S.B. No. 1385
AN ACT
relating to the compensation and professional representation of
student athletes participating in intercollegiate athletic
programs at certain institutions of higher education.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. The legislature finds and declares the
following:
(1) intercollegiate athletics are an essential part of
the fabric of this state;
(2) the competitive integrity of intercollegiate
athletics is of vital importance;
(3) the United States Congress has failed to act to
provide uniform guidance to the states on the matter of
intercollegiate athletes receiving compensation in exchange for
the use of the athlete's name, image, or likeness; and
(4) the United States Congress must act on this matter
to ensure the competitive integrity of intercollegiate athletics.
SECTION 2. Subchapter Z, Chapter 51, Education Code, is
amended by adding Section 51.9246 to read as follows:
Sec. 51.9246. COMPENSATION AND PROFESSIONAL REPRESENTATION
OF STUDENT ATHLETES PARTICIPATING IN INTERCOLLEGIATE ATHLETIC
PROGRAMS. (a) In this section:
(1) "Athlete agent" has the meaning assigned by
Section 2051.001, Occupations Code.
(2) "General academic teaching institution" and
"private or independent institution of higher education" have the
meanings assigned by Section 61.003.
(3) "Honor code" means a set of rules or principles
governing an academic community to which a student agrees to abide
when attending an institution to which this section applies.
(4) "Institutional contract" means a contract between
an institution to which this section applies or its designated
representative and an external party that includes a sponsorship
agreement governing the use of the institution's trademarks in
connection with athletics.
(5) "Team contract" means a contract between a student
athlete and an institution to which this section applies and
includes any rules or expectations of the institution's athletic
department or head coach that require a student athlete's
compliance as a condition under the contract of participation as a
member of the intercollegiate athletic program.
(b) This section applies only to:
(1) a general academic teaching institution; or
(2) a private or independent institution of higher
education.
(c) An institution to which this section applies may not:
(1) adopt or enforce a policy, requirement, standard,
or limitation that prohibits or otherwise prevents a student
athlete participating in an intercollegiate athletic program at the
institution from:
(A) earning compensation for the use of the
student athlete's name, image, or likeness when the student athlete
is not engaged in official team activities, as that term is defined
by the institution; or
(B) obtaining professional representation,
including representation by an attorney licensed to practice law in
this state, for contracts or other legal matters relating to the use
of the student athlete's name, image, or likeness; or
(2) provide or solicit a prospective student athlete
of an intercollegiate athletic program at the institution with
compensation in relation to the prospective student athlete's name,
image, or likeness.
(d) A scholarship, grant, or similar financial assistance
awarded to a student athlete by an institution to which this section
applies that covers the student athlete's cost of attendance at the
institution is not compensation for purposes of this section.
(e) A student athlete participating in an intercollegiate
athletic program at an institution to which this section applies
may not be disqualified from eligibility for a scholarship, grant,
or similar financial assistance awarded by the institution because
the student athlete:
(1) earns compensation from the use of the student
athlete's name, image, or likeness when the student athlete is not
engaged in official team activities; or
(2) obtains professional representation, including
representation by an attorney licensed to practice law in this
state, for contracts or other legal matters relating to use of the
student athlete's name, image, or likeness.
(f) An institution to which this section applies may not
prescribe a team contract for an intercollegiate athletic program
that prohibits or otherwise prevents a student athlete from using
the student athlete's name, image, or likeness for a commercial
purpose when the student athlete is not engaged in official team
activities.
(g) A student athlete participating in an intercollegiate
athletic program at an institution to which this section applies:
(1) shall, before entering into the contract, disclose
to the institution, in the manner prescribed by the institution,
any proposed contract the student athlete may sign for use of the
student athlete's name, image, or likeness;
(2) may not enter into a contract for the use of the
student athlete's name, image, or likeness if:
(A) any provision of the contract conflicts with
a provision of the student athlete's team contract, a provision of
an institutional contract of the institution, a policy of the
athletic department of the institution, or a provision of the honor
code of the institution;
(B) the compensation for the use of the student
athlete's name, image, or likeness is provided:
(i) in exchange for athletic performance or
attendance at the institution;
(ii) by the institution;
(iii) in exchange for property owned by the
institution or for providing an endorsement while using
intellectual property or other property owned by the institution;
or
(iv) in exchange for an endorsement of
alcohol, tobacco products, e-cigarettes or any other type of
nicotine delivery device, anabolic steroids, sports betting,
casino gambling, a firearm the student athlete cannot legally
purchase, or a sexually oriented business as defined in Section
243.002, Local Government Code; or
(C) the duration of the contract extends beyond
the student athlete's participation in the intercollegiate
athletic program;
(3) is not considered an employee of the institution
based on the student athlete's participation in the intercollegiate
athletic program; and
(4) may earn compensation from selling the student
athlete's autograph in a manner that does not otherwise conflict
with a provision of this section.
(h) An institution to which this section applies that
identifies a provision in a contract disclosed to the institution
by a student athlete under Subsection (g)(1) that conflicts with a
provision in the student athlete's team contract, a provision of an
institutional contract of the institution, a policy of the athletic
department of the institution, or a provision of the honor code of
the institution shall promptly disclose the conflict to the student
athlete or the student athlete's representative, if applicable.
The student athlete or the student athlete's representative is
responsible for resolving the conflict not later than the 10th day
after the date of the disclosure.
(i) An institution to which this section applies shall
require a student athlete participating in an intercollegiate
athletic program at the institution to attend a financial literacy
and life skills workshop at the beginning of the student's first and
third academic years at the institution. The workshop must be at
least five hours in duration and include information on financial
aid, debt management, time management, budgeting, and academic
resources available to the student athlete. The institution may
not during the workshop allow any provider of financial products or
services to:
(1) market, advertise, or refer the provider's
services to a student athlete; or
(2) solicit a student athlete to use the provider's
services.
(j) No individual, corporate entity, or other organization
may:
(1) enter into any arrangement with a prospective
student athlete relating to the prospective student athlete's name,
image, or likeness prior to their enrollment in an institution of
higher education; or
(2) use inducements of future name, image, and
likeness compensation arrangement to recruit a prospective student
athlete to any institution of higher education.
(k) Nothing in this section may be construed as permitting
an athlete agent to take any action prohibited under Section
2051.351, Occupations Code.
SECTION 3. Section 51.9246(f), Education Code, as added by
this Act, applies only to a contract entered into, modified, or
renewed on or after the effective date of this Act.
SECTION 4. This Act takes effect July 1, 2021, if it
receives a vote of two-thirds of all the members elected to each
house, as provided by Section 39, Article III, Texas Constitution.
If this Act does not receive the vote necessary to take effect July
1, 2021, this Act takes effect September 1, 2021.
______________________________ ______________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 1385 passed the Senate on
April 22, 2021, by the following vote: Yeas 28, Nays 2, one
present not voting; and that the Senate concurred in House
amendment on May 28, 2021, by the following vote: Yeas 28, Nays 2,
one present not voting.
______________________________
Secretary of the Senate
I hereby certify that S.B. No. 1385 passed the House, with
amendment, on May 23, 2021, by the following vote: Yeas 117,
Nays 27, one present not voting.
______________________________
Chief Clerk of the House
Approved:
______________________________
Date
______________________________
Governor