Texas 2019 - 86th Regular

Texas Senate Bill SB1127 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	86R9453 ADM-F
2	2	By: West S.B. No. 1127
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the regulation of certain professional services
8	8	provided to student athletes.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Section 2051.001, Occupations Code, is amended
11	11	by amending Subdivisions (1) and (3) and adding Subdivision (3-a)
12	12	to read as follows:
13	13	(1) "Agency [Agent] contract" means a contract or an
14	14	agreement under which an athlete authorizes a person [an athlete
15	15	agent] to:
16	16	(A) negotiate for employment on behalf of the
17	17	athlete with a professional sports team or organization; or
18	18	(B) solicit an endorsement contract on behalf of
19	19	the athlete.
20	20	(3) "Athlete agent" means an individual, regardless of
21	21	whether the individual is registered under this chapter, who:
22	22	(A) [for compensation,] directly or indirectly
23	23	recruits or solicits an athlete to enter into an agency [agent]
24	24	contract, a financial services contract, or a professional sports
25	25	services contract with that individual or another person; [or]
26	26	(B) for compensation [a fee], procures, offers,
27	27	promises, [or] attempts, or negotiates to obtain employment for an
28	28	athlete as a professional athlete or member of [with] a
29	29	professional sports team or organization or attempts to solicit an
30	30	endorsement contract for the athlete;
31	31	(C) for compensation or in anticipation of
32	32	compensation related to an athlete's employment as a professional
33	33	athlete or member of a professional sports team or organization, or
34	34	in anticipation of representing an athlete for employment as a
35	35	professional athlete or member of a professional sports team or
36	36	organization:
37	37	(i) serves the athlete in an advisory
38	38	capacity on a matter related to finances, business pursuits, or
39	39	career management decisions; or
40	40	(ii) manages the business affairs of the
41	41	athlete by providing assistance with bills, payments, contracts, or
42	42	taxes; or
43	43	(D) provides payment or other consideration to
44	44	the athlete or another person in anticipation of representing the
45	45	athlete for employment as a professional athlete or member of a
46	46	professional sports team or organization.
47	47	(3-a) "Endorsement contract" means a contract or an
48	48	agreement under which an athlete is employed or receives
49	49	consideration in exchange for allowing the other party to the
50	50	contract to use the athlete's name, likeness, or reputation to
51	51	endorse a product or service.
52	52	SECTION 2. Section 2051.005, Occupations Code, is amended
53	53	to read as follows:
54	54	Sec. 2051.005. CERTAIN PROFESSIONAL ACTIVITIES [SERVICES]
55	55	EXEMPT. This chapter does not apply to a person who:
56	56	(1) is an employee of an institution of higher
57	57	education and who, acting exclusively as an employee of and for the
58	58	benefit of that institution, serves an athlete in an advisory
59	59	capacity on a matter related to finances, business pursuits, or
60	60	career management decisions;
61	61	(2) acts exclusively on behalf of a professional
62	62	sports team or organization; or
63	63	(3) directly or indirectly recruits or solicits an
64	64	athlete to enter into a contract with the person in which, for
65	65	compensation, the person performs financial services for the
66	66	athlete if:
67	67	(A) [(1)] the person is licensed or registered by
68	68	the state as:
69	69	(i) [(A)] a dealer, agent, investment
70	70	adviser, or investment adviser representative;
71	71	(ii) [(B)] a real estate broker or
72	72	salesperson;
73	73	(iii) [(C)] an insurance agent; or
74	74	(iv) [(D)] another professional;
75	75	(B) [(2)] the financial services performed by
76	76	the person are of a type that are customarily performed by a person
77	77	licensed or registered in that profession; and
78	78	(C) [(3)] the person does not:
79	79	(i) directly or indirectly [(A)] recruit or
80	80	solicit the athlete to enter into an agency [agent] contract or a
81	81	professional sports services contract on behalf of the person, an
82	82	affiliate, a related entity, or a third party; [or]
83	83	(ii) [(B)] procure, offer, promise, [or]
84	84	attempt, or negotiate to obtain for the athlete employment as a
85	85	professional athlete or member of [with] a professional sports team
86	86	or organization; or
87	87	(iii) provide financial services to an
88	88	athlete for payment or consideration calculated using a different
89	89	method than the person uses to calculate payment or consideration
90	90	for those services when provided to an individual who is not an
91	91	athlete.
92	92	SECTION 3. Sections 2051.101(b), (c), and (d), Occupations
93	93	Code, are amended to read as follows:
94	94	(b) Before the issuance of a certificate of registration
95	95	under this chapter, an individual may act as an athlete agent in
96	96	this state for all purposes except signing an agency [agent]
97	97	contract, if:
98	98	(1) an athlete or a person acting on behalf of the
99	99	athlete initiates communication with the individual; and
100	100	(2) within seven days after the date of the initial act
101	101	as an athlete agent, the individual submits an application for
102	102	registration under this chapter.
