fiscal services, or professional services contract. The bill eliminates this explicit authority.

The pecker requires the applicant to sign or otherwise authenticate the awarding under penalty of perjury (a class D felony punishable past one to five years in prison, a fine of up to $ 5,000, or both).

Registration Renewal

As under current law, the athlete amanuensis must submit a written renewal application on a form provided by DCP with the same information required for the original application. The bill specifies that the athlete agent signs the course nether penalization of perjury (a form D felony).

Registered in Other States

The bill allows an applicant who is already registered in some other state to submit a copy of his application to, and the certificate issued by, the other country instead of completing the Connecticut application. The bill requires the DCP commissioner to accept the application if (1) it was submitted to the other state within the last six months, (two) the applicant certifies that the information in it is correct, (3) the data is essentially similar or more comprehensive than what this state requires, and (4) it was signed by the applicant under penalty of perjury.

The bill also includes a like provision on registration renewal based on a valid registration in another state.

Temporary Registration

The bill allows the commissioner to issue a temporary registration while an awarding for registration or renewal is awaiting.

REFUSAL TO Effect OR RENEW REGISTRATION, SUSPENSION, AND REVOCATION

The bill makes a number of changes to the reasons DCP tin can refuse to issue or renew a registration or suspend or revoke i. The pecker uses a broad standard most conduct that has a significant agin effect on the fitness for the chore so includes a listing of considerations (some of which are similar to the criteria in the regulations).

The beak allows the commissioner to refuse to issue or renew a registration or suspend or revoke one if he finds the bidder engaged in acquit that has a meaning adverse effect on his fitness to human action equally an athlete agent. The commissioner tin consider whether the applicant:

1. was convicted of a crime that, if committed in this state, would be a felony;

2. fabricated a materially fake, misleading, deceptive, or fraudulent representation as an athlete agent or in his awarding;

3. engaged in behave that would disqualify him from existence a fiduciary;

4. engaged in deport the beak prohibits to induce an athlete to enter an agency contract;

5. had an athlete amanuensis registration suspended, revoked, denied, or renewal refused in any state;

6. engaged in conduct that resulted in a student athlete'south or educational establishment'south sanction, suspension, or declaration of ineligibility for participation in interscholastic or intercollegiate athletic events; or

seven. engaged in bear that significantly adversely reflects on the applicant's brownie, honesty, or integrity.

The commissioner must consider (1) how recently the conduct occurred, (2) the nature of the conduct and its context, and (3) any other relevant deport.

Unlike current police, the bill requires notice and hearing under the authoritative procedure act before suspending, revoking, or refusing to renew a registration. But the pecker eliminates explicit say-so for revoking a registration for conviction of a violation of the athlete agent laws, summary suspension after a criminal violation, and a one-year waiting period earlier reapplying for a registration afterward a revocation or judgment affirming it.

Under current law, the commissioner can turn down to effect or renew, append, or revoke a registration for violating any of the statutory provisions or the regulations. DCP can take ane of these actions if the agent, its employees, agents, or officers:

ane. is not lawfully engaged in business organization in the state;

2. engaged in comport likely to mislead, deceive, or defraud the public or the commissioner;

3. engaged in untruthful or misleading advertising;

4. fabricated a material misrepresentation;

v. fabricated a faux hope of a type probable to influence, persuade, or induce an athlete to enter a contract;

six. failed to account within a reasonable fourth dimension for or remit funds that belong to client athletes;

seven. was convicted of forgery, embezzlement, obtaining money nether false pretenses, larceny, extortion, conspiracy to defraud, or similar offenses in this state or elsewhere;

eight. engaged in dishonest, fraudulent, or improper dealings;

9. violated or failed to comply with the regulations;

x. acted as amanuensis after his bond was cancelled;

xi. commingled funds of others in an escrow or trustee business relationship;

12. contacted an athlete straight or indirectly before being registered;

13. entered an agreement that offered something of value to an employee of a higher education establishment in this land where the athlete is enrolled or a fellow member of his family or a friend probable to influence the athlete'southward decisions, in return for referring a client;

fourteen. divided fees or received compensation from a potential employer of an athlete that he has a contract with;

xv. committed an unfair trade exercise;

16. collected a fee over ten% of the direct and indirect compensation an athlete receives under a contract in a calendar year; or

17. sold or transferred an interest in or a right to profits from working as an agent in this land to someone who is not registered in this country.

The regulations as well allow DCP to reject to outcome or renew a registration if the applicant lacks formal training or practical experience in (1) contracts and their negotiation, (ii) complaint resolution, (three) mediation, or (iv) civil resolution of contract disputes. For business organization entities, DCP must review their employees and agents. DCP can consider other relevant training, education, and experience for these requirements.

