Athlete Agents
Related Information
Athlete agents are governed by Chapter 2051 of the Texas Occupations Code and the secretary of state’s administrative rules found in title 1, Chapter 78 of the Texas Administrative Code. Before an agent may recruit or solicit an athlete to enter into an agent contract, a financial services contract, or a professional sports services contract, an agent must obtain a certificate of registration from the secretary of state.
“Athlete” means an individual who:
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is eligible to participate in intercollegiate sports contests as a member of a sports team or as an individual competitor in a sport at an institution of higher education; or
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has participated as a member of an intercollegiate sports team or as an individual competitor in an intercollegiate sport’s at an institution of higher education and has never signed an employment contract with a professional sports team.
Tex. Occ. Code Ann. § 2051.001(2).
“Institution of higher education” means an institution of higher education or a private or independent institution of higher education, as defined by Section 61.003, Education Code, that is a member of a national association for the promotion and regulation of intercollegiate athletics. Tex. Occ. Code Ann. § 2051.001(5).
Each institution of higher education is required to designate a compliance coordinator and report the name of the compliance coordinator to the secretary of state. Tex. Occ. Code Ann. § 2051.253. A list of athletics compliance coordinators (PDF) for Texas institutions of higher education may be found here.
Types of Agent Registration
As of September 1, 2011, Texas has two types of athlete agents: professional and limited. Both of these are registrations held by individuals, not organizations.
Professional athlete agents must be certified by at least one national professional sports association, such as the National Football League Players Association, National Basketball Players Association, Major League Baseball Players Association, National Hockey League Players' Association, or United States Soccer Federation.
Limited athlete agents are not required to be certified by a national professional sports association, but may only represent an athlete in a sport that does not have a national professional sports association that certifies or licenses agents, such as golf or tennis.
Agent Responsibilities
First and foremost, an athlete agent is responsible for knowing the applicable law and being truthful and complete in all dealings as an athlete agent. Other responsibilities of Texas athlete agents include:
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Timely file with the secretary of state:
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Copies of athlete agent contracts
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Bonds to act as an agent, and, if applicable, to enter into financial services contracts
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Annual registration renewals
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Notification of any criminal convictions for offenses other than Class C misdemeanors
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Notification of decertification by a national professional sports association
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Retain and permit inspection of records
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Disclose required information:
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To athletes related to college eligibility
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To athletes in athlete agent contracts
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To the secretary of state related to registration, renewal, and individual solicitors
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To the public in advertising
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To athletic directors regarding parent- or guardian-initiated contact
Violations
Violating Chapter 2051 or the administrative rules can result in serious penalties, including thousands of dollars in monetary fines, as well as subject an athlete agent to civil suit or conviction of a criminal offense. Violations include:
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Failing to fulfill the responsibilities of a Texas athlete agent (discussed in the above section)
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Initiating unauthorized contact with an athlete
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Contact or contract with athlete before completion of last college game
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Offering or furnishing something of value in return for a contract
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Certain types of referral and fee sharing agreements
Frequently Asked Questions for Form Series 2500 - Athlete Agents
1. Does the Texas Athlete Agents Act apply to all Texas athletes?
The Act defines an athlete as an individual who: (1) is eligible to participate in intercollegiate sports contests as a member of a sports team or as an individual competitor in a sport at an institution of higher education; or (2) has participated as a member of an intercollegiate sports team or as an individual competitor in an intercollegiate sport at an institution of higher education and has never signed an employment contract with a professional sports team.
2. Do I have to be registered as an athlete agent to contact a Texas athlete?
An athlete agent must register with the Secretary of State before the athlete agent may contact an athlete, either directly or indirectly, while the athlete is eligible. Also, an athlete agent must be registered to enter into an agent contract with an athlete, as that term is defined in Chapter 2051, Occupations Code. This includes the time-period after the athlete is no longer eligible to compete in intercollegiate athletics. Only an individual may register as a Texas athlete agent.
3. How much does it cost to register as an athlete agent? Must I obtain a bond?
Effective September 1, 2011, the annual filing fee for registration as an athlete agent is $500.
An agent must also provide to the Secretary of State a $50,000 surety bond, and, if the agent provides financial services or enters into a financial services contract with an athlete, the agent must provide a separate $100,000 surety bond. Both bonds must be payable to the state.
4. Is there a test required in order to register as an athlete agent?
No. An applicant must complete an application for registration as an athlete agent and provide the required filing fee. The application will be reviewed, and if approved, a certificate of registration will be forwarded to the applicant.
