Bill S.825

SENATE DOCKET, NO. 1808 FILED ON: 1/19/2023

SENATE . . . . . . . . . . . . . . No. 825

By Mr. Finegold, a petition (accompanied by bill, Senate, No. 825) of Barry R. Finegold for legislation relative to college athlete compensation and agent regulation. Higher Education.

[SIMILAR MATTER FILED IN PREVIOUS SESSION
SEE SENATE, NO. 2813 OF 2021-2022.]

The Commonwealth of Massachusetts

_______________

In the One Hundred and Ninety-Third General Court
(2023-2024)

_______________

An Act relative to college athlete compensation and agent regulation.

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:

SECTION 1. The General Laws are hereby amended by inserting after chapter 78A the following chapter:-

CHAPTER 78B. Student-Athlete Compensation and Agent Regulation

Section 1. Definitions

As used in this chapter, the following words shall have the following meanings, unless the context clearly requires otherwise:

“Agency contract”, an agreement in which a student-athlete authorizes a person to negotiate or solicit on behalf of the student-athlete any of the following:

(i) a professional-sports-services contract;

(ii) an endorsement contract; or

(iii) a name, image or likeness agreement.

“Athlete agent”, an individual, whether or not registered pursuant to section 32 of chapter 9, who:

(i) directly or indirectly recruits or solicits a student-athlete to enter into an agency contract;

(ii) for compensation, procures employment or offers, promises, attempts or negotiates to obtain employment for a student-athlete as a professional athlete or member of a professional sports team or organization;

(iii) for compensation or in anticipation of compensation related to a student-athlete’s participation in athletics: (1) serves the student-athlete in an advisory capacity on a matter related to finances, business pursuits or career management decisions, unless the individual is an employee of an educational institution acting exclusively as an employee of the educational institution for the benefit of the educational institution; or (2) manages the business affairs of the student-athlete by providing assistance with bills, payments, contracts or taxes; or

(iv) in anticipation of representing a student-athlete for a purpose related to the student-athlete’s participation in athletics: (1) gives consideration to the student-athlete or another individual; (2) serves the student-athlete in an advisory capacity on a matter related to finances, business pursuits or career management decisions; or (3) manages the business affairs of the student-athlete by providing assistance with bills, payments, contracts or taxes.

An individual shall not be considered an “athlete agent” if the individual:

(i) acts solely on behalf of a professional sports team or organization;

(ii) is the spouse, parent or legal guardian of the student-athlete; or

(iii) is a licensed, registered or certified professional and offers or provides services to a student-athlete customarily provided by members of the profession; provided, however, that the individual does not: (1) recruit or solicit the student-athlete to enter into an agency contract; (2) for compensation, procure employment or offer, promise, attempt or negotiate to obtain employment for the student-athlete as a professional athlete or member of a professional sports team or organization; or (3) receive consideration for providing the services calculated using a different method than for an individual who is not a student-athlete.

“Athletic director”, the individual responsible for administering the overall athletic program of an educational institution or, if an educational institution has separately administered athletic programs for male student-athletes and female student-athletes, the athletic program for male student-athletes or the athletic program for female student-athletes, as appropriate.

“College”, a university, community college, junior college, graduate school or other public or private institution of higher education.

“Educational institution”, a college, secondary school, technical or vocational school, school district as defined in section 2 of chapter 70 or public or private elementary school.

“Endorsement contract”, 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 because of athletic ability or performance.

“Enrolled”, registered for courses and attending athletic practice or class.

“Intercollegiate sport”, a sport played at the collegiate level for which eligibility requirements for participation by a student-athlete are established by a national association that promotes or regulates collegiate athletics.

“Interscholastic sport”, a sport played between educational institutions that are not colleges.

“Licensed, registered or certified professional”, an individual licensed, registered or certified as an attorney, dealer in securities, financial planner, insurance agent, real estate broker or sales agent, tax consultant, accountant or member of a profession, other than that of athlete agent, who is licensed, registered or certified by the commonwealth or a nationally recognized organization that licenses, registers or certifies members of the profession on the basis of experience, education or testing.

“Name, image or likeness agreement”, an express or implied agreement, oral or in a record, under which a third party provides money or any other thing of value in exchange for use of a student-athlete's name, image or likeness.

“Person”, an individual, estate, business or nonprofit entity, public corporation, government or governmental subdivision, agency or instrumentality, or other legal entity.