CONTRACTS

Class

The bill allows bureau contracts to be in records (inscribed on a tangible medium or stored in an electronic or other medium that is retrievable in perceivable form), while current law requires them to be written. The bill does not require the use of plain linguistic communication which current regulations practice.

The bill but applies to agency contracts, dissimilar current law which likewise applies to financial services contracts and professional person services contracts.

Contents

Every bit nether current law, an agency contract must contain (i) data on amounts the student athlete pays the athlete agent for services, (2) a description of services provided, and (3) the appointment of execution.

The beak adds that the contract must disclose (1) anything else the agent has or volition receive from other sources for entering the contract or providing services, (ii) unregistered individuals who will receive compensation, (three) expenses the athlete must pay, and (4) the contract's duration.

The nib requires the agent to give a tape of the bureau contract to the educatee-athlete at the time of execution.

The bill eliminates the requirement that the agent impose fees simply according to the schedule in the contract and a provision assuasive changes to the schedule effective seven days after he files with DCP a copy of the contract with the changes.

Contract Warning/Disclaimer

The beak does not utilise its requirements to fiscal services contracts, equally electric current police does. As under electric current regulations, the bill requires an bureau contract to contain a conspicuous notice in boldface capital letter messages virtually (one) the possibility of losing eligibility equally a student-athlete and (2) the right to cancel the contract. The nib adds that the notice must state that canceling might not reinstate eligibility.

The bill adds that the detect must include the requirement to notify an athletic director (described below). It eliminates the requirement that the find state that (i) registration does not imply blessing of the agent or contract and (2) the athlete should read the contract.

The bill specifies that the detect must exist placed about the educatee-athlete's signature.

Non-Conforming Bureau Contracts

The bill allows an athlete to void an agency contract that does non satisfy the rules described to a higher place. In those circumstances, he is not required to pay anything under the contract or return anything the agent gave him to induce him to agree to the contract.

Notification to Athletic Director

Electric current regulations require the agent to give a copy of an agent contract, fiscal services contract, or professional services contract to the able-bodied director of a higher education establishment in this country where the athlete is enrolled inside three business days of signing. The pecker instead:

i. applies only to agency contracts;

2. requires the agent to give notice in a record and the athlete to inform his able-bodied managing director;

3. requires the amanuensis to give a record to an athletic director of an educational institution where he has reasonable grounds to believe the athlete intends to enroll, likewise as an athletic managing director where the athlete is enrolled; and

4. requires notice within 72 hours or earlier the athlete participates in an able-bodied upshot, whichever is less, which will be less than the three business days required under the regulations in some circumstances.

The beak defines "athletic director" as someone responsible for administering the overall athletic program, whether the responsibilities are for both sexes or for a unmarried sex.

Correct to Cancel Agency Contract

The neb increases, from half-dozen to 14 days, the time an athlete has to cancel an bureau contract and requires the student-athlete to cancel by giving discover in a record. The bill also provides that (1) the student-athlete cannot waive this right and (2) if he cancels the contract, he is not required to pay anything under the contract or return anything received from the athlete agent to induce the contract.

Record RETENTION

The bill reduces, from seven to five years, the time that an agent must go on records. As under current law, the agent must keep (1) the name and address of individuals represented and (2) agency contracts entered into. The bill besides requires the agent to proceed records of costs in recruiting or soliciting athletes instead of information on fees received, services provided, and travel and entertainment expenses. The bill makes these records open up to inspection by DCP, while electric current police force requires the amanuensis to provide DCP with the data in the records on written asking.

PROHIBITED Comport

The neb makes a number of changes to the types of conduct that athlete agents are prohibited from engaging in.

The beak eliminates a prohibition against (i) entering oral or written agency contracts or professional sport services contracts with an athlete earlier his collegiate eligibility expires and (2) dividing fees with or receiving compensation from a professional sports league or franchise or its representatives or employees.

Current law prohibits (ane) inbound an oral or written agreement offering anything of value to an employee of an institution of higher instruction in the country for referring an athlete and (2) giving, offering, or promising annihilation of value to an athlete, his guardian, or member of his immediate family before his higher eligibility expires. The bill instead prohibits an athlete agent from furnishing anything of value to an private other than the educatee-athlete or some other registered athlete-agent, with intent to induce the pupil-athlete to enter a contract.

Both the bill and electric current police prohibit an agent from giving materially false or misleading information or making materially faux promises or representations. The bill specifies that the athlete agent must not do and so intending to induce a pupil-athlete to enter a contract.

