1-1 By: Armbrister S.B. No. 87
1-2 (In the Senate - Filed January 8, 1993; January 14, 1993,
1-3 read first time and referred to Committee on State Affairs;
1-4 February 22, 1993, reported favorably by the following vote: Yeas
1-5 12, Nays 0; February 22, 1993, sent to printer.)
1-6 COMMITTEE VOTE
1-7 Yea Nay PNV Absent
1-8 Harris of Dallas x
1-9 Rosson x
1-10 Carriker x
1-11 Henderson x
1-12 Leedom x
1-13 Lucio x
1-14 Luna x
1-15 Nelson x
1-16 Patterson x
1-17 Shelley x
1-18 Sibley x
1-19 West x
1-20 Whitmire x
1-21 A BILL TO BE ENTITLED
1-22 AN ACT
1-23 relating to the regulation of certain athlete agents; providing
1-24 penalties.
1-25 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-26 SECTION 1. Subdivision (5), Subsection (a), Section 1,
1-27 Chapter 13, Acts of the 70th Legislature, 2nd Called Session, 1987
1-28 (Article 8871, Vernon's Texas Civil Statutes), is amended to read
1-29 as follows:
1-30 (5) "Athlete" means an individual who <resides in this
1-31 state and who:>
1-32 <(A)> is eligible to participate in
1-33 intercollegiate sports contests as a member of a football or
1-34 basketball sports team of an institution of higher education
1-35 located in this state that is a member of a national association
1-36 for the promotion and regulation of intercollegiate athletics<; or>
1-37 <(B) has participated as a member of such a
1-38 sports team at an institution of higher education and who has never
1-39 signed a contract of employment with a professional sports team>.
1-40 SECTION 2. Section 1, Chapter 13, Acts of the 70th
1-41 Legislature, 2nd Called Session, 1987 (Article 8871, Vernon's Texas
1-42 Civil Statutes), is amended by adding Subsections (c) and (d) to
1-43 read as follows:
1-44 (c) For purposes of this Act, an athlete's eligibility to
1-45 participate in intercollegiate sports contests ends at the end of
1-46 the last sports contest in the athlete's sport of football or
1-47 basketball that is sanctioned by the athlete's final year of
1-48 eligibility, as determined by the governing body of the national
1-49 association for the promotion and regulation of intercollegiate
1-50 athletics of which the athlete's institution of higher education is
1-51 a member.
1-52 (d) A person who declares himself eligible for recruitment
1-53 by a professional sports team, thereby becoming ineligible to
1-54 participate in intercollegiate sports contests, is not an athlete
1-55 under this Act and may be contacted by an athlete agent without
1-56 compliance by the agent with the requirements of this Act. If the
1-57 person later becomes eligible to participate in intercollegiate
1-58 sports, the person is again considered an athlete under this Act,
1-59 and any contact with the person by an athlete agent is subject to
1-60 the requirements of this Act.
1-61 SECTION 3. Section 2, Chapter 13, Acts of the 70th
1-62 Legislature, 2nd Called Session, 1987 (Article 8871, Vernon's Texas
1-63 Civil Statutes), is amended by amending Subsection (a) and adding
1-64 Subsections (k), (l), and (m) to read as follows:
1-65 (a) An athlete agent must register with the secretary of
1-66 state before the athlete agent may contact an athlete, either
1-67 directly or indirectly, while the athlete is eligible <located in
1-68 this state>. A registered athlete agent may make those contacts
2-1 only in accordance with this Act.
2-2 (k) An applicant for registration that is a corporation, an
2-3 association, a partnership, or another entity, and not an
2-4 individual or a sole proprietorship, shall file with the secretary
2-5 of state, accompanying the application for registration or the
2-6 renewal of any registration, a statement setting forth the names
2-7 and addresses of all individuals who will recruit or solicit an
2-8 athlete to enter into an agent contract, a professional sports
2-9 services contract, or a financial services contract with the agent.
