By Oakley                                             H.B. No. 2791
                                 A BILL TO BE ENTITLED
    1-1                                AN ACT
    1-2  Relating to the regulation of certain talent agencies.
    1-3        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-4        SECTION 1.  Article 5221a-9, Sections 1 through 7, 12 and 16,
    1-5  Revised Civil Statutes, are amended as follows:
    1-6        Sec. 1.  DEFINITIONS
    1-7  (1)  "Artist" means
    1-8              (A)  an actor who performs or seeks to perform in a
    1-9  motion picture, video tape, stage, theatrical, radio or television
   1-10  broadcast, or other form of production, whether live, filmed or
   1-11  pre-recorded in any way;
   1-12              (B)  a model who renders service by posing for
   1-13  photography for commercial purposes, by wearing apparel or
   1-14  accessories to commercially display such apparel or accessories, by
   1-15  demonstrating products for advertising purposes, or by working as a
   1-16  host for conventions or other special events;
   1-17              (C)  or any individual, whether working as an extra,
   1-18  general factotum, or performing in the individual's area of
   1-19  expertise, who renders analogous professional services under the
   1-20  definitions of "actor" or "model" as outlined in this section.
   1-21              <(A)  an actor who performs in a motion picture,
   1-22  theatrical, radio, television, or other entertainment production,>
   1-23              <(B)  a musician or musical director,>
    2-1              <(C)  a director of a motion picture, theatrical, radio,
    2-2  television, or other entertainment production,>
    2-3              <(D)  a writer,>
    2-4              <(E)  a cinematographer,>
    2-5              <(F)  a composer, lyricist, or arranger of musical
    2-6  composition,>
    2-7              <(G)  a model, or>
    2-8              <(H)  any other individual who renders analogous
    2-9  professional services in a motion picture, theatrical, radio,
   2-10  television, or other entertainment production.>
   2-11  (2)  "Commissioner" means the commissioner of the Texas Department
   2-12  of Licensing and Regulation.
   2-13  (3)  "Department" means the Texas Department of Licensing and
   2-14  Regulation.
   2-15  <(6)  "Model" means an individual who renders professional services
   2-16  as a fashion model, as a model for commercial photography or
   2-17  demonstration of products for advertising purposes, or as a host
   2-18  for a convention or other special events.>
   2-19  (4)<(7)>  "Person" means an individual, personal manager,
   2-20  corporation, organization, business trust, estate, trust,
   2-21  partnership, association, or any other private legal entity.
   2-22  (5)<(8)>  "Talent Agency" means a person that engages in the business
   2-23  of obtaining or attempting to obtain employment for, negotiates
   2-24  financially or contractually for, or acts as a fiduciary for
   2-25  artists, or otherwise represents an artist in the pursuit of
    3-1  employment.  The term includes <an> any entity that directly or
    3-2  indirectly counsels or directs an artist in the development of the
    3-3  artist's professional career.  The term does not include any entity
    3-4  that is in business only to provide instruction.
    3-5  (6)  "Talent" means an actor, model, or anyone who comes under the
    3-6  definition of "Artist".
    3-7        Sec. 2.  REGISTRATION REQUIREMENT; PROHIBITED ACTS
    3-8              (a)  A person may not operate as a talent agency in
    3-9  this state without a certificate of registration issued by the
   3-10  department under this Act for each location at which the person
   3-11  operates a talent agency.  A person operating as a business under
   3-12  the US Internal Revenue Code 501c3 is exempt from this registration
   3-13  requirement.
   3-14              (b)  In this section, "fee" includes:
   3-15                    (1)  "commission fee", which includes any money
   3-16  or other valuable consideration paid or promised to be paid by an
   3-17  artist to a talent agency, an amount which is calculated as a
   3-18  percentage of the salary earned by the artist for services rendered
   3-19  and which is included in the contract between the artist and the
   3-20  talent agency;
   3-21                    (2)  "service fee", which includes any money or
   3-22  other valuable consideration paid or promised to be paid by the
   3-23  employer of an artist directly to a talent agency to cover the
   3-24  talent agency's cost of doing business, an amount which is
   3-25  negotiated separately from the artist's salary and is not included
    4-1  in the calculation of the commission fee paid by the artist to the
    4-2  talent agency;
    4-3                    (3)  "expense fee", which is money paid to an
    4-4  artist by an employer as a reimbursement of out-of-pocket expenses
    4-5  by the artist, including but not limited to transportation,
    4-6  lodging, wardrobe or food expenses, and shall not be included in
    4-7  the artist's salary in the calculation of the commission fee paid
    4-8  by the artist to the talent agency;
    4-9                    (4)  "residual fee", which includes any
   4-10  additional moneys paid to an artist by an employer for services
   4-11  rendered in addition to a base salary figure; such fees include but
   4-12  are not limited to foreign sales fees, holding fees, usage fees,
   4-13  marketing fees, usage reinstatement fees, extra market fees, of
   4-14  syndication fees, or
   4-15                    (5)  any other money of valuable consideration
   4-16  charged by the talent agency to either an employer of artists or to
   4-17  the artist.