103	103	(c) An agency [agent] contract negotiated by an
104	104	unregistered athlete agent is void.
105	105	(d) An agency [agent] contract with an athlete in a sport
106	106	for which there is a national professional sports association is
107	107	void if the contract is negotiated by an athlete agent holding a
108	108	limited certificate of registration.
109	109	SECTION 4. Section 2051.151(a), Occupations Code, is
110	110	amended to read as follows:
111	111	(a) An athlete agent shall, before contacting an athlete or
112	112	entering into an agency [agent] contract with an athlete in this
113	113	state, deposit with the secretary of state a surety bond, in the
114	114	amount of $50,000, payable to the state and conditioned on:
115	115	(1) the athlete agent complying with this chapter;
116	116	(2) the payment of any administrative penalty assessed
117	117	under Subchapter J; and
118	118	(3) the payment of any damages awarded to an
119	119	institution of higher education or an athlete as a result of the
120	120	athlete agent offering or providing a thing of value to an athlete
121	121	or a family member of the athlete.
122	122	SECTION 5. Section 2051.201, Occupations Code, is amended
123	123	to read as follows:
124	124	Sec. 2051.201. CONTRACT FORM. (a) A registered athlete
125	125	agent must use a form approved by the secretary of state for any
126	126	agency [agent] contract or financial services contract.
127	127	(b) The secretary of state shall by rule require that, to
128	128	the extent practicable, the form for an agency [agent] contract or
129	129	financial services contract conforms to the contract form approved
130	130	by the national professional sports association for the sport in
131	131	which the athlete will be represented.
132	132	SECTION 6. Section 2051.202, Occupations Code, is amended
133	133	to read as follows:
134	134	Sec. 2051.202. CONTRACT SIGNING. An athlete may sign an
135	135	athlete agency [agent] contract at any time as permitted by the
136	136	national association for the promotion and regulation of
137	137	intercollegiate athletics of which the athlete's institution of
138	138	higher education is a member.
139	139	SECTION 7. Section 2051.203(a), Occupations Code, is
140	140	amended to read as follows:
141	141	(a) An agency [agent] contract or a financial services
142	142	contract must include:
143	143	(1) a schedule of fees, including:
144	144	(A) the amount and method of computing the
145	145	consideration to be paid by the athlete for services to be provided
146	146	by the athlete agent under the contract; and
147	147	(B) any other consideration the athlete agent
148	148	received or will receive from any other source for entering into the
149	149	contract or for providing the services;
150	150	(2) a description of the professional services that
151	151	the athlete agent will perform for the athlete;
152	152	(3) the name of any person not listed in the
153	153	application for registration or renewal of registration who will be
154	154	compensated because the athlete signed the agency [agent] contract;
155	155	(4) a description of any expenses of the athlete agent
156	156	the athlete agrees to reimburse;
157	157	(5) the duration of the contract; and
158	158	(6) the date the contract was signed.
159	159	SECTION 8. Section 2051.204(a), Occupations Code, is
160	160	amended to read as follows:
161	161	(a) An agency [agent] contract or a financial services
162	162	contract must include the following notice:
163	163	(1) THIS ATHLETE AGENT IS REGISTERED WITH THE
164	164	SECRETARY OF STATE OF THE STATE OF TEXAS. REGISTRATION WITH THE
165	165	SECRETARY OF STATE DOES NOT IMPLY APPROVAL OR ENDORSEMENT BY THE
166	166	SECRETARY OF STATE OF THE COMPETENCE OF THE ATHLETE AGENT OR OF THE
167	167	SPECIFIC TERMS AND CONDITIONS OF THIS CONTRACT.
168	168	NOTICE TO CLIENT
169	169	(2) DO NOT SIGN THIS CONTRACT UNTIL YOU HAVE READ IT OR
170	170	IF IT CONTAINS BLANK SPACES.
171	171	(3) IF YOU DECIDE THAT YOU DO NOT WISH TO PURCHASE THE
172	172	SERVICES OF THE ATHLETE AGENT, YOU MAY CANCEL THIS CONTRACT BY
173	173	NOTIFYING THE ATHLETE AGENT IN WRITING OF YOUR DESIRE TO CANCEL THE
174	174	CONTRACT NOT LATER THAN THE 16TH DAY AFTER THE DATE ON WHICH YOU
175	175	SIGN THIS CONTRACT. YOU MAY NOT WAIVE THE RIGHT TO CANCEL THIS
176	176	CONTRACT. IF YOU CANCEL THIS CONTRACT WITHIN 16 DAYS, YOU ARE NOT
177	177	REQUIRED TO PAY ANY CONSIDERATION UNDER THE CONTRACT OR RETURN ANY
178	178	CONSIDERATION RECEIVED.
179	179	(4) YOU MAY LOSE YOUR ELIGIBILITY TO COMPETE AS AN
180	180	ATHLETE IN YOUR SPORT. CANCELLATION OF THIS CONTRACT MAY NOT
181	181	REINSTATE YOUR ELIGIBILITY.