2-10 (l) If a registered athlete agent changes the individuals
2-11 who recruit or solicit athletes on behalf of the agent, the agent
2-12 shall, not later than the 30th day after the date the change is
2-13 made, file with the secretary of state a statement setting forth
2-14 the changes to the statement filed under Subsection (k) of this
2-15 section required to comply with that subsection.
2-16 (m) The secretary of state may prescribe a form for the
2-17 statements required under Subsections (k) and (l) of this section.
2-18 SECTION 4. Chapter 13, Acts of the 70th Legislature, 2nd
2-19 Called Session, 1987 (Article 8871, Vernon's Texas Civil Statutes),
2-20 is amended by adding Section 2A to read as follows:
2-21 Sec. 2A. EXEMPTION. This Act does not apply to a person
2-22 who, for compensation, directly or indirectly recruits or solicits
2-23 an athlete to enter into a contract under which the person provides
2-24 financial services to the athlete if:
2-25 (1) the person is licensed by this state as a dealer,
2-26 an agent, or a salesman of securities, a real estate broker or
2-27 salesman, an insurance agent, or another professional;
2-28 (2) the services are of a type that are customarily
2-29 provided by persons in those licensed professions; and
2-30 (3) the person does not:
2-31 (A) recruit or solicit the athlete to enter into
2-32 an agent contract or a professional services contract on behalf of
2-33 the person, an affiliate, a related entity, or a third party; or
2-34 (B) procure, offer, promise, or attempt to
2-35 obtain employment for an athlete with a professional sports team.
2-36 SECTION 5. Section 3, Chapter 13, Acts of the 70th
2-37 Legislature, 2nd Called Session, 1987 (Article 8871, Vernon's Texas
2-38 Civil Statutes), is amended to read as follows:
2-39 Sec. 3. POWERS AND DUTIES OF SECRETARY OF STATE;
2-40 DISCIPLINARY ACTIONS. (a) The secretary of state shall actively
2-41 enforce this Act and conduct investigations as necessary to ensure
2-42 compliance.
2-43 (b) If the secretary of state determines that a violation
2-44 has occurred, the secretary of state shall refer the case to the
2-45 attorney general for prosecution and take disciplinary action under
2-46 Subsection (e) of this section. On the determination of the
2-47 secretary of state that a violation is occurring or is threatened,
2-48 the secretary of state or attorney general may bring an action in
2-49 district court in Travis County to enjoin the violation or
2-50 threatened violation.
2-51 (c) On receipt of a written request by a registered athlete
2-52 agent, the secretary of state shall provide to the agent the names
2-53 of the compliance coordinators designated under Subsection (e) of
2-54 Section 7 of this Act and on request also shall provide a copy of
2-55 the standards adopted by an institution of higher education under
2-56 Subsection (f) of Section 7 of this Act.
2-57 (d) The secretary of state shall publish, annually or more
2-58 frequently, information that prescribes an institution of higher
2-59 education's compliance responsibilities under this Act and shall
2-60 mail copies of the information to the athletic director or other
2-61 appropriate official at each institution of higher education,
2-62 return receipt requested. The secretary of state shall update the
2-63 material as necessary.
2-64 (e) The secretary of state shall deny a certificate of
2-65 registration to an applicant who has been convicted of a felony or
2-66 of a misdemeanor involving moral turpitude and may deny, suspend,
2-67 or revoke a certificate of registration issued under this Act for a
2-68 violation of this Act or a rule adopted under this Act or <may>
2-69 take other disciplinary actions. Judicial review of a denial,
2-70 suspension, or revocation of a certificate of registration or a <A>
3-1 disciplinary action under this Act is by trial de novo and is
3-2 subject to Subsection (c) of Section 19, <the> Administrative
3-3 Procedure and Texas Register Act (Article 6252-13a, Vernon's Texas
3-4 Civil Statutes).
