S.B. No. 87
AN ACT
1-1 relating to the regulation of certain athlete agents; providing
1-2 penalties.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Subdivision (5), Subsection (a), Section 1,
1-5 Chapter 13, Acts of the 70th Legislature, 2nd Called Session, 1987
1-6 (Article 8871, Vernon's Texas Civil Statutes), is amended to read
1-7 as follows:
1-8 (5) "Athlete" means an individual who <resides in this
1-9 state and who>:
1-10 (A) is eligible to participate in
1-11 intercollegiate sports contests as a member of a football or
1-12 basketball sports team of an institution of higher education
1-13 located in this state that is a member of a national association
1-14 for the promotion and regulation of intercollegiate athletics; or
1-15 (B) has participated as a member of such a
1-16 sports team at an institution of higher education and who has never
1-17 signed a contract of employment with a professional sports team.
1-18 SECTION 2. Section 1, Chapter 13, Acts of the 70th
1-19 Legislature, 2nd Called Session, 1987 (Article 8871, Vernon's Texas
1-20 Civil Statutes), is amended by adding Subsections (c) and (d) to
1-21 read as follows:
1-22 (c) For purposes of this Act, an athlete's eligibility to
1-23 participate in intercollegiate sports contests ends at the end of
1-24 the last sports contest in the athlete's sport of football or
2-1 basketball that is sanctioned by the athlete's final year of
2-2 eligibility, as determined by the governing body of the national
2-3 association for the promotion and regulation of intercollegiate
2-4 athletics of which the athlete's institution of higher education is
2-5 a member.
2-6 (d) A person who declares himself eligible for recruitment
2-7 by a professional sports team, thereby becoming ineligible to
2-8 participate in intercollegiate sports contests, is not an athlete
2-9 under this Act and may be contacted by an athlete agent without
2-10 compliance by the agent with the requirements of this Act. If the
2-11 person later becomes eligible to participate in intercollegiate
2-12 sports, the person is again considered an athlete under this Act,
2-13 and any contact with the person by an athlete agent is subject to
2-14 the requirements of this Act.
2-15 SECTION 3. Section 2, Chapter 13, Acts of the 70th
2-16 Legislature, 2nd Called Session, 1987 (Article 8871, Vernon's Texas
2-17 Civil Statutes), is amended by amending Subsection (a) and adding
2-18 Subsections (k), (l), and (m) to read as follows:
2-19 (a) An athlete agent must register with the secretary of
2-20 state before the athlete agent may contact an athlete, either
2-21 directly or indirectly, while the athlete is eligible <located in
2-22 this state>. A registered athlete agent may make those contacts
2-23 only in accordance with this Act.
2-24 (k) An applicant for registration that is a corporation, an
2-25 association, a partnership, or another entity, and not an
2-26 individual or a sole proprietorship, shall file with the secretary
2-27 of state, accompanying the application for registration or the
3-1 renewal of any registration, a statement setting forth the names
3-2 and addresses of all individuals who will recruit or solicit an
3-3 athlete to enter into an agent contract, a professional sports
3-4 services contract, or a financial services contract with the agent.
3-5 (l) If a registered athlete agent changes the individuals
3-6 who recruit or solicit athletes on behalf of the agent, the agent
3-7 shall, not later than the 30th day after the date the change is
3-8 made, file with the secretary of state a statement setting forth
3-9 the changes to the statement filed under Subsection (k) of this
3-10 section required to comply with that subsection.
3-11 (m) The secretary of state may prescribe a form for the
3-12 statements required under Subsections (k) and (l) of this section.
3-13 SECTION 4. Chapter 13, Acts of the 70th Legislature, 2nd
3-14 Called Session, 1987 (Article 8871, Vernon's Texas Civil Statutes),
3-15 is amended by adding Section 2A to read as follows:
3-16 Sec. 2A. EXEMPTION. This Act does not apply to a person
3-17 who, for compensation, directly or indirectly recruits or solicits
3-18 an athlete to enter into a contract under which the person provides
3-19 financial services to the athlete if:
3-20 (1) the person is licensed by this state as a dealer,
3-21 an agent, or a salesman of securities, a real estate broker or
3-22 salesman, an insurance agent, or another professional;
3-23 (2) the services are of a type that are customarily
3-24 provided by persons in those licensed professions; and
3-25 (3) the person does not:
3-26 (A) recruit or solicit the athlete to enter into
3-27 an agent contract or a professional services contract on behalf of
4-1 the person, an affiliate, a related entity, or a third party; or
4-2 (B) procure, offer, promise, or attempt to
4-3 obtain employment for an athlete with a professional sports team.