The bill adds provisions prohibiting an athlete agent from intentionally (1) initiating contact with a pupil-athlete unless he is registered, (2) refusing or failing to retain or permit inspection of records that he must continue, (iii) failing to annals, (iv) providing materially false or misleading data in an application for registration or renewal, (v) pre- or post-dating an agency contract, and (half-dozen) failing to notify a pupil-athlete before he signs or authenticates an agency contract for a particular sport that it may make him ineligible to participate equally a educatee-athlete in that sport.

PENALTIES

As under current law, a violation of the athlete-amanuensis laws is a class B misdemeanor, punishable by up to six months in prison, a fine of upward to $ one,000, or both.

Every bit under electric current police force, the beak allows the commissioner to appraise a ceremonious penalization against an athlete agent after notice and a hearing nether the authoritative procedures human action. The bill changes the penalization from up to $ 1,000 plus profits derived from the violation minus restitution paid, to a maximum of $ 25,000.

The bill eliminates provisions allowing restitution and making violations an unfair trade practice, as current police force provides.

Crusade OF ACTION By EDUCATIONAL INSTITUTION

The bill gives an educational institution the right to sue an athlete amanuensis or sometime pupil-athlete for damages caused by violations of the nib. It allows the court to award costs and reasonable attorney's fees to the prevailing political party. Damages include losses and expenses incurred considering of (one) injuries from the violation or (2) penalties, disqualification, or suspension from participation in athletics by (a) a national clan for promoting and regulating athletics, (b) an athletic conference, or (c) a reasonable self-imposed disciplinary activity taken to mitigate sanctions likely to be imposed by an organization. The right to sue arises when the educational institution discovers, or by reasonable diligence should accept discovered, the violation (but the bill does not gear up a limitation on the time to bring a adapt). The liability of the athlete amanuensis and student-athlete is several and not articulation. The bill does not restrict rights, remedies, or defenses.

SERVICE OF PROCESS

Under the bill, a nonresident interim as an athlete agent in this state appoints the secretary of the state as his agent for service of process in a ceremonious action in this country related to his deportment as an athlete agent here.

INTERVIEWS

The bill eliminates the requirements relating to interviews between athletes and agents. Under electric current law, the time, place, and duration of an interview between an athlete and agent must follow whatever policy that the school where the athlete is enrolled adopts or follows. An interview is a face-to-face coming together to recruit or solicit the athlete for (1) an agent contract, financial services contract, or professional person services contract or (2) employment with a professional sports squad or as a professional athlete.

REGULATIONS

The bill eliminates DCP's explicit authorization to adopt regulations to set requirements for registration and regulating athletes including (i) agent qualifications and registration procedures, (2) bond requirements, (three) requirements for contracts including fee schedules, (4) limits and weather on communicating with athletes such equally advertising and interviewing, (v) guidelines for registration suspension and revocation, (half dozen) limits on fees and bounty such as the transfer of interests or rights to participate in profits made past agents, and (seven) other reasonable regulations the commissioner finds necessary or desirable.

E-SIGN

The bill specifies that the legal effect, validity, or enforceability of electronic records or signatures and of contracts formed or performed with records and signatures conforms to the requirements of the federal Electronic Signatures in Global and National Commerce Act (Due east-SIGN) (15 U. S. C. § 7001 et seq. ) but information technology supercedes, modifies, and limits E-SIGN as immune by that act.

This federal act applies to transactions in interstate and foreign commerce. The deed validates the apply of electronic records and electronic signatures in transactions merely does not require anyone to concord to employ or accept electronic records or signatures. Where Eastward-SIGN conflicts with a state law, the federal police preempts land police. A country provision tin modify, limit, or supersede E-SIGN's electronic contracting provisions if information technology provides alternative procedures or requirements for the utilize or acceptance of electronic records or signatures, is consequent with the federal law, does not require or accord greater legal status or issue to a specific technology, and specifically references the federal act.

OTHER PROVISIONS

The pecker specifies that in applying and construing its provisions, consideration must be given to the demand to promote uniformity.

The beak states that if any provision or its awarding to a person or circumstance is invalid, it does not affect other provisions or applications of the bill that can have effect without the invalid provision or application. It besides states that its provisions are severable.

The neb also deletes provisions (1) in regulations that a business entity that acts as an athlete agent is not relieved of responsibility for the acquit of its agents, employees, or officers and the agents, employees, and officers are not relieved of responsibleness past reason of their relationship with the business and (ii) in statute that zip requires an athlete to utilize an agent or limits his ability to contract for services exterior the land.

COMMITTEE ACTION

Judiciary Committee

Joint Favorable Substitute

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Source: https://www.cga.ct.gov/2004/ba/2004SB-00487-R000204-BA.htm

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