“Professional-sports-services contract”, an agreement under which an individual is employed as a professional athlete or agrees to render services as a player on a professional sports team or with a professional sports organization.

“Record”, information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.

“Recruit or solicit”, attempt to influence the choice of an athlete agent by a student-athlete or, if the student-athlete is a minor, a parent or guardian of the student-athlete. “Recruit or solicit” shall not include giving advice on the selection of a particular athlete agent in a family, coaching or social situation, unless the individual giving the advice does so because of the receipt or anticipated receipt of an economic benefit, directly or indirectly, from the athlete agent.

“Registration”, registration as an athlete agent pursuant to section 32 of chapter 9.

“Sign”, intentionally authenticate or adopt a record by:

(i) executing or adopting a tangible symbol; or

(ii) attaching to or logically associating with the record an electronic symbol, sound or process.

“Student-athlete”, an individual who engages in, is eligible to engage in or may be eligible in the future to engage in any intercollegiate or interscholastic sport; provided, however, that an individual shall not be considered a “student-athlete” with respect to a particular intercollegiate or interscholastic sport in which the individual is permanently ineligible to participate.

Section 2. Name, Image and Likeness Compensation

(a) A college shall not uphold any rule, requirement, standard or other limitation, except as otherwise provided for in this section, that prevents a student-athlete enrolled in that college from earning compensation as a result of the use of the student-athlete's name, image or likeness. A student-athlete's scholarship eligibility shall not be affected by the student-athlete earning compensation pursuant to this section as a result of the use of the student-athlete's name, image or likeness.

(b) An athletic association, conference or other group or organization with authority over intercollegiate sports, including, but not limited to, the National Collegiate Athletic Association, shall not prevent:

(i) a student-athlete enrolled in a college from earning compensation as a result of the use of the student-athlete's name, image or likeness; or

(ii) a college from participating in intercollegiate sports as a result of a student-athlete earning compensation from third parties for the use of the student’s name, image or likeness.

(c) A college, athletic association, conference or other group or organization with authority over intercollegiate sports shall not prevent a student-athlete enrolled in a college from obtaining professional representation in relation to agency contracts or other legal matters, including, but not limited to, representation provided by athlete agents or legal representation provided by an attorney.

(d) A scholarship from the college in which a student-athlete is enrolled that provides the student-athlete with the cost of attendance at that college shall not be considered compensation for the purposes of this section. A scholarship shall not be revoked as a result of earning compensation or obtaining athlete agent or legal representation pursuant to this section.

(e) A student-athlete enrolled in a college shall not enter into a name, image or likeness agreement if a provision of the name, image or likeness agreement is in conflict with a provision of the student-athlete's team contract; provided, however, that following the effective date of this section, a new team contract or a renewal or modification of a team contract of a college's athletic program shall not prevent a student-athlete from using the student-athlete's name, image or likeness for a commercial purpose when the student-athlete is not engaged in official team activities; and provided, further, that a student-athlete who enters into a name, image or likeness agreement shall disclose the name, image or likeness agreement to the athletic director of the student-athlete's college.

Section 3. Professional Sports Drafts

(a) An athletic association, conference, or other group or organization with authority over intercollegiate sports, including, but not limited to, the National Collegiate Athletic Association, shall not prevent a student-athlete from: (i) entering a professional sports draft while still enrolled in a college; or (ii) returning to a college and participating in intercollegiate sports after the student-athlete has been drafted to a professional sports team.

(b) A college shall not revoke a student-athlete's scholarship or eligibility to participate in intercollegiate sports with the college as a result of the student-athlete being drafted to a professional sports team or earning compensation from a professional sports team to which the student-athlete was drafted.

Section 4. Requirements for Contracts Between Student-Athletes and Agents

(a) An agency contract between an athlete agent and a student-athlete shall be in a record that is signed by the parties; provided, however, that the record shall be signed by the parent or guardian of the student-athlete if the student-athlete is a minor. The agency contract shall include, but not be limited to, the following:

(i) a statement that the athlete agent is registered as an athlete agent in the commonwealth pursuant to section 32 of chapter 9 and a list of all other states in which the agent is registered as an athlete agent;

(ii) 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 agency contract and any other consideration the athlete agent has received or will receive from any other source for entering into the agency contract or for providing the services;

(iii) the name of any person who: (1) is not listed in the athlete agent's application for registration or renewal of registration pursuant to section 32 of chapter 9; and (2) will be compensated because the student-athlete signed the agency contract;

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

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

(vi) the duration of the agency contract;

(vii) the date of execution of the agency contract; and

(viii) a conspicuous notice in boldface type informing the student-athlete that by signing the agency contract: (1) the student-athlete and the athlete agent are both obligated to notify the student-athlete’s athletic director pursuant to section 5 of this chapter; and (2) the student-athlete, or, if the student-athlete is a minor, the parent or guardian of the student-athlete, has the right to cancel the contract pursuant to section 6 of this chapter.