5. Are there guidelines that must be followed by an agent?
The Athlete Agents Act specifies certain prohibited acts and delineates agent contract requirements.
6. Are there any penalties associated with a failure to comply with the Athlete Agents Act?
The Secretary of State has the authority to revoke or suspend an athlete agent's registration. In addition, the Secretary of State can assess an administrative penalty in an amount up to $50,000.00 for a violation of the Act or an administrative rule adopted pursuant to the Act. An athlete agent who intentionally or knowingly commits a violation of the Athlete Agents Act is also subject to criminal penalties.
H.B. No. 1123 |
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AN ACT |
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relating to the regulation of athlete agents; providing |
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administrative and criminal penalties. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 2051.001, Occupations Code, is amended |
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by amending Subdivision (3) and adding Subdivision (5-a) to read as |
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follows: |
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(3) "Athlete agent" means an individual [ |
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who: |
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(A) for compensation, directly or indirectly |
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recruits or solicits an athlete to enter into an agent contract, a |
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financial services contract, or a professional sports services |
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contract with that individual [ |
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(B) for a fee, procures, offers, promises, or |
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attempts to obtain employment for an athlete with a professional |
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sports team. |
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(5-a) "National professional sports association" |
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means an organization that licenses or certifies athlete agents to |
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represent athletes in a particular professional sport. The term |
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includes the National Football League Players Association, |
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National Basketball Players Association, Major League Baseball |
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Players Association, National Hockey League Players' Association, |
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and United States Soccer Federation. |
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SECTION 2. Sections 2051.052(a) and (b), Occupations Code, |
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are amended to read as follows: |
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(a) The secretary of state shall [ |
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publish on the secretary of state's Internet website information |
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that prescribes the compliance responsibilities of an institution |
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of higher education under this chapter. |
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(b) The secretary shall notify [ |
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official of each institution of higher education of any change to |
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the compliance responsibilities of the institution under this |
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chapter. |
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SECTION 3. Section 2051.101, Occupations Code, is amended |
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by amending Subsections (a) and (b) and adding Subsections (a-1), |
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(a-2), (d), and (e) to read as follows: |
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(a) Except as provided by Subsection (b), an individual [ |
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that the individual [ |
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unless the individual [ |
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under this chapter as: |
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(1) a professional athlete agent; or |
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(2) a limited athlete agent. |
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(a-1) An individual may not register as a professional |
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athlete agent under this chapter unless the individual is certified |
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as an agent by a national professional sports association. |
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(a-2) An individual who is not certified as an agent by a |
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national professional sports association may register only as a |
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limited athlete agent. A limited athlete agent may only represent |
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an athlete in a sport that does not have a national professional |
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sports association. |
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(b) Before the issuance of a certificate of registration |
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under this chapter, an individual [ |
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agent in this state for all purposes except signing an agent |
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contract, if: |
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(1) an athlete or a person acting on behalf of the |
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athlete initiates communication with the individual [ |
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(2) within seven days after the date of the initial act |
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as an athlete agent, the individual [ |
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for registration under this chapter. |
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(d) An agent contract with an athlete in a sport for which |
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there is a national professional sports association is void if the |
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contract is negotiated by an athlete agent holding a limited |
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certificate of registration. |
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(e) A person who is not an individual may not register as an |
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athlete agent in this state. |
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SECTION 4. Sections 2051.102(b) and (e), Occupations Code, |
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are amended to read as follows: |
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(b) An applicant must provide information required by the |
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secretary of state, including: |
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(1) the applicant's: |
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(A) name; |
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(B) principal business address; |
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(C) business or occupation for the five years |
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immediately preceding the date of application; and |
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(D) formal training, practical experience, and |
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educational background relating to the applicant's professional |
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activities as an athlete agent; |
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(2) the name, sport, and last known team for each |
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person the applicant represented as an athlete agent during the |
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five years immediately preceding the date of application; |
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(3) whether the applicant or a person described by |
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Subdivision (5) has been subject to any of the following: |
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(A) a conviction of a crime that in this state is |
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a Class A or Class B misdemeanor, a felony, or a crime of moral |
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turpitude; |
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(B) an administrative or a judicial |
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determination finding the applicant or other person made a false, |
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misleading, deceptive, or fraudulent representation; |
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(C) a sanction or suspension related to |
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occupational or professional conduct; |
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(D) a denial of an application for a certificate |
