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AB-1518 Student athletes: contracts.(2019-2020)

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Date Published: 09/04/2019 09:00 PM
AB1518:v95#DOCUMENT

Assembly Bill No. 1518
CHAPTER 222

An act to amend Sections 18895.2, 18897.6, and 18897.73 of, and to add Section 18897.74 to, the Business and Professions Code, relating to athletes.

[ Approved by Governor  September 04, 2019. Filed with Secretary of State  September 04, 2019. ]

LEGISLATIVE COUNSEL'S DIGEST


AB 1518, Chu. Student athletes: contracts.
Existing law, the Miller-Ayala Athlete Agents Act, regulates various activities of an athlete agent in representing student athletes and professional athletes, including contact with athletes, contract negotiations, and required disclosures with the Secretary of State. Existing law removes an individual’s status as a student athlete, if they enter into a valid agent contract, a valid endorsement contract, or a valid professional sports services contract. Existing law prohibits an athlete agent or their representative from offering or providing money or any other thing of benefit or value to a student athlete.
This bill would authorize a student athlete to enter into a contract with an athlete agent without losing their status as a student athlete, if the contract complies with the policy of the student athlete’s educational institution and the bylaws of the National Collegiate Athletic Association and includes a provision that the contract terminates if the student chooses to not seek employment with a professional sports team or organization as a professional athlete, and instead returns to school. The bill would authorize an athlete agent or their representative to offer or provide money or any other thing of benefit or value to a student athlete if it is authorized and complies with the policy of the student athlete’s educational institution and the bylaws of the National Collegiate Athletic Association.
This bill would require an athlete agent who provides money or any other thing of value to a student athlete to file an itemized report of those payments with the athletic director, or their designee, of the student athlete’s educational institution or the educational institution where the student athlete intends to enroll, as specified.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: NO   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 It is the intent of the Legislature that the provisions of this measure be equitable to all student athletes, regardless of gender, and that the measure be enacted in a manner that complies with Title IX of the Education Amendments of 1972 to the Civil Rights Act of 1964 and Section 8 of Article I of the California Constitution.

SEC. 2.

 Section 18895.2 of the Business and Professions Code is amended to read:

18895.2.
 The following definitions govern the construction of this chapter:
(a) “Agent contract” means any contract or agreement pursuant to which a person authorizes or empowers an athlete agent to negotiate or solicit on behalf of the person with one or more professional sports teams or organizations for the employment of the person by one or more professional sports teams or organizations, or to negotiate or solicit on behalf of the person for the employment of the person as a professional athlete.
(b) (1) “Athlete agent” means any person who, directly or indirectly, recruits or solicits an athlete to enter into any agent contract, endorsement contract, financial services contract, or professional sports services contract, or for compensation procures, offers, promises, attempts, or negotiates to obtain employment for any person with a professional sports team or organization or as a professional athlete.
(2) (A) “Athlete agent” does not include a person licensed as an attorney, dealer in securities, financial planner, insurance agent, real estate broker or sales agent, or tax consultant, or other professional person, when the professional person offers or provides the type of services customarily provided by that profession, except and solely to the extent that the professional person also recruits or solicits an athlete to enter into any agent contract, endorsement contract, or professional sports services contract, or for compensation procures, offers, promises, attempts, or negotiates to obtain employment for any person with a professional sports team or organization or as a professional athlete.
(B) “Athlete agent” also does not include any person acting solely on behalf of a professional sports team or organization.
(C) “Athlete agent” also does not include a talent agency as defined in subdivision (a) of Section 1700.4 of the Labor Code and licensed by the Labor Commissioner pursuant to Chapter 4 (commencing with Section 1700) of Part 6 of Division 2 of the Labor Code, except as otherwise provided in this paragraph. “Athlete agent” includes a talent agency that (i) directly or indirectly recruits or solicits a student athlete to enter into an agent contract, endorsement contract, financial services contract, or professional sports services contract, or (ii) for compensation, procures, offers, promises, attempts, or negotiates to obtain employment for any person to perform on-field play with a professional sports team or organization.
(3) Sections 18896.6, 18897.6, and 18897.63 do not apply to an individual acting as an athlete agent solely for their spouse, child, foster child, ward, or grandchild.
(c) “Employment as a professional athlete” includes employment pursuant to an endorsement contract or a professional sports services contract.
(d) “Endorsement contract” means any contract or agreement pursuant to which a person is employed or receives remuneration for any value or utility that the person may have because of publicity, reputation, fame, or following obtained because of athletic ability or performance.
(e) “Financial services” means the making or execution of an investment or other financial decision, or counseling as to a financial decision.
(f) “Negotiate” includes any contact on behalf of any athlete with a professional sports team or organization or on behalf of any person with any other person who employs or potentially may employ the person as a professional athlete, regardless of whether the contact is made in person, in writing, electronically, through representatives or employees, or in any other manner. “Negotiate” also includes being present during any discussion of an endorsement contract or professional sports services contract with representatives of the professional sports team or organization or potential or actual employer.
(g) “Person” means any individual, company, corporation, association, partnership, limited liability company, or their agents or employees.
(h) “Professional sports services contract” means any contract or agreement pursuant to which a person is employed or agrees to render services as a player on a professional sports team or organization or as a professional athlete.
(i) (1) “Student athlete” means any individual admitted to or enrolled as a student, in an elementary or secondary school, college, university, or other educational institution if the student participates, or has informed the institution of an intention to participate, as an athlete in a sports program where the sports program is engaged in competition with other educational institutions.
(2) “Student athlete” does not include any person who has entered into a valid agent contract, a valid endorsement contract, or a valid professional sports services contract, unless that contract is entered into in accordance with subdivision (b) of Section 18897.73.
(3) “Student athlete” does not include any student of a college or university whose eligibility to participate in an intercollegiate sport has terminated, as determined by the governing body of the state or national association for the promotion and regulation of intercollegiate athletics of which the student’s college or university is a member.