(b) An agency contract shall be accompanied by a separate record signed by the student-athlete or, if the student-athlete is a minor, the parent or guardian of the student-athlete acknowledging receipt and understanding of the notice described in clause (viii) of subsection (a) of this section.

(c) At the time an agency contract is executed, the athlete agent shall give the student-athlete or, if the student-athlete is a minor, the parent or guardian of the student-athlete a copy of the contract and the separate acknowledgment required by subsection (b).

Section 5. Notice to Educational Institution

(a) For the purposes of this section, “communicating or attempting to communicate” shall mean contacting or attempting to contact by an in-person meeting, a record or any other method that conveys or attempts to convey a message.

(b) Not later than 72 hours after entering into an agency contract or before the next scheduled interscholastic or intercollegiate sports event in which the student-athlete may participate, whichever occurs first, both the athlete agent and the student-athlete shall inform the athletic director of the educational institution at which the student-athlete is enrolled or at which the athlete agent has reasonable grounds to believe the student-athlete intends to enroll. Notice provided by the athlete agent shall consist of a record of the existence of the agency contract.

(c) If an athlete agent enters into an agency contract with a student-athlete, or, if the student-athlete is a minor, the parent or guardian of the student-athlete, and the student-athlete subsequently enrolls at an educational institution, the athlete agent shall notify the athletic director of the educational institution of the existence of the contract not later than 72 hours after the athlete agent knew or should reasonably have known the student-athlete enrolled.

(d) If an athlete agent has a relationship with a student-athlete before the student-athlete enrolls in an educational institution and the student-athlete receives an athletic scholarship from the educational institution, the agent shall notify the athletic director of the educational institution of the relationship not later than 10 days after the enrollment if the athlete agent knows or reasonably should have known of the enrollment and:

(i) the relationship was motivated in whole or in part by the intention of the athlete agent to recruit or solicit the student-athlete, or, if the student-athlete is a minor, a parent or guardian of the student-athlete to enter into an agency contract in the future; or

(ii) the athlete agent directly or indirectly recruited or solicited the student-athlete, or, if the student-athlete is a minor, a parent or guardian of the student-athlete to enter into an agency contract before the enrollment.

(e) An athlete agent shall give notice in a record to the athletic director of the educational institution at which a student-athlete is enrolled before the athlete agent communicates or attempts to communicate with:

(i) the student-athlete, or, if the student-athlete is a minor, a parent or guardian of the student-athlete, to influence the student-athlete or parent or guardian to enter into an agency contract; or

(ii) another individual to have that individual influence the student-athlete, or, if the student-athlete is a minor, the parent or guardian of the student-athlete, to enter into an agency contract.

(f) If a communication or attempt to communicate with an athlete agent is initiated by a student-athlete or another individual on behalf of the student-athlete, the athlete agent shall notify in a record the athletic director of any educational institution at which the student-athlete is enrolled. The notification shall be made not later than 10 days after the communication or attempt.

(g) An educational institution that becomes aware of a violation of this section by an athlete agent shall give notice about the violation to the secretary of the commonwealth and any professional league or players association with which the educational institution is aware the athlete agent is licensed or registered.

Section 6. Student-Athlete's Right to Cancel a Contract

(a) A student-athlete or, if the student-athlete is a minor, the parent or guardian of the 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.

(b) Any agreement that purports to waive or limit in any way the right of a student-athlete, or, if the student-athlete is a minor, the parent or guardian of the student-athlete, to cancel an agency contract pursuant to this section shall be deemed contrary to public policy and the agreement shall be void and unenforceable.

(c) If a student-athlete, parent or guardian cancels an agency contract, the student-athlete shall not be required to pay any consideration under such contract or return any consideration received from the athlete agent to induce the student-athlete to enter into such contract.