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of registration or license as an athlete agent; or |
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(E) a denial, revocation, or suspension of a |
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certificate of registration or license as an athlete agent; |
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(4) whether the applicant or a person described by |
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Subdivision (5) has engaged in conduct resulting in the imposition |
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on an athlete or educational institution of a sanction, suspension, |
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or declaration of ineligibility to participate in an |
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interscholastic or intercollegiate athletic event; [ |
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(5) except as provided by Subsection (d), the name and |
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address of each person, except a bona fide employee on salary, who |
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is financially interested as a partner, associate, or profit sharer |
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in the applicant's business; and |
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(6) the name and address of each national professional |
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sports association that has certified the applicant as an agent. |
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(e) An individual [ |
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athlete agent under this chapter who holds a certificate of |
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registration or license as an athlete agent in another state may |
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submit a copy of the previous application and certificate or |
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license instead of submitting the application required by this |
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section. The secretary of state shall accept the application and |
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the certificate or license from the other state as an application |
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for registration in this state if the application to the other |
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state: |
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(1) was submitted to the other state not earlier than |
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the 180th day before the date the application is submitted in this |
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state and the applicant certifies that the information contained in |
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the application is current; |
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(2) contains information substantially similar to or |
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more comprehensive than the information required by this section; |
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and |
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(3) was signed by the applicant under penalty of |
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perjury. |
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SECTION 5. Sections 2051.108(b) and (e), Occupations Code, |
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are amended to read as follows: |
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(b) A renewal application must include: |
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(1) the name, [ |
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each athlete for whom the athlete agent is performing professional |
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services for compensation on the date of the renewal application; |
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(2) the name, [ |
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each athlete for whom the athlete agent has performed professional |
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services for compensation during the three years immediately |
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preceding the date of the renewal application but for whom the |
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athlete agent is not performing professional services on the date |
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of the renewal application; [ |
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(3) the name and address of each national professional |
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sports association by which the athlete agent is currently |
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certified; and |
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(4) any other information prescribed by the secretary |
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of state. |
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(e) An individual [ |
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application for renewal of registration or licensure as an athlete |
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agent in another state may submit a copy of the application and |
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certificate of registration or license from the other state instead |
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of submitting the application required by this section. The |
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secretary of state shall accept the application for renewal from |
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the other state as an application for renewal under this section if |
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the application to the other state: |
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(1) was submitted to the other state not earlier than |
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the 180th day before the date the renewal application is submitted |
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in this state and the applicant certifies that the information |
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contained in the application is current; |
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(2) contains information substantially similar to or |
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more comprehensive than the information required by this section; |
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and |
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(3) was signed by the applicant under penalty of |
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perjury. |
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SECTION 6. Subchapter C, Chapter 2051, Occupations Code, is |
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amended by adding Sections 2051.109 and 2051.110 to read as |
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follows: |
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Sec. 2051.109. CONTINUING NOTIFICATION REQUIREMENT. (a) A |
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registered athlete agent shall notify the secretary of state in |
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writing of the athlete agent's: |
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(1) conviction of a crime that in this state is an |
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offense other than a Class C misdemeanor; or |
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(2) decertification as an agent by a national |
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professional sports association that has become final by the |
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conclusion of the appeal process provided by the association. |
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(b) The athlete agent shall notify the secretary of state as |
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required under this section not later than 30 days after the date of |
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conviction or the date that the decertification becomes final. |
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Sec. 2051.110. EFFECT OF DECERTIFICATION BY PROFESSIONAL |
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ASSOCIATION. The secretary of state shall revoke the certificate |
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of registration of an athlete agent decertified by a national |
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professional sports association. |
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SECTION 7. Section 2051.151, Occupations Code, is amended |
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by amending Subsections (a) and (b) and adding Subsection (a-1) to |
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read as follows: |
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(a) An athlete agent shall, before contacting an athlete or |
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entering into an agent contract with an athlete in this state, |
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deposit with the secretary of state a surety bond, in the amount of |
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$50,000, payable to the state and conditioned on: |
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(1) the athlete agent complying with this chapter; |
