Bill Text: TX HB1123 | 2011-2012 | 82nd Legislature | Comm Sub

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Relating to the regulation of athlete agents; providing administrative and criminal penalties.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Passed) 2011-06-17 - Effective on 9/1/11 [HB1123 Detail]

Download: Texas-2011-HB1123-Comm_Sub.html

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By: Dutton (Senate Sponsor - West) H.B. No. 1123
(In the Senate - Received from the House April 27, 2011;
May 2, 2011, read first time and referred to Committee on Business
and Commerce; May 11, 2011, reported favorably, as amended, by the
following vote: Yeas 9, Nays 0; May 11, 2011, sent to printer.)

COMMITTEE AMENDMENT NO. 1 By: Lucio
Amend H.B. 1123 (House Engrossed) as follows:
(1) On page 2, lines 41-42, strike the following:
"an arrest for a crime that in this state is an offense other
than a Class C misdemeanor;"
(2) On page 2, lines 46-53, reletter the paragraphs of
Section 2051(b)(3), Occupations Code, accordingly.
(3) On page 3, line 55, strike "arrest for" and substitute
"conviction of".
(4) On page 3, line 62, strike "the arrest" and substitute
"conviction".
A BILL TO BE ENTITLED
AN ACT
relating to the regulation of athlete agents; providing
administrative and criminal penalties.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 2051.001, Occupations Code, is amended
by amending Subdivision (3) and adding Subdivision (5-a) to read as
follows:
(3) "Athlete agent" means an individual [a person]
who:
(A) for compensation, directly or indirectly
recruits or solicits an athlete to enter into an agent contract, a
financial services contract, or a professional sports services
contract with that individual [person] or another person; or
(B) for a fee, procures, offers, promises, or
attempts to obtain employment for an athlete with a professional
sports team.
(5-a) "National professional sports association"
means an organization that licenses or certifies athlete agents to
represent athletes in a particular professional sport. The term
includes the National Football League Players Association,
National Basketball Players Association, Major League Baseball
Players Association, National Hockey League Players' Association,
and United States Soccer Federation.
SECTION 2. Sections 2051.052(a) and (b), Occupations Code,
are amended to read as follows:
(a) The secretary of state shall[, at least once a year,]
publish on the secretary of state's Internet website information
that prescribes the compliance responsibilities of an institution
of higher education under this chapter.
(b) The secretary shall notify [mail, return receipt
requested, a copy of the compliance responsibilities published
under Subsection (a) to] the athletic director or other appropriate
official of each institution of higher education of any change to
the compliance responsibilities of the institution under this
chapter.
SECTION 3. Section 2051.101, Occupations Code, is amended
by amending Subsections (a) and (b) and adding Subsections (a-1),
(a-2), (d), and (e) to read as follows:
(a) Except as provided by Subsection (b), an individual [a
person] may not act as an athlete agent in this state or represent
that the individual [person] is an athlete agent in this state
unless the individual [person] holds a certificate of registration
under this chapter as:
(1) a professional athlete agent; or
(2) a limited athlete agent.
(a-1) An individual may not register as a professional
athlete agent under this chapter unless the individual is certified
as an agent by a national professional sports association.
(a-2) An individual who is not certified as an agent by a
national professional sports association may register only as a
limited athlete agent. A limited athlete agent may only represent
an athlete in a sport that does not have a national professional
sports association.
(b) Before the issuance of a certificate of registration
under this chapter, an individual [a person] may act as an athlete
agent in this state for all purposes except signing an agent
contract, if:
(1) an athlete or a person acting on behalf of the
athlete initiates communication with the individual [person]; and
(2) within seven days after the date of the initial act
as an athlete agent, the individual [person] submits an application
for registration under this chapter.
(d) An agent contract with an athlete in a sport for which
there is a national professional sports association is void if the
contract is negotiated by an athlete agent holding a limited
certificate of registration.
(e) A person who is not an individual may not register as an
athlete agent in this state.