4-4 SECTION 5. Section 3, Chapter 13, Acts of the 70th
4-5 Legislature, 2nd Called Session, 1987 (Article 8871, Vernon's Texas
4-6 Civil Statutes), is amended to read as follows:
4-7 Sec. 3. POWERS AND DUTIES OF SECRETARY OF STATE;
4-8 DISCIPLINARY ACTIONS. (a) The secretary of state shall actively
4-9 enforce this Act and conduct investigations as necessary to ensure
4-10 compliance.
4-11 (b) If the secretary of state determines that a violation
4-12 has occurred, the secretary of state shall refer the case to the
4-13 attorney general for prosecution and take disciplinary action under
4-14 Subsection (e) of this section. On the determination of the
4-15 secretary of state that a violation is occurring or is threatened,
4-16 the secretary of state or attorney general may bring an action in
4-17 district court in Travis County to enjoin the violation or
4-18 threatened violation.
4-19 (c) On receipt of a written request by a registered athlete
4-20 agent, the secretary of state shall provide to the agent the names
4-21 of the compliance coordinators designated under Subsection (e) of
4-22 Section 7 of this Act and on request also shall provide a copy of
4-23 the standards adopted by an institution of higher education under
4-24 Subsection (f) of Section 7 of this Act.
4-25 (d) The secretary of state shall publish, annually or more
4-26 frequently, information that prescribes an institution of higher
4-27 education's compliance responsibilities under this Act and shall
5-1 mail copies of the information to the athletic director or other
5-2 appropriate official at each institution of higher education,
5-3 return receipt requested. The secretary of state shall update the
5-4 material as necessary.
5-5 (e) The secretary of state shall deny a certificate of
5-6 registration to an applicant who has been convicted of a felony or
5-7 of a misdemeanor involving moral turpitude and may deny, suspend,
5-8 or revoke a certificate of registration issued under this Act for a
5-9 violation of this Act or a rule adopted under this Act or <may>
5-10 take other disciplinary actions. Judicial review of a denial,
5-11 suspension, or revocation of a certificate of registration or a <A>
5-12 disciplinary action under this Act is by trial de novo and is
5-13 subject to Subsection (c) of Section 19, <the> Administrative
5-14 Procedure and Texas Register Act (Article 6252-13a, Vernon's Texas
5-15 Civil Statutes).
5-16 SECTION 6. Subsection (b), Section 6, Chapter 13, Acts of
5-17 the 70th Legislature, 2nd Called Session, 1987 (Article 8871,
5-18 Vernon's Texas Civil Statutes), is amended to read as follows:
5-19 (b) An <A registered> athlete agent may not:
5-20 (1) publish or cause to be published any false,
5-21 fraudulent, or misleading information, representation, notice, or
5-22 advertisement or give any false information or make any false
5-23 promises or representations concerning any employment to any
5-24 person;
5-25 (2) divide fees with or receive compensation from a
5-26 person exempt under Section 2A of this Act or a professional sports
5-27 league or franchise or its representative or employee;
6-1 (3) enter into any agreement, written or oral, by
6-2 which the athlete agent offers anything of value to any employee of
6-3 an institution of higher education located in this state in return
6-4 for the referral of any clients by that employee;
6-5 (4) offer anything of value<, excluding reasonable
6-6 entertainment expenses and transportation expenses to and from the
6-7 athlete agent's registered principal place of business,> to induce
6-8 an athlete to enter into an agreement by which the athlete agent
6-9 will represent the athlete; or
6-10 (5) except as otherwise provided by <Section 7 of>
6-11 this Act, directly contact an athlete who is participating in
6-12 football or basketball to <a team sport at an institution of higher
6-13 education located in this state to discuss the athlete agent's
6-14 representation of the athlete in the marketing of the athlete's
6-15 athletic ability or reputation or the provision of financial
6-16 services by the athlete agent, or> enter into any agreement,
6-17 written or oral, by which the athlete agent will represent the
6-18 athlete, until after completion of the athlete's last
6-19 intercollegiate contest<, including postseason games,> and may not
6-20 enter into an agreement before the athlete's last intercollegiate
6-21 contest that purports to take effect at a time after that contest
6-22 is completed.