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(2) the payment of any administrative penalty assessed |
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under Subchapter J; and |
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(3) the payment of any damages awarded to an |
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institution of higher education or an athlete as a result of the |
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athlete agent offering or providing a thing of value to an athlete |
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or a family member of the athlete. |
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(a-1) An athlete agent shall, before entering into a |
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financial services contract with an athlete, deposit with the |
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secretary of state a surety bond, in the amount of $100,000, payable |
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to the state and conditioned on: |
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(1) the athlete agent complying with this chapter; |
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(2) the payment of money owed to an individual or group |
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of individuals when the athlete agent or the athlete agent's |
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representative or agent receives the money; and |
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(3) the payment of damages to an athlete caused by the |
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intentional misrepresentation, fraud, deceit, or unlawful or |
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negligent act or omission of the athlete agent or of the athlete |
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agent's representative or employee while acting within the scope of |
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the financial services contract. |
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(b) An athlete agent shall maintain a bond deposited under |
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Subsection (a) or (a-1) for not less than two years after the later |
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of: |
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(1) the date that the athlete agent ceases to provide |
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financial services to an athlete; or |
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(2) the date that the athlete agent's certificate of |
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registration expires or is revoked. |
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SECTION 8. Section 2051.201, Occupations Code, is amended |
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to read as follows: |
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Sec. 2051.201. CONTRACT FORM. (a) A registered athlete |
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agent must use a form approved by the secretary of state for any |
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agent contract or financial services contract. |
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(b) The secretary of state shall by rule require that, to |
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the extent practicable, the form for an agent contract or financial |
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services contract conforms to the contract form approved by the |
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national professional sports association for the sport in which the |
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athlete will be represented. |
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SECTION 9. Section 2051.205(a), Occupations Code, is |
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amended to read as follows: |
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(a) A registered athlete agent shall, not later than the |
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10th [ |
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or financial services contract, file a copy of the contract with: |
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(1) the secretary of state; and |
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(2) if the athlete is a student at an institution of |
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higher education, the athletic director of the athlete's |
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institution. |
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SECTION 10. Section 2051.351(a), Occupations Code, is |
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amended to read as follows: |
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(a) An athlete agent may not: |
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(1) publish or cause to be published: |
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(A) false, fraudulent, or misleading |
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information; or |
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(B) a false, fraudulent, or misleading: |
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(i) representation; |
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(ii) notice; or |
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(iii) advertisement; |
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(2) provide false information; |
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(3) make a false promise or representation relating to |
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employment; |
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(4) divide fees with or receive compensation from: |
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(A) a person exempt from registration under this |
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chapter under Section 2051.005; [ |
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(B) a professional sports league or franchise, |
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including a representative or employee of the league or franchise; |
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or |
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(C) an institution of higher education, |
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including a representative or employee of the institution's |
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athletics department; |
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(5) enter into a written or oral agreement with an |
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employee of an institution of higher education in which the athlete |
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agent offers a thing of value to the employee for the referral of |
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clients by the employee; |
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(6) before an athlete completes the athlete's last |
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intercollegiate sports contest, offer a thing of value to the |
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athlete or an individual related to the athlete within the second |
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degree by affinity or consanguinity to induce the athlete to enter |
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into an agreement with the athlete agent in which the athlete agent |
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will represent the athlete; |
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(7) before an athlete completes the athlete's last |
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intercollegiate sports contest, furnish a thing of value to the |
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athlete or an individual related to the athlete within the second |
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degree by affinity or consanguinity; |
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(8) [ |
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an athlete completes the athlete's last intercollegiate sports |
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contest: |
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(A) directly contact the athlete; or |
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(B) enter into an oral or written agreement with |
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the athlete for the athlete agent to represent the athlete; |
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(9) [ |
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other than the athlete or another registered athlete agent to |
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induce an athlete to enter into an agreement with the athlete agent; |
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(10) [ |
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except as authorized by this chapter; |
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(11) [ |
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records required to be retained by Section 2051.352; |
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(12) [ |
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[ |
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(13) [ |
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athlete signs an agent contract that the signing may make the |
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athlete ineligible to participate in intercollegiate sports; or |