Section 7. Prohibited Conduct

(a) An athlete agent, with the intent to induce a student-athlete or, if the student-athlete is a minor, a parent or guardian of the student-athlete to enter into an agency contract, shall not:

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

(ii) furnish anything of value to a student-athlete or any other individual before the student-athlete or, if the student-athlete is a minor, the parent or guardian of the student-athlete enters into the agency contract.

(b) An athlete agent shall not willfully:

(i) initiate contact, directly or indirectly, with a student-athlete or, if the student-athlete is a minor, a parent or guardian of the student-athlete to recruit or solicit the student-athlete, parent or guardian to enter an agency contract, prior to registering as an athlete agent pursuant to section 32 of chapter 9;

(ii) predate or postdate an agency contract; or

(iii) encourage another individual to do or assist another individual in doing any of the acts described in this subsection.

(c) Athlete agents representing student-athletes shall comply with the federal Sports Agent Responsibility and Trust Act, 15 U.S.C. §7801-7807, in their relationships with student-athletes.

Section 8. Penalties

(a) A student-athlete or, if the student-athlete is a minor, the parent or guardian of the student-athlete may bring an action for damages against an athlete agent if the student-athlete is adversely affected by an act or omission of the athlete agent in violation of this section. A student-athlete is adversely affected by an act or omission of the athlete agent only if, because of the act or omission, the individual who was a student-athlete at the time of the act or omission and was enrolled in an educational institution:

(i) is suspended or disqualified from participation in an interscholastic or intercollegiate sport by or under the rules of a state or national federation or association that promotes or regulates interscholastic sports or intercollegiate sports; or

(ii) suffers financial damage.

(b) A plaintiff that prevails in an action under this section may recover actual damages, reasonable attorneys’ fees and costs incurred in such action. An athlete agent found liable under this section forfeits any right of payment for anything of benefit or value provided to the student-athlete and shall refund any consideration paid to the athlete agent by or on behalf of the student-athlete.

SECTION 2. Chapter 9 of the General Laws is hereby amended by inserting after section 31 the following section:-

Section 32. Athlete Agent Registration

(a) For the purposes of this section the following terms shall, unless the context clearly requires otherwise, have the same meanings as such terms are defined in section 1 of chapter 78B of the General Laws: (i) “agency contract”; (ii) “athlete agent”; (iii) “college”; (iv) “educational institution”; (v) “endorsement contract”; (vi) “intercollegiate sport”; (vii) “interscholastic sport”; (viii) “licensed, registered or certified professional”; (ix) “name, image or likeness agreement”; (x) “person”; (xi) “professional-sports-services contract”; (xii) “record”; (xiii) “recruit or solicit”; (xiv) “registration”; (xv) “sign”; and (xvi) “student-athlete”.

(b) Except as otherwise provided in subsection (c), a person shall not act as an athlete agent in the commonwealth without holding a certificate of registration issued pursuant to this section.

(c) Before being issued a certificate of registration pursuant to this section, a person may act as an athlete agent in the commonwealth for all purposes except signing an agency contract, if: (i) a student-athlete or another person acting on behalf of the student-athlete initiates communication with such individual; and (ii) within 7 days after an initial act that requires an individual to register as an athlete agent, such individual submits an application for registration as an athlete agent under this section.

(d) An applicant for registration or renewal of registration shall submit an application therefor to the state secretary in such form as shall be prescribed by the state secretary. An application filed pursuant to this section shall be a public record pursuant to chapter 66. The application shall be in the name of an individual and signed by the applicant under penalty of perjury and shall include, but not be limited to, the following:

(i) the name of the applicant;

(ii) the applicant’s contact information, including, but not limited to: (1) the address of the applicant’s principal place of business; (2) the applicant's work and mobile telephone numbers; and (3) any means of communicating electronically with the applicant, including an electronic mail address and personal and business or employer websites;

(iii) the name of the applicant’s business or employer, if applicable;

(iv) any business or occupation engaged in by the applicant for the 5 years preceding the date of submission of the application, including any professional or occupational license, registration or certification held by the applicant during that time;

(v) a description of the applicant’s: (1) formal training as an athlete agent; (2) practical experience as an athlete agent; and (3) educational background relating to the applicant’s activities as an athlete agent;

(vi) the names and addresses of 3 individuals not related to the applicant who are willing to serve as references;

(vii) the name, intercollegiate sport or interscholastic sport and last-known team for each student-athlete for whom the applicant acted as an athlete agent during the 5 years preceding the date of submission of the application, and, if any such student-athlete is a minor, the name of the parent or guardian of the minor;