6-23 SECTION 7. Section 7, Chapter 13, Acts of the 70th
6-24 Legislature, 2nd Called Session, 1987 (Article 8871, Vernon's Texas
6-25 Civil Statutes), is amended to read as follows:
6-26 Sec. 7. PERMITTED CONTACTS WITH CERTAIN ATHLETES; COMPLIANCE
6-27 COORDINATOR; STANDARDS. (a) Each institution <All institutions>
7-1 of higher education located in this state shall sponsor athlete
7-2 agent interviews on its campus at which <their campuses before the
7-3 athlete's final year of eligibility to participate in
7-4 intercollegiate athletics, and> a registered athlete agent may
7-5 interview an <the> athlete to discuss the athlete agent's provision
7-6 of financial services and advice to the athlete or the athlete
7-7 agent's representation of the athlete in the marketing of the
7-8 athlete's athletic ability or reputation. An interview is subject
7-9 to the requirements of this section.
7-10 (b) The secretary of state <All institutions sponsoring
7-11 athlete agent interviews> shall notify each registered athlete
7-12 agent in writing that a copy of the standards adopted by an
7-13 institution of higher education relating to the conduct of an
7-14 athlete agent interview at the institution is available from the
7-15 secretary of state as provided by Subsection (c) of Section 3 of
7-16 this Act. The notice must include a brief statement that the
7-17 standards adopted by an institution of higher education specify the
7-18 policies of that institution relating to <give public notice of
7-19 those interviews not later than the 30th day before the date on
7-20 which the period in which the interviews may be conducted begins.
7-21 Institutions shall provide written notice of> the time, place, and
7-22 duration of <the> athlete agent interviews at the campuses of that
7-23 institution and that each institution has a designated compliance
7-24 coordinator who may be contacted by the agent for further
7-25 information <interview program to those registered athlete agents
7-26 who have previously furnished the athletic director of such
7-27 institutions with their addresses>.
8-1 (c) The athlete agent shall strictly adhere to the specific
8-2 rules of each separate <electing> institution with regard to the
8-3 time, place, and duration of the athlete agent interviews. The
8-4 interviews must be conducted <in the final year of eligibility>
8-5 during a period of at least five but not more than <not to exceed>
8-6 30 consecutive business days and, as designated by the institution,
8-7 must be conducted during the off-season training period for the
8-8 athlete's sport that precedes the athlete's final year of
8-9 eligibility.
8-10 (d) The signing of an athlete agent contract by an athlete
8-11 may occur at any time permitted by the rules or regulations of the
8-12 national association for the promotion and regulation of
8-13 intercollegiate athletics of which the athlete's institution of
8-14 higher education is a member.
8-15 (e) Each institution of higher education in this state shall
8-16 designate an individual to serve as compliance coordinator for the
8-17 institution. The institution shall report the name of its
8-18 compliance coordinator to the secretary of state in the manner
8-19 prescribed by the secretary of state. The compliance coordinator
8-20 shall organize the athlete interview schedule for the coordinator's
8-21 campuses and shall ensure the compliance of the institution and its
8-22 athletes with this Act and the rules adopted under this Act. The
8-23 compliance coordinator or secretary of state shall notify each
8-24 registered athlete agent, in writing, of the interview period not
8-25 later than the 30th day before the date the interview period is
8-26 scheduled to begin. On receipt of a written request, the
8-27 compliance coordinator shall provide a registered athlete agent
9-1 with a copy of the standards adopted by the institution under
9-2 Subsection (f) of this section.
9-3 (f) Each institution of higher education in this state shall
9-4 adopt standards relating to the implementation of this Act at that
9-5 institution. The standards must include specific guidelines
9-6 relating to the athlete agent interview program, including the
9-7 scheduling of interview periods, the duration of an interview
9-8 period, locations on campus where interviews may be conducted, and
9-9 the terms and conditions under which an athlete agent may contact
9-10 an athlete during an interview period. The institution shall
9-11 submit the standards to the institution's athletic council or
9-12 analogous office for approval and shall file the standards with the
9-13 secretary of state not later than the 30th day after the date the
9-14 standards are approved. If the institution amends the standards,
9-15 it shall file the amended standards with the secretary of state not
9-16 later than the 30th day after the effective date of the amendment.
9-17 SECTION 8. Section 8, Chapter 13, Acts of the 70th
9-18 Legislature, 2nd Called Session, 1987 (Article 8871, Vernon's Texas
9-19 Civil Statutes), is amended to read as follows:
9-20 Sec. 8. REMEDIES FOR VIOLATION; CRIMINAL PENALTY. (a) A
9-21 registered or unregistered athlete agent who violates <Subsection
9-22 (a) of Section 2 or Section 6 of> this Act may be subject to:
9-23 (1) a civil penalty, as provided by Section 9 of this
9-24 Act;
9-25 (2) forfeiture of any right of repayment for anything
9-26 of value <either> received by an athlete as an inducement to enter
9-27 into any <agent> contract <or financial services contract or
10-1 received by an athlete before completion of the athlete's last
10-2 intercollegiate contest>;
10-3 (3) a refund of any consideration paid to the athlete
10-4 agent on an athlete's behalf; and
10-5 (4) reasonable attorney's fees and court costs
10-6 incurred by an athlete in suing and recovering against an athlete
10-7 agent for a violation of this Act.