SECTION 4. Sections 2051.102(b) and (e), Occupations Code,
are amended to read as follows:
(b) An applicant must provide information required by the
secretary of state, including:
(1) the applicant's:
(A) name;
(B) principal business address;
(C) business or occupation for the five years
immediately preceding the date of application; and
(D) formal training, practical experience, and
educational background relating to the applicant's professional
activities as an athlete agent;
(2) the name, sport, and last known team for each
person the applicant represented as an athlete agent during the
five years immediately preceding the date of application;
(3) whether the applicant or a person described by
Subdivision (5) has been subject to any of the following:
(A) an arrest for a crime that in this state is an
offense other than a Class C misdemeanor;
(B) a conviction of a crime that in this state is
a Class A or Class B misdemeanor, a felony, or a crime of moral
turpitude;
(C) [(B)] an administrative or a judicial
determination finding the applicant or other person made a false,
misleading, deceptive, or fraudulent representation;
(D) [(C)] a sanction or suspension related to
occupational or professional conduct;
(E) [(D)] a denial of an application for a
certificate of registration or license as an athlete agent; or
(F) [(E)] a denial, revocation, or suspension of
a certificate of registration or license as an athlete agent;
(4) whether the applicant or a person described by
Subdivision (5) has engaged in conduct resulting in the imposition
on an athlete or educational institution of a sanction, suspension,
or declaration of ineligibility to participate in an
interscholastic or intercollegiate athletic event; [and]
(5) except as provided by Subsection (d), the name and
address of each person, except a bona fide employee on salary, who
is financially interested as a partner, associate, or profit sharer
in the applicant's business; and
(6) the name and address of each national professional
sports association that has certified the applicant as an agent.
(e) An individual [A person] seeking certification as an
athlete agent under this chapter who holds a certificate of
registration or license as an athlete agent in another state may
submit a copy of the previous application and certificate or
license instead of submitting the application required by this
section. The secretary of state shall accept the application and
the certificate or license from the other state as an application
for registration in this state if the application to the other
state:
(1) was submitted to the other state not earlier than
the 180th day before the date the application is submitted 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 the information required by this section;
and
(3) was signed by the applicant under penalty of
perjury.
SECTION 5. Sections 2051.108(b) and (e), Occupations Code,
are amended to read as follows:
(b) A renewal application must include:
(1) the name, [and] address, and telephone number of
each athlete for whom the athlete agent is performing professional
services for compensation on the date of the renewal application;
(2) the name, [and] address, and telephone number of
each athlete for whom the athlete agent has performed professional
services for compensation during the three years immediately
preceding the date of the renewal application but for whom the
athlete agent is not performing professional services on the date
of the renewal application; [and]
(3) the name and address of each national professional
sports association by which the athlete agent is currently
certified; and
(4) any other information prescribed by the secretary
of state.
(e) An individual [A person] who has submitted an
application for renewal of registration or licensure as an athlete
agent in another state may submit a copy of the application and
certificate of registration or license from the other state instead
of submitting the application required by this section. The
secretary of state shall accept the application for renewal from
the other state as an application for renewal under this section if
the application to the other state:
(1) was submitted to the other state not earlier than
the 180th day before the date the renewal application is submitted
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 the information required by this section;
and
(3) was signed by the applicant under penalty of
perjury.
SECTION 6. Subchapter C, Chapter 2051, Occupations Code, is
amended by adding Sections 2051.109 and 2051.110 to read as
follows:
Sec. 2051.109. CONTINUING NOTIFICATION REQUIREMENT. (a) A
registered athlete agent shall notify the secretary of state in
writing of the athlete agent's:
(1) arrest for a crime that in this state is an offense
other than a Class C misdemeanor; or
(2) decertification as an agent by a national
professional sports association that has become final by the
conclusion of the appeal process provided by the association.
(b) The athlete agent shall notify the secretary of state as
required under this section not later than 30 days after the date of
the arrest or the date that the decertification becomes final.
Sec. 2051.110. EFFECT OF DECERTIFICATION BY PROFESSIONAL
ASSOCIATION. The secretary of state shall revoke the certificate
of registration of an athlete agent decertified by a national
professional sports association.
SECTION 7. Section 2051.151, Occupations Code, is amended
by amending Subsections (a) and (b) and adding Subsection (a-1) to
read as follows:
(a) An athlete agent shall, before contacting an athlete or
entering into an agent contract with an athlete in this state,
deposit with the secretary of state a surety bond, in the amount of
$50,000, payable to the state and conditioned on:
(1) the athlete agent complying with this chapter;
(2) the payment of any administrative penalty assessed
under Subchapter J; and
(3) the payment of any damages awarded to an
institution of higher education or an athlete as a result of the
athlete agent offering or providing a thing of value to an athlete
or a family member of the athlete.
(a-1) An athlete agent shall, before entering into a
financial services contract with an athlete, deposit with the
secretary of state a surety bond, in the amount of $100,000, payable
to the state and conditioned on:
(1) the athlete agent complying with this chapter;
(2) the payment of money owed to an individual or group
of individuals when the athlete agent or the athlete agent's
representative or agent receives the money; and
(3) the payment of damages to an athlete caused by the
intentional misrepresentation, fraud, deceit, or unlawful or
negligent act or omission of the athlete agent or of the athlete
agent's representative or employee while acting within the scope of
the financial services contract.
