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HB126

Regular Session

Relating to the compensation and professional representation of prospective student athletes and student athletes participating in intercollegiate athletic programs at certain institutions of higher education.

Critical
Low Cost
Effective:2025-06-05
Enforcing Agencies

Athletic Associations (e.g., NCAA, Conferences) - empowered by Section 51.9246(c-3) • Institutions of Higher Education (Internal Compliance Departments)

HB126
Relating to the compensation and professional representation of prospective student athletes and student athletes participating in intercollegiate ath...
Critical Urgency
Passed with Opposition
House Vote125 - 19
YEA
87% in favor144 voting
Senate Vote31 - 0
YEA
100% in favor31 voting
19
Total Opposition Votes
Cost Impact
Low
Effective
2025-06-05
Enforcing Agencies
Athletic AssociationsInstitutions of Higher Education
Primary Author: Rep. Carl Tepper
89th Texas Legislature
jdkey.com
01

Compliance Analysis

Key implementation requirements and action items for compliance with this legislation

Implementation Timeline

  • Effective Date: June 5, 2025 (Law took immediate effect).
  • Compliance Deadline: Immediate. Section 3 of the Act applies these requirements to any compensation paid on or after June 5, 2025.
  • Agency Rulemaking: No central state agency rulemaking is required. However, individual Institutions of Higher Education must immediately define "official team activities" and prescribe the specific manner for contract disclosures.

Immediate Action Plan

  • 1. Audit Payment Schedules: Review all outgoing payments scheduled for after June 5, 2025. Halt any payments related to the "Prohibited List" industries immediately.
  • 2. Update Intake Forms: Add a mandatory field for "Date of Birth" and "University Disclosure Receipt" for all new talent onboarding.
  • 3. Request Definitions: Contact the compliance directors of the universities where your sponsored athletes play and request their written definition of "Official Team Activities."
  • 4. Segregate Entities: If your business is a conglomerate with a prohibited arm (e.g., a hotel with a casino), ensure the contracting entity is the non-prohibited subsidiary.

Operational Changes Required

Contracts

Review and amend all NIL templates immediately.

  • New Warranties: You must insert a clause where the athlete warrants they are at least 17 years of age or currently enrolled. Contracts with recruits under 17 are statutorily void.
  • Disclosure Contingency: Add a condition precedent: "This Agreement is not valid until Athlete provides proof of disclosure to the designated University official."
  • Prohibited Industries: You must certify that the contracting entity does not deal in alcohol, tobacco, nicotine, anabolic steroids, sports betting, casino gambling, firearms (illegal for the athlete to purchase), or sexually oriented businesses.
  • Duration Cap: Contracts must explicitly terminate when the athlete’s participation in the athletic program ends.

Hiring/Training

  • "Know Your Client" (KYC) Protocols: Intake staff must be trained to verify age documentation for any athlete not yet enrolled in a university.
  • Sponsorship Vetting: Marketing teams must cross-reference all potential brand partners against the "Prohibited List" defined in Section 51.9246(k-1).

Reporting & Record-Keeping

  • Proof of Disclosure: While the *athlete* is legally required to disclose the contract to the university, the *business* should retain a copy of the submission receipt or confirmation email from the university compliance office to protect against contract invalidation.
  • IP Licenses: If your campaign utilizes university logos, colors, or uniforms, you must secure and file a written license from the university. The athlete’s permission is legally insufficient.

Fees & Costs

  • No New State Fees: There are no statutory filing fees.
  • Legal Audit Costs: Budget for immediate outside counsel review of legacy multi-year contracts. Payments made after June 5, 2025, on old contracts that violate the new "Prohibited List" may be illegal.

Strategic Ambiguities & Considerations

The NCAA Enforcement Trap (Section 51.9246(c-3))

The law contains a critical pivot: it states that if an institution or athlete complies with athletic association (e.g., NCAA or Conference) rules, they are subject to the enforcement mechanisms of that association.

  • The Risk: Previously, Texas law was viewed as a shield against NCAA penalties. This section suggests that by opting to follow NCAA bylaws, you voluntarily submit to their jurisdiction, potentially weakening the "state law defense" in future disputes.
  • Watch For: New guidance from the NCAA regarding enforcement priorities in Texas.

"Official Team Activities"

The law prohibits compensation for work performed during "official team activities," but leaves the definition to the specific university.

  • The Risk: A "team activity" at UT Austin may differ from one at Texas A&M.
  • Watch For: Updates to Student-Athlete Handbooks at each specific institution you do business with.

Need Help Understanding Implementation?

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Information presented is for general knowledge only and is provided without warranty, express or implied. Consult qualified government affairs professionals and legal counsel before making compliance decisions.

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Legislative Timeline

This bill's path through the Texas Legislature

Filed
Mar 10, 2025
Passed House
Apr 15, 2025
Passed Senate
May 27, 2025
Signed
Jun 5, 2025
TopicsAmusements, Games, SportsEducationEducation--higherEducation--higher--athleticsAthlete Agents
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House Authors

Rep. Carl TepperRepublican · Primary Author
Joint Authors

Senate Sponsors

Sen. Charles CreightonRepublican · Primary Sponsor
Cosponsors (2)

Bill Text(with markup)

View bill text in multiple formats on Texas Legislature website

Fiscal NoteView Original

Related Legislation

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More from Rep. Carl Tepper

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Related by Topic

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Quick Reference

Frequently Asked Questions

Common questions about HB126

Q

What does Texas HB126 do?

HB126 fundamentally expands the Texas NIL market by authorizing compensation for prospective student-athletes (recruits), provided they are at least 17 years old. However, it simultaneously imposes strict liability on corporate sponsors and collectives by mandating pre-contract disclosures and establishing a statutory "Prohibited List" of industries (e. g.

Q

Who authored HB126?

HB126 was authored by Texas Representative Carl Tepper during the Regular Session.

Q

When was HB126 signed into law?

HB126 was signed into law by Governor Greg Abbott on June 5, 2025.

Q

Which agencies enforce HB126?

HB126 is enforced by Athletic Associations (e.g., NCAA, Conferences) - empowered by Section 51.9246(c-3) and Institutions of Higher Education (Internal Compliance Departments).

Q

How urgent is compliance with HB126?

The compliance urgency for HB126 is rated as "critical". Businesses and organizations should review the requirements and timeline to ensure timely compliance.

Q

What is the cost impact of HB126?

The cost impact of HB126 is estimated as "low". This may vary based on industry and implementation requirements.

Q

What topics does HB126 address?

HB126 addresses topics including amusements, games, sports, education, education--higher, education--higher--athletics and athlete agents.

Legislative data provided by LegiScanLast updated: November 25, 2025

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