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


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-Enrolled.html
 
 
  H.B. No. 1123
 
 
 
 
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)  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;
                     (B)  an administrative or a judicial
  determination finding the applicant or other person made a false,
  misleading, deceptive, or fraudulent representation;
                     (C)  a sanction or suspension related to
  occupational or professional conduct;
                     (D)  a denial of an application for a certificate
  of registration or license as an athlete agent; or
                     (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)  conviction of 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
  conviction 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.
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
 
         I certify that H.B. No. 1123 was passed by the House on April
  26, 2011, by the following vote:  Yeas 114, Nays 34, 2 present, not
  voting; and that the House concurred in Senate amendments to H.B.
  No. 1123 on May 18, 2011, by the following vote:  Yeas 140, Nays 0,
  3 present, not voting.
 
  ______________________________
  Chief Clerk of the House   
 
         I certify that H.B. No. 1123 was passed by the Senate, with
  amendments, on May 16, 2011, by the following vote:  Yeas 29, Nays
  2.
 
  ______________________________
  Secretary of the Senate   
  APPROVED: __________________
                  Date       
   
           __________________
                Governor       
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