3-5 SECTION 6. Subsection (b), Section 6, Chapter 13, Acts of
3-6 the 70th Legislature, 2nd Called Session, 1987 (Article 8871,
3-7 Vernon's Texas Civil Statutes), is amended to read as follows:
3-8 (b) An <A registered> athlete agent may not:
3-9 (1) publish or cause to be published any false,
3-10 fraudulent, or misleading information, representation, notice, or
3-11 advertisement or give any false information or make any false
3-12 promises or representations concerning any employment to any
3-13 person;
3-14 (2) divide fees with or receive compensation from a
3-15 person exempt under Section 2A of this Act or a professional sports
3-16 league or franchise or its representative or employee;
3-17 (3) enter into any agreement, written or oral, by
3-18 which the athlete agent offers anything of value to any employee of
3-19 an institution of higher education located in this state in return
3-20 for the referral of any clients by that employee;
3-21 (4) offer anything of value<, excluding reasonable
3-22 entertainment expenses and transportation expenses to and from the
3-23 athlete agent's registered principal place of business,> to induce
3-24 an athlete to enter into an agreement by which the athlete agent
3-25 will represent the athlete; or
3-26 (5) except as otherwise provided by <Section 7 of>
3-27 this Act, directly contact an athlete who is participating in
3-28 football or basketball to <a team sport at an institution of higher
3-29 education located in this state to discuss the athlete agent's
3-30 representation of the athlete in the marketing of the athlete's
3-31 athletic ability or reputation or the provision of financial
3-32 services by the athlete agent, or> enter into any agreement,
3-33 written or oral, by which the athlete agent will represent the
3-34 athlete, until after completion of the athlete's last
3-35 intercollegiate contest<, including postseason games,> and may not
3-36 enter into an agreement before the athlete's last intercollegiate
3-37 contest that purports to take effect at a time after that contest
3-38 is completed.
3-39 SECTION 7. Section 7, Chapter 13, Acts of the 70th
3-40 Legislature, 2nd Called Session, 1987 (Article 8871, Vernon's Texas
3-41 Civil Statutes), is amended to read as follows:
3-42 Sec. 7. PERMITTED CONTACTS WITH CERTAIN ATHLETES; COMPLIANCE
3-43 COORDINATOR; STANDARDS. (a) Each institution <All institutions>
3-44 of higher education located in this state shall sponsor athlete
3-45 agent interviews on its campus at which <their campuses before the
3-46 athlete's final year of eligibility to participate in
3-47 intercollegiate athletics, and> a registered athlete agent may
3-48 interview an <the> athlete to discuss the athlete agent's provision
3-49 of financial services and advice to the athlete or the athlete
3-50 agent's representation of the athlete in the marketing of the
3-51 athlete's athletic ability or reputation. An interview is subject
3-52 to the requirements of this section.
3-53 (b) The secretary of state <All institutions sponsoring
3-54 athlete agent interviews> shall notify each registered athlete
3-55 agent in writing that a copy of the standards adopted by an
3-56 institution of higher education relating to the conduct of an
3-57 athlete agent interview at the institution is available from the
3-58 secretary of state as provided by Subsection (c) of Section 3 of
3-59 this Act. The notice must include a brief statement that the
3-60 standards adopted by an institution of higher education specify the
3-61 policies of that institution relating to <give public notice of
3-62 those interviews not later than the 30th day before the date on
3-63 which the period in which the interviews may be conducted begins.
3-64 Institutions shall provide written notice of> the time, place, and
3-65 duration of <the> athlete agent interviews at the campuses of that
3-66 institution and that each institution has a designated compliance
3-67 coordinator who may be contacted by the agent for further
3-68 information <interview program to those registered athlete agents
3-69 who have previously furnished the athletic director of such
3-70 institutions with their addresses>.
4-1 (c) The athlete agent shall strictly adhere to the specific
4-2 rules of each separate <electing> institution with regard to the
4-3 time, place, and duration of the athlete agent interviews. The
4-4 interviews must be conducted <in the final year of eligibility>
4-5 during a period of at least five but not more than <not to exceed>
4-6 30 consecutive business days and, as designated by the institution,
4-7 must be conducted during the off-season training period for the
4-8 athlete's sport that precedes the athlete's final year of
4-9 eligibility.