182	182	(5) IF YOU HAVE AN ATHLETIC DIRECTOR, WITHIN 72 HOURS
183	183	AFTER ENTERING INTO THIS CONTRACT BOTH YOU AND YOUR ATHLETE AGENT
184	184	MUST NOTIFY YOUR ATHLETIC DIRECTOR.
185	185	SECTION 9. Section 2051.205, Occupations Code, is amended
186	186	to read as follows:
187	187	Sec. 2051.205. FILING REQUIREMENTS. (a) A registered
188	188	athlete agent shall, not later than the 10th day after the date an
189	189	athlete signs an agency [agent] contract or financial services
190	190	contract, file a copy of the contract with:
191	191	(1) the secretary of state; and
192	192	(2) if the athlete is a student at an institution of
193	193	higher education, the athletic director of the athlete's
194	194	institution.
195	195	(b) If the schedule of fees in an agency contract [agent] or
196	196	financial services contract is changed, the athlete agent shall
197	197	file with the secretary a copy of the changed contract.
198	198	SECTION 10. Section 2051.351(a), Occupations Code, is
199	199	amended to read as follows:
200	200	(a) An athlete agent may not:
201	201	(1) publish or cause to be published:
202	202	(A) false, fraudulent, or misleading
203	203	information; or
204	204	(B) a false, fraudulent, or misleading:
205	205	(i) representation;
206	206	(ii) notice; or
207	207	(iii) advertisement;
208	208	(2) provide false information;
209	209	(3) make a false promise or representation relating to
210	210	employment;
211	211	(4) divide fees with or receive compensation from:
212	212	(A) a person exempt from registration under this
213	213	chapter under Section 2051.005;
214	214	(B) a professional sports league or franchise,
215	215	including a representative or employee of the league or franchise;
216	216	or
217	217	(C) an institution of higher education,
218	218	including a representative or employee of the institution's
219	219	athletics department;
220	220	(5) enter into a written or oral agreement with an
221	221	employee of an institution of higher education in which the athlete
222	222	agent offers a thing of value to the employee for the referral of
223	223	clients by the employee;
224	224	(6) before an athlete completes the athlete's last
225	225	intercollegiate sports contest, offer a thing of value to the
226	226	athlete or an individual related to the athlete within the second
227	227	degree by affinity or consanguinity to induce the athlete to enter
228	228	into an agreement with the athlete agent in which the athlete agent
229	229	will represent the athlete;
230	230	(7) before an athlete completes the athlete's last
231	231	intercollegiate sports contest, furnish a thing of value to the
232	232	athlete or an individual related to the athlete within the second
233	233	degree by affinity or consanguinity;
234	234	(8) except as provided by this chapter, before an
235	235	athlete completes the athlete's last intercollegiate sports
236	236	contest:
237	237	(A) directly contact the athlete; or
238	238	(B) enter into an oral or written agreement with
239	239	the athlete for the athlete agent to represent the athlete;
240	240	(9) furnish anything of value to any person other than
241	241	the athlete or another registered athlete agent to induce an
242	242	athlete to enter into an agreement with the athlete agent;
243	243	(10) initiate any contact with an athlete, except as
244	244	authorized by this chapter;
245	245	(11) fail to retain or permit inspection of the
246	246	records required to be retained by Section 2051.352;
247	247	(12) predate or postdate an agency [agent] contract;
248	248	(13) fail to notify an athlete before the athlete
249	249	signs an agency [agent] contract that the signing may make the
250	250	athlete ineligible to participate in intercollegiate sports; or
251	251	(14) commit an act or cause a person to commit an act
252	252	on the athlete agent's behalf that causes an athlete to violate a
253	253	rule of the national association for the promotion and regulation
254	254	of intercollegiate athletics of which the athlete's institution of
255	255	higher education is a member.
256	256	SECTION 11. Section 2051.352(a), Occupations Code, is
257	257	amended to read as follows:
258	258	(a) An athlete agent shall maintain a record of:
259	259	(1) each athlete represented by the athlete agent,
260	260	including:
261	261	(A) the name and address of the athlete;
262	262	(B) fees paid by the athlete; and
263	263	(C) services performed by the athlete agent for
264	264	the athlete;
265	265	(2) travel and entertainment expenses incurred by the
266	266	athlete agent, including expenses for:
267	267	(A) food and beverages;
268	268	(B) hospitality rooms;
269	269	(C) sporting events;
270	270	(D) theater and music events; and
271	271	(E) transportation, lodging, and admission
272	272	relating to entertainment;
273	273	(3) any agency [agent] contract entered into by the
274	274	athlete agent; and
275	275	(4) any direct costs incurred by the athlete agent in
276	276	recruiting or soliciting an athlete to enter into an agency [agent]
277	277	contract.
278	278	SECTION 12. The changes in law made by this Act apply only
279	279	to services provided or to a contract or agreement entered or made
280	280	on or after the effective date of this Act.
281	281	SECTION 13. This Act takes effect September 1, 2019.