87S20663 MM-D
By: Cook H.B. No. 240
A BILL TO BE ENTITLED
AN ACT
relating to the compensation and professional representation of
students participating in University Interscholastic League
activities.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter D, Chapter 33, Education Code, is
amended by adding Section 33.099 to read as follows:
Sec. 33.099. COMPENSATION AND PROFESSIONAL REPRESENTATION
OF STUDENTS PARTICIPATING IN UNIVERSITY INTERSCHOLASTIC LEAGUE
ACTIVITIES. (a) In this section:
(1) "Athlete agent" has the meaning assigned by
Section 2051.001, Occupations Code.
(2) "League" means the University Interscholastic
League.
(3) "Participation agreement" means an agreement
between a student and a school to which this section applies
regarding the student's participation in a league activity and
includes any rules or expectations of the school's league activity
department, head coach, or sponsor that require a student's
compliance as a condition of participation in the league activity.
(4) "School sponsorship contract" means a contract
between a school to which this section applies or its designated
representative and an external party that includes a sponsorship
agreement governing the use of the school's trademarks in
connection with a league activity.
(b) This section applies only to a public or private primary
or secondary school that participates in league activities.
(c) The league or a school to which this section applies may
not adopt or enforce a policy, requirement, standard, or limitation
that prohibits or otherwise prevents a student participating in a
league activity from:
(1) earning compensation for the use of the student's
name, image, or likeness when the student is not engaged in official
league activities, as that term is defined by the league; or
(2) 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's name, image, or likeness.
(d) A scholarship, grant, or similar financial assistance
awarded to a student by a private school to which this section
applies that covers the student's cost of attendance at the school
is not compensation for purposes of this section.
(e) A student participating in a league activity at a
private school to which this section applies may not be
disqualified from eligibility for a scholarship, grant, or similar
financial assistance awarded by the school because the student:
(1) earns compensation from the use of the student's
name, image, or likeness when the student is not engaged in official
league 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's name, image, or likeness.
(f) A school to which this section applies may not:
(1) prescribe a participation agreement for a league
activity that prohibits or otherwise prevents a student from using
the student's name, image, or likeness for a commercial purpose
when the student is not engaged in official league activities; or
(2) provide or solicit a prospective student of a
league activity at the school with compensation in relation to the
prospective student's name, image, or likeness.
(g) A student who is 18 years of age or older, or the parent
of or person standing in parental relation to a student who is not
18 years of age or older, and who participates in a league activity
at a school to which this section applies:
(1) shall, before entering into the contract, disclose
to the school, in the manner prescribed by the school, any proposed
contract for use of the student's name, image, or likeness; and
(2) may not enter into a contract for the use of the
student's name, image, or likeness if:
(A) any provision of the contract conflicts with
a provision of the student's participation agreement, a provision
of a school sponsorship contract of the school, a policy of the
league activity department at the school, or a provision of the
student code of conduct of the school;
(B) the compensation for the use of the student's
name, image, or likeness is provided:
(i) in exchange for league activity
performance or attendance at the school;
(ii) by the school;
(iii) in exchange for property owned by the
school or for providing an endorsement while using intellectual
property or other property owned by the school; 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 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's participation in the league activity.
(h) A student participating in a league activity at a school
to which this section applies:
(1) is not considered an employee of the school based
on the student's participation in the league activity; and
(2) may earn compensation from selling the student's
autograph in a manner that does not otherwise conflict with a
provision of this section.
(i) A school to which this section applies that identifies a
provision in a contract disclosed to the school by a student under
Subsection (g)(1) that conflicts with a provision in the student's
participation agreement, a provision of a school sponsorship
contract of the school, a policy of the league activity department
of the school, or a provision of the student code of conduct of the
school shall promptly disclose the conflict to the student or the
student's parent or person standing in parental relation to the
student, as applicable. The student or the student's parent or
person standing in parental relation to the student, as applicable,
is responsible for resolving the conflict not later than the 10th
day after the date of the disclosure.
(j) A student participating in a league activity at a school
to which this section applies may not access any money earned as
compensation for the use of the student's name, image, or likeness
until the date on which the student:
(1) becomes 18 years of age or graduates from high
school, whichever occurs later; or
(2) is emancipated through marriage, through removal
of the disabilities of minority by court order, or by other
operation of law.
(k) A student's parent or person standing in parental
relation to a student owes a fiduciary duty to the student to manage
any compensation the student receives for the use of the student's
name, image, or likeness.
(l) An individual, corporate entity, or other organization
may not:
(1) enter into any arrangement with a prospective
student or the student's parent or person standing in parental
relation to the student, as applicable, relating to the prospective
student's name, image, or likeness prior to their enrollment at a
school to which this section applies; or
(2) use inducements of future name, image, and
likeness compensation arrangement to recruit a prospective student
to any school to which this section applies.
(m) This section may not be construed as permitting an
athlete agent to take any action prohibited under Section 2051.351,
Occupations Code.
SECTION 2. Section 51.9246(j), Education Code, as added by
S.B. 1385, Acts of the 87th Legislature, Regular Session, 2021, is
amended to read as follows:
(j) No individual, corporate entity, or other organization
may:
(1) prior to a prospective student athlete's
enrollment in an institution of higher education, enter into any
arrangement with the [a] prospective student athlete relating to
the prospective student athlete's name, image, or likeness while
enrolled at [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.
SECTION 3. Section 33.099(g), 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 immediately 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 for immediate effect, this
Act takes effect on the 91st day after the last day of the
legislative session.