4-10 (d) The signing of an athlete agent contract by an athlete
4-11 may occur at any time permitted by the rules or regulations of the
4-12 national association for the promotion and regulation of
4-13 intercollegiate athletics of which the athlete's institution of
4-14 higher education is a member.
4-15 (e) Each institution of higher education in this state shall
4-16 designate an individual to serve as compliance coordinator for the
4-17 institution. The institution shall report the name of its
4-18 compliance coordinator to the secretary of state in the manner
4-19 prescribed by the secretary of state. The compliance coordinator
4-20 shall organize the athlete interview schedule for the coordinator's
4-21 campuses and shall ensure the compliance of the institution and its
4-22 athletes with this Act and the rules adopted under this Act. The
4-23 compliance coordinator or secretary of state shall notify each
4-24 registered athlete agent, in writing, of the interview period not
4-25 later than the 30th day before the date the interview period is
4-26 scheduled to begin. On receipt of a written request, the
4-27 compliance coordinator shall provide a registered athlete agent
4-28 with a copy of the standards adopted by the institution under
4-29 Subsection (f) of this section.
4-30 (f) Each institution of higher education in this state shall
4-31 adopt standards relating to the implementation of this Act at that
4-32 institution. The standards must include specific guidelines
4-33 relating to the athlete agent interview program, including the
4-34 scheduling of interview periods, the duration of an interview
4-35 period, locations on campus where interviews may be conducted, and
4-36 the terms and conditions under which an athlete agent may contact
4-37 an athlete during an interview period. The institution shall
4-38 submit the standards to the institution's athletic council or
4-39 analogous office for approval and shall file the standards with the
4-40 secretary of state not later than the 30th day after the date the
4-41 standards are approved. If the institution amends the standards,
4-42 it shall file the amended standards with the secretary of state not
4-43 later than the 30th day after the effective date of the amendment.
4-44 SECTION 8. Section 8, Chapter 13, Acts of the 70th
4-45 Legislature, 2nd Called Session, 1987 (Article 8871, Vernon's Texas
4-46 Civil Statutes), is amended to read as follows:
4-47 Sec. 8. REMEDIES FOR VIOLATION; CRIMINAL PENALTY. (a) A
4-48 registered or unregistered athlete agent who violates <Subsection
4-49 (a) of Section 2 or Section 6 of> this Act may be subject to:
4-50 (1) a civil penalty, as provided by Section 9 of this
4-51 Act;
4-52 (2) forfeiture of any right of repayment for anything
4-53 of value <either> received by an athlete as an inducement to enter
4-54 into any <agent> contract <or financial services contract or
4-55 received by an athlete before completion of the athlete's last
4-56 intercollegiate contest>;
4-57 (3) a refund of any consideration paid to the athlete
4-58 agent on an athlete's behalf; and
4-59 (4) reasonable attorney's fees and court costs
4-60 incurred by an athlete in suing and recovering against an athlete
4-61 agent for a violation of this Act.
4-62 (b) Any <agent> contract with an athlete <or financial
4-63 services contract> that is negotiated by an unregistered athlete
4-64 agent <who has failed to comply with this Act> is void.
4-65 (c) An athlete agent commits an offense if the agent
4-66 intentionally or knowingly violates <Subsection (a) of Section 2 or
4-67 Section 6 of> this Act or a rule adopted under this Act. An
4-68 offense under this subsection is a Class A misdemeanor.
4-69 SECTION 9. Chapter 13, Acts of the 70th Legislature, 2nd
4-70 Called Session, 1987 (Article 8871, Vernon's Texas Civil Statutes),
5-1 is amended by adding Section 8A to read as follows:
5-2 Sec. 8A. CIVIL ACTION BY INSTITUTION. (a) An institution
5-3 of higher education that is adversely affected by activities of an
5-4 athlete agent who violates this Act may sue the athlete agent for
5-5 damages as provided by this section.
