SB386: Bill Text

LRB-4290/1

MDK:wlj:hmh

1999 - 2000 LEGISLATURE

1999 Senate BILL 386

February 16, 2000 - Introduced by Senators Grobschmidt, Roessler, Welch and Rosenzweig, cosponsored by Representatives Wieckert, Kreuser, Underheim, Kreibich, Suder, Ott, Hahn, Meyerhofer, Albers, Goetsch, Sykora, Musser, Olsen, Huebsch, Kelso, Pettis, Plouff, Seratti, Miller, Vrakas, Ainsworth and Kaufert. Referred to Economic Development, Housing and Government Operations.

SB386,1,3 An Act to create 93.135 (1) (rp) and 100.179 of the statutes; relating to: regulation of athletic agents, granting rule-making authority and providing a penalty.

Analysis by the Legislative Reference Bureau

This bill regulates individuals who act as athletic agents and imposes requirements on contracts between athletic agents and student athletes.

The bill prohibits an individual from acting as an athletic agent unless he or she is registered with the department of agriculture, trade and consumer protection (DATCP). "Athletic agent" is defined as an individual who: 1) enters into an agent contract with a student athlete; or 2) contacts, recruits or solicits a student athlete to enter into an agent contract. An individual who acts on behalf of such an individual for the purpose of contacting, recruiting or soliciting a student athlete to enter into an agent contract is also included under the definition of "athletic agent". An "agent contract" is defined as an agreement under which a student athlete authorizes an athletic agent to negotiate or solicit a professional sports services contract or endorsement contract for the student athlete.

Except as provided in the bill, an individual may not contact a student athlete in this state unless the individual is registered as an athletic agent. "Contact" is defined as a communication by any means between an athletic agent and student athlete to induce or attempt to induce the student athlete to enter into an agent contract, professional sports services contract or endorsement contract. An individual who is not registered as an athletic agent may contact a student athlete only if the student athlete or a person acting on behalf of the student athlete initiates communication with the individual. In addition, no later than seven days after the contact, the individual must: 1) apply for registration as an athletic agent; and 2) notify the athletic director of the student athlete's educational institution or the student athlete's head coach about the contact.

The bill requires DATCP to register as an athletic agent an individual who submits specified information to DATCP, including information about the individual's representation of student athletes and the individual's business as an athletic agent. In addition, the individual may not have an arrest or conviction record, the circumstances of which substantially relate to acting as an athletic agent. Also, the individual must have malpractice liability insurance coverage of no less than $100,000 per occurrence and $100,000 for all occurrences in one year. The bill also allows DATCP to register an individual as an athletic agent if the individual is registered as an athletic agent in another jurisdiction that has registration requirements that are at least as stringent as the bill's requirements. Any individual who applies for registration must pay an application fee that is established in rules promulgated by DATCP. In addition, a registration must be renewed every two years upon payment of a renewal fee that is also established in rules and upon providing evidence that the individual has the malpractice liability insurance coverage described above.

The bill imposes certain requirements on individuals who are registered, including record-keeping requirements and a requirement to notify DATCP if a registered athletic agent is registered in good standing as an athletic agent with a professional players association. In addition, the bill requires a registered athletic agent to notify DATCP if his or her malpractice liability insurance is canceled. The bill requires DATCP to suspend a registration until such an individual notifies DATCP that he or she once again has the required malpractice liability insurance coverage. Also, the bill prohibits certain conduct by registered athletic agents, including engaging in certain conduct in order to induce a student athlete to enter into an agent contract, such as intentionally providing false or misleading information to the student athlete or providing the student athlete with anything of value. In addition, the bill prohibits a registered athletic agent from contacting a student athlete unless the athletic agent is registered as an athletic agent by a professional players association for the sport for which the athletic agent intends to negotiate a professional sport services contract for the student athlete.

The bill also imposes certain requirements on agent contracts. Under the bill, an agent contract must have specified terms and conditions, including a notice that if a student athlete enters into the contract, he or she will lose his or her eligibility to participate in his or her sport. An agent contract that does not satisfy the bill's requirements is voidable by a student athlete. In addition, a student athlete has the nonwaivable right to cancel an agent contract within seven days after entering into the contract. Also, before entering into an agent contract with a student athlete, an athletic agent must provide the student athlete with a copy of the athletic agent's registration application.

The bill allows DATCP to take disciplinary action against an individual who violates the bill's requirements or who engages in certain prohibited conduct. Disciplinary action may include suspending or revoking the individual's registration as an athletic agent. In addition, a person who violates the bill's requirements may be fined no more than $25,000 or imprisoned for no more than one year or both. Under certain circumstances, a student athlete or educational institution who is injured by an individual's violation of the bill's requirements may recover damages from the individual. Finally, the bill allows DATCP to require certain persons to provide DATCP with information that is relevant to DATCP's enforcement of the bill's requirements. In enforcing the bill's requirements, DATCP may issue subpoenas, administer oaths and conduct hearings.