SEC. 3.

 Section 18897.6 of the Business and Professions Code is amended to read:

18897.6.
 No athlete agent or athlete agent’s representative or employee shall, directly or indirectly, offer or provide money or any other thing of benefit or value to a student athlete, unless it is authorized by, and is in compliance with, an official written policy of the elementary or secondary school, college, university, or other educational institution of the student athlete and the terms of the contract comply with the bylaws of the National Collegiate Athletic Association.

SEC. 4.

 Section 18897.73 of the Business and Professions Code is amended to read:

18897.73.
 (a) Every agent contract, endorsement contract, or professional sports services contract entered into by a student athlete shall contain, in close proximity to the signature of the student athlete, a notice in at least 10-point boldface type stating:
“WARNING TO THE STUDENT ATHLETE: WHEN YOU SIGN THIS CONTRACT, YOU LIKELY WILL IMMEDIATELY AND PERMANENTLY LOSE YOUR ELIGIBILITY TO COMPETE IN INTERSCHOLASTIC OR INTERCOLLEGIATE SPORTS. YOU MUST GIVE THE PRINCIPAL, PRESIDENT, OR OTHER CHIEF ADMINISTRATOR OF YOUR EDUCATIONAL INSTITUTION WRITTEN NOTICE THAT YOU HAVE ENTERED INTO THIS CONTRACT WITHIN 72 HOURS, OR BEFORE YOU PRACTICE FOR OR PARTICIPATE IN ANY INTERSCHOLASTIC OR INTERCOLLEGIATE SPORTS EVENT, WHICHEVER OCCURS FIRST. DO NOT SIGN THIS CONTRACT UNTIL YOU HAVE READ IT AND FILLED IN ANY BLANK SPACES. YOU MAY CANCEL THIS CONTRACT BY NOTIFYING THE ATHLETE AGENT, OR OTHER PARTY TO THIS CONTRACT, IN WRITING OF YOUR DESIRE TO CANCEL NOT LATER THAN THE 15TH DAY AFTER THE DATE YOU SIGN THIS CONTRACT. HOWEVER, EVEN IF YOU CANCEL THIS CONTRACT, THE FEDERATION OR ASSOCIATION TO WHICH YOUR EDUCATIONAL INSTITUTION BELONGS MAY NOT RESTORE YOUR ELIGIBILITY.”

(b) This section shall not apply to a contract described in subdivision (a) that meets all of the following requirements:
(1) The contract is authorized by, and is in compliance with, an official written policy of an elementary or secondary school, college, university, or other educational institution of the student athlete.
(2) The terms of the contract comply with the bylaws of the National Collegiate Athletic Association.
(3) The contract terminates if the student chooses to not seek employment with a professional sports team or organization as a professional athlete and instead returns to school.
(c) This section does not preclude an educational institution from adopting and enforcing stricter policies, rules, or regulations addressing athlete agent solicitations or athlete agent interactions with student athletes attending their institution.

SEC. 5.

 Section 18897.74 is added to the Business and Professions Code, to read:

18897.74.
 (a) An athlete agent who provides money or any other thing of value to a student athlete as authorized by this article shall file an itemized report of those payments with the athletic director, or their designee, of the student athlete’s educational institution or the educational institution where the student athlete intends to enroll. The report shall be submitted by the fifth day of the month following the month the athlete agent provided the payments. The reporting of payments shall be in the format required by the educational institution.
(b) This section does not preclude an educational institution from adopting and enforcing stricter policies, rules, or regulations addressing athlete agent solicitations or athlete agent interactions with student athletes attending their institution.