   4-18              <(b)>(c)  A talent agency may not charge<, as a condition
   4-19  of registering any applicant or representing any artist, a
   4-20  registration or advance fee and may not require the applicant or
   4-21  artist to subscribe to, use, or use the services of any specific
   4-22  publication, video of audio tapes, post card service, advertisement
   4-23  service, resume service, photographer, or acting or modeling school
   4-24  or workshop.> any artist they represent, or any individual seeking
   4-25  to be represented as a talent, any fee whatsoever except commission
    5-1  fees due on work performed by the artist under conditions of the
    5-2  contract between the artist and the talent agency.  This
    5-3  prohibition of fees includes, but is not limited to, any
    5-4  registration or advance fee, consultation fees, or fees for
    5-5  advising artists and/or prospective artists of the requirements
    5-6  necessary to procure employment or where to go to fulfill such
    5-7  requirements.
    5-8              <(c)>(d)  A talent agency may not split or share fees
    5-9  with a person who is not registered, but require to be registered,
   5-10  under this Act.
   5-11        <(d)  In this section, "fee" includes.>
   5-12              <(1)  any money or other valuable consideration paid or
   5-13  promised to be paid for services rendered by a person operating as
   5-14  a talent agency,>
   5-15              <(2)  any money received by a talent agency in excess of
   5-16  the amount paid by the agency for transportation, transfer of
   5-17  baggage, or bond and lodging for any application for employment as
   5-18  an artist; or>
   5-19              <(3)  the difference between the amount received by a
   5-20  talent agency that furnishes an artist for an entertainment
   5-21  production, exhibition or performance and the amount paid by the
   5-22  talent agency to the artist.>
   5-23        (e)  a talent agency may not charge a commission fee on any
   5-24  artist's money other than the artist's salary or residual fees, and
   5-25  may not charge a commission fee for any expense fees received on
    6-1  behalf of the artist from an employer.
    6-2        (f)  A talent agency, in an effort to cover the cost of doing
    6-3  business, may not charge any service fee to the talent, even if the
    6-4  talent agency is unsuccessful in negotiating such a fee with the
    6-5  employer of the talent.
    6-6        (g)  In an effort to avoid a conflict of interest, a talent
    6-7  agency shall not derive any profits at the expense of the talent it
    6-8  represents, or talent seeking such representation, except for a
    6-9  contracted and agreed upon commission fee.  To avoid such a
   6-10  conflict, a talent agency shall not require or singularly promote
   6-11  to its talent or artist seeking representation any specific
   6-12  marketing or promotional tool, such as a publication, video or
   6-13  audio tape service, post card, headshot or resume, printing
   6-14  services, photographer, or acting or modeling school workshop to
   6-15  the exclusion of any other such legitimate services which are
   6-16  provided within the artist's scope of availability.
   6-17        (h)  A talent agency must operate out of and maintain a
   6-18  permanent, registered office that artist and employers may visit.
   6-19        (i)  A talent agency may not operate any other business
   6-20  deriving its income principally from artists it represents, or
   6-21  persons seeking representation, under the same roof as the talent
   6-22  agency operates, may not by declaration or inference require the
   6-23  use of such business by the artist it represents or any artist
   6-24  seeking such representation, and may not advertise nor promote such
   6-25  activity in the talent agency offices to the exclusion of
    7-1  completion.
    7-2  Sec. 3.  POWERS OF THE DEPARTMENT
    7-3        (a)  The department shall:
    7-4              (1)  prescribe application forms for original and
    7-5  renewal certificates of registration;
    7-6              (2)  set application and registration fees in amounts
    7-7  that are reasonable and necessary to cover the costs of
    7-8  administration of this Act; and
    7-9              (3)  adopt rules as necessary to implement this Act.
   7-10        (b)  The department may take other action as necessary to
   7-11  enforce this Act.