(b) An athlete agent shall maintain a bond deposited under
Subsection (a) or (a-1) for not less than two years after the later
of:
(1) the date that the athlete agent ceases to provide
financial services to an athlete; or
(2) the date that the athlete agent's certificate of
registration expires or is revoked.
SECTION 8. Section 2051.201, Occupations Code, is amended
to read as follows:
Sec. 2051.201. CONTRACT FORM. (a) A registered athlete
agent must use a form approved by the secretary of state for any
agent contract or financial services contract.
(b) The secretary of state shall by rule require that, to
the extent practicable, the form for an agent contract or financial
services contract conforms to the contract form approved by the
national professional sports association for the sport in which the
athlete will be represented.
SECTION 9. Section 2051.205(a), Occupations Code, is
amended to read as follows:
(a) A registered athlete agent shall, not later than the
10th [fifth] day after the date an athlete signs an agent contract
or financial services contract, file a copy of the contract with:
(1) the secretary of state; and
(2) if the athlete is a student at an institution of
higher education, the athletic director of the athlete's
institution.
SECTION 10. Section 2051.351(a), Occupations Code, is
amended to read as follows:
(a) An athlete agent may not:
(1) publish or cause to be published:
(A) false, fraudulent, or misleading
information; or
(B) a false, fraudulent, or misleading:
(i) representation;
(ii) notice; or
(iii) advertisement;
(2) provide false information;
(3) make a false promise or representation relating to
employment;
(4) divide fees with or receive compensation from:
(A) a person exempt from registration under this
chapter under Section 2051.005; [or]
(B) a professional sports league or franchise,
including a representative or employee of the league or franchise;
or
(C) an institution of higher education,
including a representative or employee of the institution's
athletics department;
(5) enter into a written or oral agreement with an
employee of an institution of higher education in which the athlete
agent offers a thing of value to the employee for the referral of
clients by the employee;
(6) before an athlete completes the athlete's last
intercollegiate sports contest, offer a thing of value to the
athlete or an individual related to the athlete within the second
degree by affinity or consanguinity to induce the athlete to enter
into an agreement with the athlete agent in which the athlete agent
will represent the athlete;
(7) before an athlete completes the athlete's last
intercollegiate sports contest, furnish a thing of value to the
athlete or an individual related to the athlete within the second
degree by affinity or consanguinity;
(8) [(7)] except as provided by this chapter, before
an athlete completes the athlete's last intercollegiate sports
contest:
(A) directly contact the athlete; or
(B) enter into an oral or written agreement with
the athlete for the athlete agent to represent the athlete;
(9) [(8)] furnish anything of value to any person
other than the athlete or another registered athlete agent to
induce an athlete to enter into an agreement with the athlete agent;
(10) [(9)] initiate any contact with an athlete,
except as authorized by this chapter;
(11) [(10)] fail to retain or permit inspection of the
records required to be retained by Section 2051.352;
(12) [(11)] predate or postdate an agent contract;
[or]
(13) [(12)] fail to notify an athlete before the
athlete signs an agent contract that the signing may make the
athlete ineligible to participate in intercollegiate sports; or
(14) commit an act or cause a person to commit an act
on the athlete agent's behalf that causes an athlete to violate a
rule of the national association for the promotion and regulation
of intercollegiate athletics of which the athlete's institution of
higher education is a member.
SECTION 11. Section 2051.451(b), Occupations Code, is
amended to read as follows:
(b) The secretary shall determine the amount of a penalty
assessed under Subsection (a), except that the amount may not
exceed:
(1) $50,000 for a violation of Section 2051.351(a)(7)
or (14); or
(2) $25,000 for any other violation.
SECTION 12. Subchapter J, Chapter 2051, Occupations Code,
is amended by adding Section 2051.457 to read as follows:
Sec. 2051.457. FAILURE TO PAY ADMINISTRATIVE PENALTY. (a)
If an athlete agent fails to pay the administrative penalty and does
not request a hearing as provided by Section 2051.453, the
secretary of state may revoke the agent's certificate of
registration, refuse to renew the agent's certificate of
registration, or refuse to issue a certificate of registration to
the agent.