10-8 (b) Any <agent> contract with an athlete <or financial
10-9 services contract> that is negotiated by an unregistered athlete
10-10 agent <who has failed to comply with this Act> is void.
10-11 (c) An athlete agent commits an offense if the agent
10-12 intentionally or knowingly violates <Subsection (a) of Section 2 or
10-13 Section 6 of> this Act or a rule adopted under this Act. An
10-14 offense under this subsection is a Class A misdemeanor.
10-15 SECTION 9. Chapter 13, Acts of the 70th Legislature, 2nd
10-16 Called Session, 1987 (Article 8871, Vernon's Texas Civil Statutes),
10-17 is amended by adding Section 8A to read as follows:
10-18 Sec. 8A. CIVIL ACTION BY INSTITUTION. (a) An institution
10-19 of higher education that is adversely affected by activities of an
10-20 athlete agent who violates this Act may sue the athlete agent for
10-21 damages as provided by this section.
10-22 (b) For purposes of this section, an institution of higher
10-23 education is adversely affected by the activities of an athlete
10-24 agent if, because of the activities of the athlete agent, the
10-25 institution is disqualified or suspended from participation in
10-26 intercollegiate sports contests by a national association for the
10-27 promotion and regulation of intercollegiate athletics and, because
11-1 of that disqualification or suspension, the institution:
11-2 (1) loses revenue from media coverage of sports
11-3 contests;
11-4 (2) loses the right to grant athletic scholarships in
11-5 the sport affected;
11-6 (3) loses the right to recruit athletes; or
11-7 (4) otherwise suffers an adverse financial impact.
11-8 (c) An institution that prevails in a suit brought under
11-9 this section may recover:
11-10 (1) actual damages;
11-11 (2) exemplary damages;
11-12 (3) costs of court; and
11-13 (4) reasonable attorney's fees.
11-14 SECTION 10. Subsection (b), Section 9, Chapter 13, Acts of
11-15 the 70th Legislature, 2nd Called Session, 1987 (Article 8871,
11-16 Vernon's Texas Civil Statutes), is amended to read as follows:
11-17 (b) The secretary of state may assess the civil penalty in
11-18 an amount not to exceed $25,000 <$10,000>. In determining the
11-19 amount of the penalty, the secretary shall consider the seriousness
11-20 of the violation.
11-21 SECTION 11. Subsection (f), Section 5, Chapter 13, Acts of
11-22 the 70th Legislature, 2nd Called Session, 1987 (Article 8871,
11-23 Vernon's Texas Civil Statutes), is repealed.
11-24 SECTION 12. (a) This Act takes effect September 1, 1993.
11-25 (b) The changes made by this Act relating to criminal
11-26 offenses apply only to an offense committed on or after the
11-27 effective date of this Act. For purposes of this section, an
12-1 offense is committed before the effective date of this Act if any
12-2 element of the offense occurs before the effective date.
12-3 (c) An offense committed before the effective date of this
12-4 Act is covered by the law in effect when the offense was committed,
12-5 and the former law is continued in effect for that purpose.
12-6 (d) An institution of higher education shall submit to the
12-7 secretary of state the standards adopted by the institution under
12-8 Subsection (f), Section 7, Chapter 13, Acts of the 70th
12-9 Legislature, 2nd Called Session, 1987 (Article 8871, Vernon's Texas
12-10 Civil Statutes), as added by this Act, not later than January 1,
12-11 1994.
12-12 (e) The secretary of state shall send the information
12-13 required under Subsection (d), Section 3, Chapter 13, Acts of the
12-14 70th Legislature, 2nd Called Session, 1987 (Article 8871, Vernon's
12-15 Texas Civil Statutes), as added by this Act, not later than January
12-16 1, 1994.
12-17 SECTION 13. The importance of this legislation and the
12-18 crowded condition of the calendars in both houses create an
12-19 emergency and an imperative public necessity that the
12-20 constitutional rule requiring bills to be read on three several
12-21 days in each house be suspended, and this rule is hereby suspended.