(viii) the names and addresses of all persons who are: (1) with respect to the athlete agent’s business if it is not a corporation, the partners, members, officers, managers, associates or profit-sharers having an interest of 5 percent or greater of the business; and (2) with respect to a corporation employing the athlete agent, the officers, directors and any shareholder of the corporation having an interest of 5 percent or greater;

(ix) whether the applicant or any person named pursuant to clause (viii) has been convicted of a crime that, if committed in this state, would be a crime involving moral turpitude or a felony, identifying such crime if applicable;

(x) whether there has been any administrative or judicial determination that the applicant or any person named pursuant to clause (viii) has made a false, misleading, deceptive or fraudulent representation;

(xi) any instance in which the conduct of the applicant or any person named pursuant to clause (viii) resulted in the imposition of a sanction, suspension or declaration of ineligibility to participate in an interscholastic sport or intercollegiate sport on a student-athlete or educational institution;

(xii) any sanction, suspension or disciplinary action taken against the applicant or any person named pursuant to clause (viii) by a governmental or quasi-governmental licensing entity or adjudicatory process arising out of occupational or professional conduct;

(xiii) 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 pursuant to clause (viii) as an athlete agent in any state;

(xiv) each state in which the applicant currently is registered as an athlete agent or has applied to be registered as an athlete agent; and

(xv) any additional information required by the state secretary.

(e) 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 in lieu of an application for registration or renewal in the form prescribed by the state secretary: (i) a copy of the application for registration or renewal in the other state; (ii) a statement that identifies any material change in the information on the application or verifies that there is no material change in the information, signed under penalty of perjury; and (iii) a copy of the certificate of registration from the other state.

The state secretary shall accept the application and the certificate from the other state as an application for registration or renewal in this commonwealth if:

(i) the application to the other state:

(1) was submitted in the other state within the 6 months preceding the submission of the application in this commonwealth and the applicant certifies that the information contained in the application is current or substantively corrected by the applicant’s statement identifying any material change in the information on the application;

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

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

(ii) the registration has not been revoked or suspended and no action involving the individual’s conduct as an athlete agent is pending against the individual or the individual’s registration in any state.

(f) For purposes of implementing this section, the state secretary may: (i) cooperate with national organizations concerned with athlete agent issues and agencies in other states which register athlete agents to develop a common registration form and determine which states have laws that are substantially similar to or more restrictive than this section; and (ii) exchange information, including information related to actions taken against registered athlete agents or their registrations, with those organizations and agencies.

(g) Except as otherwise provided in this section, the state secretary shall issue a certificate of registration to an individual who complies with the requirements of this section.

(h) The state secretary may refuse to issue a certificate of registration if the state secretary determines that the applicant has engaged in conduct that has an adverse effect on the applicant’s fitness to act as an athlete agent. In making the determination, the state secretary may consider whether the applicant has:

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

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

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

(iv) engaged in conduct prohibited by this section or section 7 of chapter 78B;

(v) 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;

(vi) engaged in conduct the consequence of which was that a sanction, suspension or declaration of ineligibility to participate in an interscholastic sport or intercollegiate sport was imposed on a student-athlete or educational institution; or

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

(i) A certificate of registration or a renewal of a registration shall be valid for 2 years.

(j) The state secretary may suspend, revoke or refuse to renew a registration for conduct that would have justified denial of registration under this section.

(k) The state secretary may deny, suspend, revoke or refuse to renew a certificate of registration or licensure only after proper notice and an opportunity for a hearing as provided pursuant to chapter 30A.

(l) An application for registration or renewal of registration shall be accompanied by a fee to be determined by the commissioner of administration pursuant to section 3B of chapter 7.

(m) An athlete agent shall retain the following records for a period of 5 years and the records shall be open to inspection by the state secretary during normal business hours:

(i) the name and address of each student-athlete represented by the athlete agent and, if any such student-athlete is a minor, the name and address of a parent or guardian of the represented student-athlete;

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

(iii) any direct costs incurred by the athlete agent in the recruitment or solicitation of a student-athlete or, if the student-athlete is a minor, a parent or guardian of the student-athlete to enter into an agency contract.

(n) The state secretary may assess a civil penalty against an athlete agent not to exceed $50,000 for a violation of the registration provisions of this section.

Name:	District/Address:
Barry R. Finegold	Second Essex and Middlesex