(b) If, after a hearing, an athlete agent fails to pay the
administrative penalty as required by Section 2051.454, the
secretary of state may revoke the agent's certificate of
registration, refuse to renew the agent's certificate of
registration, or refuse to issue a certificate of registration to
the agent.
SECTION 13. Section 2051.501, Occupations Code, is amended
by amending Subsection (b) and adding Subsection (c) to read as
follows:
(b) Except as provided by Subsection (c), an [An] offense
under this section is a Class A misdemeanor.
(c) An offense under this section committed by an athlete
agent who intentionally or knowingly violates Section
2051.351(a)(7) or (14) is a third degree felony.
SECTION 14. Subchapter K, Chapter 2051, Occupations Code,
is amended by adding Section 2051.502 to read as follows:
Sec. 2051.502. NOTICE OF CRIMINAL OFFENSE. The secretary
of state shall send notice of an athlete agent's conviction of an
offense under Section 2051.501 to each national professional sports
association that has certified the agent.
SECTION 15. The heading to Subchapter L, Chapter 2051,
Occupations Code, is amended to read as follows:
SUBCHAPTER L. CIVIL LIABILITY [SUIT BY INSTITUTION OF HIGHER
EDUCATION]
SECTION 16. Section 2051.551, Occupations Code, is amended
by amending Subsections (a), (b), and (c) and adding Subsection
(a-1) to read as follows:
(a) An institution of higher education adversely affected
by an athlete agent's [or former athlete's] violation of this
chapter may file suit against the athlete agent [or former athlete]
for damages.
(a-1) An athlete adversely affected by an athlete agent's
violation of Section 2051.351(a)(7) or (14) may file suit against
the athlete agent for damages.
(b) A cause of action under Subsection (a) [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 athlete].
(c) Any liability of the athlete agent [or the former
athlete] under this section is several and not joint.
SECTION 17. Section 2051.552, Occupations Code, is amended
to read as follows:
Sec. 2051.552. ADVERSELY AFFECTED. (a) An institution of
higher education is adversely affected by an athlete agent's
violation of this chapter if:
(1) the athlete agent's violation causes a national
association for the promotion and regulation of intercollegiate
athletics to disqualify or suspend the institution from
participating in intercollegiate sports contests; and
(2) the disqualification or suspension of the
institution causes the institution to:
(A) lose revenue from media coverage of sports
contests;
(B) lose the right to grant athletic scholarships
in the sport in which the institution is disqualified or suspended;
(C) lose the right to recruit athletes; or
(D) otherwise suffer an adverse financial
impact.
(b) An athlete is adversely affected by an athlete agent's
violation of Section 2051.351(a)(7) or (14) if:
(1) the athlete agent's violation causes a national
association for the promotion and regulation of intercollegiate
athletics to disqualify or suspend the athlete from participating
in intercollegiate sports contests; and
(2) the disqualification or suspension of the athlete
causes the athlete to suffer an adverse financial impact.
SECTION 18. Section 2051.553, Occupations Code, is amended
to read as follows:
Sec. 2051.553. RECOVERY. A plaintiff [An institution of
higher education] that prevails in a civil suit filed under Section
2051.551 may recover:
(1) actual damages;
(2) exemplary damages;
(3) court costs; and
(4) reasonable attorney's fees.
SECTION 19. The following sections of the Occupations Code
are repealed:
(1) Section 2051.103;
(2) Section 2051.104; and
(3) Section 2051.153.
SECTION 20. (a) A registration under Chapter 2051,
Occupations Code, in effect on the effective date of this Act
continues in effect under the former law until it expires or is
revoked, and the former law is continued in effect for that purpose.
(b) An individual who submits an application required by
Chapter 2051, Occupations Code, that is pending on the effective
date of this Act must resubmit an application as required by Chapter
2051, Occupations Code, as amended by this Act.
(c) The change in law made by this Act applies only to an
offense committed on or after the effective date of this Act. An
offense committed before the effective date of this Act is governed
by the law in effect on the date the offense was committed, and the
former law is continued in effect for that purpose. For purposes of
this section, an offense was committed before the effective date of
this Act if any element of the offense occurred before that date.
(d) Not later than January 1, 2012, the secretary of state
shall:
(1) by letter notify each institution of higher
education that would have received a copy of compliance
responsibilities by mail from the secretary under former Section
2051.052, Occupations Code, of the changes in law made by this Act;
and
(2) post on the secretary's Internet website the
compliance responsibilities of institutions of higher education
under Chapter 2051, Occupations Code, as required by Section
2051.052, Occupations Code, as amended by this Act.
SECTION 21. This Act takes effect September 1, 2011.
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