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(14) commit an act or cause a person to commit an act |
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on the athlete agent's behalf that causes an athlete to violate a |
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rule of the national association for the promotion and regulation |
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of intercollegiate athletics of which the athlete's institution of |
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higher education is a member. |
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SECTION 11. Section 2051.451(b), Occupations Code, is |
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amended to read as follows: |
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(b) The secretary shall determine the amount of a penalty |
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assessed under Subsection (a), except that the amount may not |
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exceed: |
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(1) $50,000 for a violation of Section 2051.351(a)(7) |
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or (14); or |
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(2) $25,000 for any other violation. |
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SECTION 12. Subchapter J, Chapter 2051, Occupations Code, |
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is amended by adding Section 2051.457 to read as follows: |
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Sec. 2051.457. FAILURE TO PAY ADMINISTRATIVE PENALTY. (a) |
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If an athlete agent fails to pay the administrative penalty and does |
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not request a hearing as provided by Section 2051.453, the |
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secretary of state may revoke the agent's certificate of |
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registration, refuse to renew the agent's certificate of |
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registration, or refuse to issue a certificate of registration to |
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the agent. |
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(b) If, after a hearing, an athlete agent fails to pay the |
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administrative penalty as required by Section 2051.454, the |
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secretary of state may revoke the agent's certificate of |
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registration, refuse to renew the agent's certificate of |
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registration, or refuse to issue a certificate of registration to |
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the agent. |
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SECTION 13. Section 2051.501, Occupations Code, is amended |
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by amending Subsection (b) and adding Subsection (c) to read as |
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follows: |
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(b) Except as provided by Subsection (c), an [ |
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under this section is a Class A misdemeanor. |
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(c) An offense under this section committed by an athlete |
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agent who intentionally or knowingly violates Section |
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2051.351(a)(7) or (14) is a third degree felony. |
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SECTION 14. Subchapter K, Chapter 2051, Occupations Code, |
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is amended by adding Section 2051.502 to read as follows: |
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Sec. 2051.502. NOTICE OF CRIMINAL OFFENSE. The secretary |
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of state shall send notice of an athlete agent's conviction of an |
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offense under Section 2051.501 to each national professional sports |
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association that has certified the agent. |
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SECTION 15. The heading to Subchapter L, Chapter 2051, |
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Occupations Code, is amended to read as follows: |
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SUBCHAPTER L. CIVIL LIABILITY [ |
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SECTION 16. Section 2051.551, Occupations Code, is amended |
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by amending Subsections (a), (b), and (c) and adding Subsection |
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(a-1) to read as follows: |
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(a) An institution of higher education adversely affected |
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by an athlete agent's [ |
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chapter may file suit against the athlete agent [ |
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for damages. |
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(a-1) An athlete adversely affected by an athlete agent's |
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violation of Section 2051.351(a)(7) or (14) may file suit against |
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the athlete agent for damages. |
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(b) A cause of action under Subsection (a) [ |
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does not accrue until the educational institution discovers or by |
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the exercise of reasonable diligence would have discovered the |
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violation by the athlete agent [ |
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(c) Any liability of the athlete agent [ |
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SECTION 17. Section 2051.552, Occupations Code, is amended |
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to read as follows: |
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Sec. 2051.552. ADVERSELY AFFECTED. (a) An institution of |
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higher education is adversely affected by an athlete agent's |
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violation of this chapter if: |
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|
(1) the athlete agent's violation causes a national |
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|
association for the promotion and regulation of intercollegiate |
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|
athletics to disqualify or suspend the institution from |
|
|
participating in intercollegiate sports contests; and |
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|
(2) the disqualification or suspension of the |
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|
institution causes the institution to: |
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|
(A) lose revenue from media coverage of sports |
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|
contests; |
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|
(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. |
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|
(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 [ |
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|
|
|
|
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. |
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|
||
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||
|
______________________________ |
______________________________ |
|
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 |
Form 2501 and related materials. Application for Registration as an Athlete Agent - Forms for registering as an athlete agent in Texas (packet contains forms 2501-2507). (Word, Acrobat)
Form 2503. Athlete Agent Financial Services Surety Bond - Form for submitting a financial services surety bond by an agent who decides to enter a financial services contract or provide financial services for an athlete after registration or renewal. (Word, Acrobat)
Form 2505 and related materials. Renewal Application for Registration as an Athlete Agent - Forms for renewing the registration of an athlete agent in Texas (packet contains forms 2505, 2502-2507). (Word, Acrobat)
Form 2508. Designation a Compliance Coordinator - Form for notifying the secretary of state of an institution’s designated compliance coordinator, as required by section 2051.253(2), Occupations Code. (Word, Acrobat)
Form 2509. Cover Sheet for Implementation Standards - Form for submitting implementation standards and amendments to the secretary of state, as required by sections 2051.251 and 2051.252, Occupations Code. (Word, Acrobat)
Form 2510. Athlete Agent Notice of Conviction - Form for notifying the secretary of state of an agent’s conviction of a crime that in Texas would be an offense other than a Class C misdemeanor, as required by § 2051.109, Occupations Code. (Word, Acrobat)
Form 2511. Athlete Agent Notice of Decertification - Form for notifying the secretary of state of an agent’s decertification by a national professional sports association, as required by § 2051.109, Occupations Code. (Word, Acrobat