For further information see the state fiscal estimate, which will be printed as an appendix to this bill.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

SB386, s. 1 Section 1. 93.135 (1) (rp) of the statutes is created to read:

SB386,3,2 93.135 (1) (rp) A registration under s. 100.179.

SB386, s. 2 Section 2. 100.179 of the statutes is created to read:

SB386,3,4 100.179 Athletic agents. (1) Definitions. In this section:

SB386,3,7 (a) "Agent contract" means an agreement under which a student athlete authorizes an athletic agent to negotiate or solicit on behalf of the student athlete a professional sports services contract or endorsement contract.

SB386,3,12 (b) "Athletic agent" means an individual who enters into an agent contract with a student athlete, who contacts, recruits or solicits a student athlete to enter into an agent contract, professional sports services contract or endorsement contract, or who acts on behalf of such an individual for the purpose of contacting, recruiting or soliciting a student athlete to enter into such a contract.

SB386,3,14 (c) "Athletic director" means the individual responsible for coordinating and administering the overall athletic program for an educational institution.

SB386,4,2 (d) "Compensation" means direct or indirect payment of anything of value, including the expectation of such payment whether or not actually received.

SB386,4,5 (e) "Contact" means a communication by any means between an athletic agent and student athlete to induce or attempt to induce the student athlete to enter into an agent contract, professional sports services contract or endorsement contract.

SB386,4,8 (f) "Educational institution" means a public or private junior or senior high school or postsecondary school that a student athlete attends, has last attended or to which the student athlete has expressed written intention to attend.

SB386,4,12 (g) "Endorsement contract" means any contract or agreement pursuant to which an individual is employed or receives compensation for any value or utility that the individual may have due to publicity, reputation, fame or following because of athletic ability or performance.

SB386,4,14 (h) "Jurisdiction" means a state or territory of the United States or another country.

SB386,4,17 (i) "Professional sports services contract" means an agreement pursuant to which a student athlete is employed or agrees to render services as a player on a professional sports team or organization or as a professional athlete.

SB386,4,20 (im) "Reciprocal registration" means a license, registration or certificate issued by another jurisdiction that allows an individual to act as an athletic agent in that jurisdiction.

SB386,4,22 (is) "Reciprocal registration renewal" means the renewal of a reciprocal registration by another jurisdiction.

SB386,4,23 (j) "Registrant" means an individual who is registered under this section.

SB386,5,3 (k) "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 sporting event, contest, exhibition or program.

SB386,5,6 (2) Registration required. (a) Except as provided in par. (b), no individual may act as an athletic agent, or contact a student athlete in this state, unless the individual is registered under sub. (3).

SB386,5,8 (b) An individual who is not registered under sub. (3) may contact a student athlete in this state if each of the following is satisfied:

SB386,5,10 1. The student athlete or a person acting on behalf of the student athlete has initiated communication with the individual.

SB386,5,13 2. No later than 7 days after the contact, the individual submits an application to the department for registration under sub. (3) and notifies the athletic director of the educational institution or the student athlete's head coach about the contact.

SB386,5,16 (3) Registration of athletic agents. (a) Except as provided in sub. (10) (b), the department shall register an individual as an athletic agent if the individual does each of the following:

SB386,5,18 1. Submits an application to the department on a form provided by the department.

SB386,5,20 2. Pays the initial registration fee established in rules promulgated under par. (e).

SB386,5,22 3. Submits evidence satisfactory to the department that he or she has in effect the malpractice liability insurance coverage specified in sub. (4) (a).

SB386,5,24 4. Subject to ss. 111.321, 111.322 and 111.335, submits evidence satisfactory to the department that he or she does not have an arrest or conviction record.

SB386,6,2 (b) An application under par. (a) shall require the applicant to provide each of the following:

SB386,6,4 1. The name of the applicant and the address of his or her principal place of business.

SB386,6,5 2. The name of the applicant's firm or employer.

SB386,6,7 3. The business or occupation in which the applicant has been engaged during the 5-year period immediately preceding the date of the application.

SB386,6,9 4. A description of the applicant's formal training, practical experience and educational background that relates to the applicant's activities as an athletic agent.

SB386,6,10 5. The names and addresses of 3 professional references.

SB386,6,13 6. The names and addresses of each individual represented by the applicant as an athletic agent during the 5-year period immediately preceding the date of the application.

SB386,6,16 7. The names and addresses of each person that has a financial interest in the operation of the applicant's business as an athletic agent, including partners, associates or profit-sharers, but not including salaried employes.

