HB404 Alabama 2021 Session

Summary

Primary Sponsor

Kyle South

Republican

Co-Sponsors

Steve ClouseJoe LovvornChris Pringle

Session

Regular Session 2021

Title

Student athletes, may earn compensation for use of name, image, or likeness, Alabama Collegiate Athletics Commission, established, conditions for compensation

Summary

HB404 lets Alabama student athletes earn compensation for the use of their name, image, or likeness and creates a state commission to oversee related rules.

What This Bill Does

It allows student athletes at Alabama public universities and colleges (excluding the Alabama Community College System) to be paid for the use of their name, image, or likeness at market value. It sets rules to prevent schools from unreasonably restricting these earnings, requires financial literacy training for athletes, and creates a commission to develop NIL rules and handle disputes. It also establishes enforcement mechanisms, penalties for violations, and clarifies that receiving NIL money does not make athletes employees.

Who It Affects

• Student athletes at Alabama postsecondary institutions (excluding the Alabama Community College System) who may earn compensation for their name, image, or likeness and must follow contract, disclosure, and representation rules.
• Postsecondary educational institutions in Alabama (excluding the Alabama Community College System) that must implement NIL policies, oversee endorsements and branding restrictions, provide financial literacy programming, and comply with commission oversight and penalties.

Key Provisions

• Student athletes may earn compensation for their name, image, or likeness, with payments based on market value and from third parties (not the institution). Scholarships are not reduced or revoked due to NIL activities, and compensation cannot be conditioned on athletic performance or attendance at a particular school.
• Institutions may prohibit certain endorsements (tobacco, alcohol, controlled substances, adult entertainment, gambling) and may restrict wearing insignia or branding on gear; if a contract uses school marks, written permission is required and the school may be compensated with market-rate terms.
• Students may hire professional representation (registered athlete agents or licensed attorneys) and must give the school at least seven days’ written notice before entering into representation agreements.
• A contract for NIL use must not extend beyond the student’s participation in the sport at the institution; contracts must be disclosed to the institution before execution.
• Institutions must provide financial literacy and life-skills programming (budgets, debt management, time management, academic resources) and may not use programming to market financial products.
• The Alabama Collegiate Athletics Commission is created to set rules, manage athlete agents, establish dispute resolution, and oversee NIL compliance; violations can incur civil penalties up to $1,000, and enforcement is coordinated with the Alabama Athlete Agents Commission; a formal reporting and investigation process is required.
• NIL compensation may not be used as an inducement to enroll or stay at a specific school; the act does not create an employer-employee relationship between student athletes and the school.
• The act becomes effective July 1, 2021.

AI-generated summary using openai/gpt-5-nano on Feb 22, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Student Athletes