5-6 (b) For purposes of this section, an institution of higher
5-7 education is adversely affected by the activities of an athlete
5-8 agent if, because of the activities of the athlete agent, the
5-9 institution is disqualified or suspended from participation in
5-10 intercollegiate sports contests by a national association for the
5-11 promotion and regulation of intercollegiate athletics and, because
5-12 of that disqualification or suspension, the institution:
5-13 (1) loses revenue from media coverage of sports
5-14 contests;
5-15 (2) loses the right to grant athletic scholarships in
5-16 the sport affected;
5-17 (3) loses the right to recruit athletes; or
5-18 (4) otherwise suffers an adverse financial impact.
5-19 (c) An institution that prevails in a suit brought under
5-20 this section may recover:
5-21 (1) actual damages;
5-22 (2) exemplary damages;
5-23 (3) costs of court; and
5-24 (4) reasonable attorney's fees.
5-25 SECTION 10. Subsection (b), Section 9, Chapter 13, Acts of
5-26 the 70th Legislature, 2nd Called Session, 1987 (Article 8871,
5-27 Vernon's Texas Civil Statutes), is amended to read as follows:
5-28 (b) The secretary of state may assess the civil penalty in
5-29 an amount not to exceed $25,000 <$10,000>. In determining the
5-30 amount of the penalty, the secretary shall consider the seriousness
5-31 of the violation.
5-32 SECTION 11. Subsection (f), Section 5, Chapter 13, Acts of
5-33 the 70th Legislature, 2nd Called Session, 1987 (Article 8871,
5-34 Vernon's Texas Civil Statutes), is repealed.
5-35 SECTION 12. (a) This Act takes effect September 1, 1993.
5-36 (b) The changes made by this Act relating to criminal
5-37 offenses apply only to an offense committed on or after the
5-38 effective date of this Act. For purposes of this section, an
5-39 offense is committed before the effective date of this Act if any
5-40 element of the offense occurs before the effective date.
5-41 (c) An offense committed before the effective date of this
5-42 Act is covered by the law in effect when the offense was committed,
5-43 and the former law is continued in effect for that purpose.
5-44 (d) An institution of higher education shall submit to the
5-45 secretary of state the standards adopted by the institution under
5-46 Subsection (f), Section 7, Chapter 13, Acts of the 70th
5-47 Legislature, 2nd Called Session, 1987 (Article 8871, Vernon's Texas
5-48 Civil Statutes), as added by this Act, not later than January 1,
5-49 1994.
5-50 (e) The secretary of state shall send the information
5-51 required under Subsection (d), Section 3, Chapter 13, Acts of the
5-52 70th Legislature, 2nd Called Session, 1987 (Article 8871, Vernon's
5-53 Texas Civil Statutes), as added by this Act, not later than January
5-54 1, 1994.
5-55 SECTION 13. The importance of this legislation and the
5-56 crowded condition of the calendars in both houses create an
5-57 emergency and an imperative public necessity that the
5-58 constitutional rule requiring bills to be read on three several
5-59 days in each house be suspended, and this rule is hereby suspended.
5-60 * * * * *
5-61 Austin,
5-62 Texas
5-63 February 22,
5-64 1993
5-65 Hon. Bob Bullock
5-66 President of the Senate
5-67 Sir:
5-68 We, your Committee on State Affairs to which was referred S.B.
5-69 No. 87, have had the same under consideration, and I am instructed
5-70 to report it back to the Senate with the recommendation that it do
6-1 pass and be printed.
6-2 Harris of
6-3 Dallas, Chairman
6-4 * * * * *
6-5 WITNESSES
6-6 FOR AGAINST ON
6-7 ___________________________________________________________________
6-8 Name: Guy Joyner x
6-9 Representing: Secretary of State
6-10 City: Austin
6-11 -------------------------------------------------------------------
6-12 Name: Leroy Sutherland x
6-13 Representing: University of Texas at Austin
6-14 City: Austin
6-15 -------------------------------------------------------------------