SB386,6,17 8. A description of each crime for which the applicant has been convicted.

SB386,6,21 9. A description of any administrative or judicial determination that the applicant has made a false, misleading, deceptive, untrue or fraudulent representation as an athletic agent or in any document related to the business of an athletic agent.

SB386,6,25 10. A description of any sanction, suspension or declaration of ineligibility to participate in an interscholastic or intercollegiate athletic event that has been imposed on an educational institution or student athlete in any proceeding arising from or related to the acts or omissions of the applicant.

SB386,7,4 11. A description of any proceeding involving allegations of misconduct or professional disciplinary charges against the applicant related to his or her acts or omissions as an athletic agent and a description of the outcome of each such proceeding.

SB386,7,5 12. The evidence specified in sub. (8) (a).

SB386,7,6 13. Any other information required by the department.

SB386,7,12 (c) Upon application on a form provided by the department and payment of the initial registration fee established in rules promulgated under par. (e), the department may register an individual as an athletic agent if the individual has been issued a reciprocal registration by another jurisdiction that has licensure, registration or certification requirements that the department determines are at least as stringent as the registration requirements of this section.

SB386,7,17 (d) A registration granted under par. (a) or (c) expires on January 1 of each odd-numbered year, unless the registration is renewed under this paragraph. The department may not renew a registration unless the applicant for renewal submits an application to the department on a form provided by the department and includes with the application each of the following:

SB386,7,18 1. The registration renewal fee established in rules promulgated under par. (e).

SB386,7,20 2. Evidence satisfactory to the department that the applicant has in effect the malpractice liability insurance coverage specified in sub. (4) (a).

SB386,8,2 (dm) Notwithstanding the requirement under par. (c) or (d) to submit an application on a form provided the department, an applicant under par. (c) or (d) who has been issued a reciprocal registration or a reciprocal registration renewal may submit to the department a copy of the application for reciprocal registration or reciprocal registration renewal. The department shall accept the appropriate copy submitted under this paragraph in lieu of an initial or renewal application form that is provided by the department if each of the following apply:

SB386,8,3 1. The applicant certifies that the information on the copy is current.

SB386,8,6 2. The department determines that the information required by the other jurisdiction is substantially equivalent to the information required in the initial or renewal application form provided by the department.

SB386,8,20 (e) The department shall promulgate rules establishing the amount of an initial registration fee required to be paid under pars. (a) 2. and (c) and the amount of a registration renewal fee required to be paid under par. (d). The amount of the fees shall reflect the approximate administrative and enforcement costs of the department that are attributable to the registration of athletic agents under this section. The rules shall require an applicant who has been issued a reciprocal registration or reciprocal registration renewal to pay an initial registration fee or registration renewal fee that is lower than the initial registration fee or registration renewal fee required for an applicant who has not been issued a reciprocal registration or reciprocal registration renewal if the department determines that administrative and enforcement costs that are attributable to applicants who have been issued a reciprocal registration or reciprocal registration renewal are lower than the administrative enforcement costs that are attributable to applicants who have not been issued a reciprocal registration or reciprocal registration renewal.

SB386,8,24 (4) Malpractice liability insurance. (a) Each individual registered as an athletic agent under this section shall have in effect malpractice liability insurance coverage in an amount that is not less than $100,000 per occurrence and $100,000 for all occurrences in one year.

SB386,9,3 (b) No later than 30 days after a registrant receives from an insurer notice of cancellation of the malpractice liability insurance coverage specified in par. (a), the the registrant shall do one of the following:

SB386,9,5 1. Provide the department with evidence that he or she has in effect the malpractice liability insurance coverage specified in par. (a).

SB386,9,7 2. Notify the department that he or she does not have in effect the malpractice liability insurance coverage specified in par. (a).

SB386,9,11 (c) The department shall suspend the registration of an individual who makes a notification under par. (b) 2. and shall reinstate the registration upon receiving notice that the individual has in effect the malpractice liability insurance coverage specified in par. (a).

SB386,9,14 (5) Agent contracts. (a) An agent contract shall be in writing, signed by the student athlete and, if the student athlete is under the age of 18 years, signed by the student athlete's parent or guardian.

SB386,9,15 (b) An agent contract shall include each of the following:

SB386,9,17 1. A recitation of the compensation that the athletic agent will receive from the student athlete.

SB386,9,20 2. A description of any compensation that the athletic agent will receive from a source other than the student athlete for providing services under the agent contract.

SB386,9,22 3. The name of any person who will share or benefit from the compensation received from the student athlete.

SB386,9,24 4. A description of any expenses for which the student athlete agrees to reimburse the athletic agent.

SB386,10,2 5. A description of the professional services to be provided to the student athlete.