According to the Legislative Budget Board (LBB), HB 126 is not expected to result in any significant fiscal impact to the state. The bill's provisions, which expand and clarify the rights of student athletes to engage in name, image, and likeness (NIL) compensation activities and obtain professional representation, do not require the appropriation of new funds or create substantial new administrative responsibilities for state agencies or public institutions of higher education.

The analysis assumes that any administrative costs incurred by public universities and university systems in implementing the bill’s requirements—such as processing NIL disclosures or managing trademark permissions—can be absorbed within existing budgets and operational capacities. This reflects the expectation that institutions are already engaged in NIL-related compliance efforts due to ongoing national trends and related regulatory frameworks.

Similarly, no significant fiscal implication is anticipated for local governments, as the bill primarily affects state-supported institutions and does not impose mandates on local jurisdictions. Overall, the legislation is considered fiscally neutral and manageable within current resource allocations for affected agencies and higher education systems.

HB 126 is a forward-looking and responsive piece of legislation that modernizes Texas law in line with anticipated changes to NCAA regulations and ongoing legal developments across the country. The bill reflects a growing consensus among states and higher education institutions that student athletes should have the right to earn compensation for the use of their name, image, and likeness (NIL), not only once enrolled but also during recruitment. HB 126 removes existing prohibitions in the Texas Education Code that previously barred universities from providing or arranging NIL-related compensation for prospective student athletes and barred athletes from entering such agreements in connection with admission offers or athletic performance.

Importantly, the bill allows institutions and athletes to act in accordance with rules and court orders from governing bodies like athletic associations or conferences, creating consistency with national standards and reducing compliance uncertainty. By repealing statutory constraints and enabling these entities to participate in NIL actions authorized by such organizations, HB 126 ensures that Texas remains competitive in attracting student athletes while preserving safeguards against conflict with institutional policies.

The Legislative Budget Board projects no significant fiscal impact to state agencies or local governments, affirming that implementation can be achieved within existing resources. From a liberty-based policy perspective, HB 126 advances all five core principles: it protects individual liberty by expanding athletes' rights; promotes personal responsibility through disclosure and contract limitations; facilitates free enterprise by removing market barriers; upholds private property rights over one’s own likeness; and supports limited government by reducing statutory overreach.

Given its alignment with legal trends, economic fairness, and principled governance, Texas Policy Research recommends that lawmakers vote YES on HB 126.

• Individual Liberty: The bill affirms and expands the rights of student athletes to profit from their name, image, and likeness (NIL)—a direct expression of personal autonomy. By repealing statutory prohibitions that restricted athletes from entering NIL agreements during recruitment or while enrolled, the bill enhances personal freedom and protects students' ability to engage in lawful economic activity.
• Personal Responsibility: The bill maintains accountability by requiring student athletes to disclose NIL contracts to their institutions and comply with team policies, codes of conduct, and university honor codes. While it expands freedoms, it also demands transparency and ethical behavior.
• Free Enterprise: The bill removes state-imposed barriers that limited participation in the growing NIL economy, allowing universities and athletes to engage in competitive and voluntary market activity. It also accommodates external market forces by allowing adherence to rules set by athletic associations (like the NCAA) or court rulings.
• Private Property Rights: A student’s NIL is a form of intellectual property, and this bill safeguards the right to monetize it. By ensuring athletes can profit from their personal brand—while also requiring institutional permission to use trademarks or facilities—HB 126 protects both individual and institutional property rights.
• Limited Government: The bill repeals restrictive laws that previously governed NIL conduct, especially during recruitment. It places faith in institutions and athletes to self-regulate under the guidance of private associations rather than expanding state oversight. This represents a clear retreat from top-down control in favor of decentralized, voluntary systems.