   7-12  Sec. 4.  REGISTRATION STATEMENT
   7-13        (a)  A person must file a registration statement with the
   7-14  department before operating as a talent agency this state.  The
   7-15  registration statement must contain:
   7-16              (1)  the name of the talent agency;
   7-17              (2)  the address of each location at which the
   7-18  applicant for registration proposes to operate a talent agency;
   7-19              (3)  the name and address of any person who directly or
   7-20  indirectly owns or controls ten percent or more of the outstanding
   7-21  shares of stock in the talent agency;
   7-22              (4)  a description of the types of services offered;
   7-23  and
   7-24              (5)  a full and complete disclosure of any litigation
   7-25  relating to the operation of a talent agency brought against the
    8-1  talent agency or any owner, officer or director that was completed
    8-2  within three years before the date on which the statement is filed
    8-3  or is pending as of the date of filing.
    8-4        (b)  The talent agency shall update the statement whenever a
    8-5  material change occurs in the information on file.  The talent
    8-6  agency shall notify the department if a legal action relating to
    8-7  the operation of the talent agency is brought against the talent
    8-8  agency or an owner, officer, or director.  The talent agency shall
    8-9  notify the department in writing not later than the 10th date after
   8-10  the date which the defendant talent agency receives notice of the
   8-11  action.
   8-12        (c)  Each talent agency shall maintain a copy of the
   8-13  registration statement in the records of the talent agency.  The
   8-14  talent agency shall allow an artist who uses the services of the
   8-15  talent agency in inspect the registration statement on request.
   8-16  Sec. 5.  BOND
   8-17        (a)  Each application for registration as a talent agency
   8-18  must be accompanied by a surety bond in the amount of $10,000,
   8-19  payable to the state and conditioned on faithful compliance with
   8-20  this Act.  In lieu of bonding, the state may accept as a surety
   8-21  $10,000 in cash from the applying agency to be placed in escrow by
   8-22  the state.  The registrant shall maintain the bond or cash surety
   8-23  until the <expiration of two years after the> date on which the
   8-24  registrant causes to operate as a talent agency in this state.
   8-25        (b)  This section does not limit the recovery of damages to
    9-1  the amount of the surety bond.
    9-2  Sec. 6.  ADMINISTRATIVE FEE; RULES
    9-3        (a)  The department may charge each talent agency a
    9-4  reasonable fee not to exceed $100 to cover the cost of filing a
    9-5  registration statement or update of a registration statement.
    9-6        (b)  The department may adopt rules necessary to administer
    9-7  the registration program created under this Act.
    9-8  Sec. 7.  ISSUANCE OF CERTIFICATE
    9-9        The department shall issue a certificate of registration to a
   9-10  talent agency that files a complete registration certificate, posts
   9-11  the required bond, and pays the required fee.
   9-12  Sec. 12.  CONTRACT TERMS; CANCELLATION
   9-13        (a)  A talent agency must deliver, upon demand, a full<y> and
   9-14  complete<d> copy of a contract to an artist who desires to purchase<s>
   9-15  services from the talent agency before the contract is signed.  The
   9-16  contract, to be valid, must be in writing, must include the
   9-17  commission fee charged by the talent agency, and must be signed by,
   9-18  and copies provided to both the artist and a legal officer of the
   9-19  talent agency.  The contract constitutes the entire agreement
   9-20  between the talent agency and the artist.
   9-21        (b)  An artist who purchases services from a talent agency
   9-22  may cancel a contract before the fourth business day after the date
   9-23  on which the contract was signed by notifying the talent agency in
   9-24  writing of the cancellation.  Written notification is considered
   9-25  given if the notification is mailed by certified mail to the
   10-1  principal office if the talent agency not later than midnight of
   10-2  the third business day.  The talent agency shall refund any money
   10-3  except commissions received from that artist under the contract to
   10-4  an artist exercising the right to cancel as outlined in this
   10-5  section.
   10-6        (c)  The talent agency is entitled to all commissions earned
   10-7  on behalf of an artist for services rendered by the talent agency
   10-8  and received by the artist prior to the cancellation or expiration
   10-9  of an artist's contract with the talent agency, including but not
  10-10  limited to commission on any subsequent use fees or residual fees
  10-11  which may accrue after such contract termination date.
  10-12  <Sec. 16.  EFFECTIVE DATE, TRANSITION>
  10-13        <(a)  this act takes effect September 1, 1989>
  10-14        <(B)  A talent agency is not required to register under this
  10-15  Act before January 1, 1990.>
  10-16  SECTION 2.  This Act takes effect September 1, 1993.
  10-17  SECTION 4.  The importance of this legislation and the crowded
  10-18  conditions of the calendars in both houses create an emergency and
  10-19  an imperative public necessity that the constitutional rule
  10-20  requiring bills be read on three several days in each house be
  10-21  suspended, and this rule is hereby suspended.