Modernizing the Collegiate Student Athlete Experience Act

I 117TH CONGRESS 1ST SESSION H. R. 3379 To establish a government corporation to oversee student athlete agents and third-party licensees of student athlete publicity rights, and for other purposes. IN THE HOUSE OF REPRESENTATIVES MAY 20, 2021 Mr. CHABOT introduced the following bill; which was referred to the Committee on Energy and Commerce A BILL To establish a government corporation to oversee student athlete agents and third-party licensees of student athlete publicity rights, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 3 (a) SHORT TITLE.—This Act may be cited as the 4 ‘‘Modernizing the Collegiate Student Athlete Experience 5 Act’’. 6 (b) TABLE OF CONTENTS.—The table of contents for 7 this Act is as follows: 8 Sec. 1. Short title; table of contents. Sec. 2. Establishment of National Intercollegiate Compensation Corporation. VerDate Sep 11 2014 00:29 Jul 03, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6211 E:\BILLS\H3379.IH H3379 pbinns on DSKJLVW7X2PROD with BILLS 2 •HR 3379 IH Sec. 3. Oversight of athlete agents and third-party licensees. Sec. 4. Covered compensation provided by third parties. Sec. 5. Enforcement by Federal Trade Commission. Sec. 6. Ability of student athletes to enter into agency contracts and name, image, and likeness agreements. Sec. 7. Role of intercollegiate athletics associations and conferences. Sec. 8. Employment matters. Sec. 9. Limitation of liability. Sec. 10. Preemption. Sec. 11. Definitions. SEC. 2. ESTABLISHMENT OF NATIONAL INTERCOLLEGIATE 1 COMPENSATION CORPORATION. 2 (a) ESTABLISHMENT.—There is established a govern- 3 ment corporation, to be known as the ‘‘National Intercolle- 4 giate Compensation Corporation’’, which shall not for any 5 purpose be an agency or instrumentality of the United 6 States Government and shall be subject to the provisions 7 of this Act. 8 (b) MEMBERSHIP IN CORPORATION.— 9 (1) IN GENERAL.—The members of the Cor- 10 poration shall be institutions of higher education. 11 (2) ELIGIBILITY.—The criteria for an institu- 12 tion of higher education to be eligible to be a mem- 13 ber of the Corporation shall be provided in the con- 14 stitution and bylaws of the Corporation. 15 (c) BOARD OF DIRECTORS.— 16 (1) IN GENERAL.—The Corporation shall be 17 governed by a Board of Directors. 18 (2) MEMBERSHIP.— 19 VerDate Sep 11 2014 00:29 Jul 03, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H3379.IH H3379 pbinns on DSKJLVW7X2PROD with BILLS 3 •HR 3379 IH (A) IN GENERAL.—The Board shall be 1 composed of the following: 2 (i) One representative from each of 3 the top 10 conferences in annual revenue 4 (as determined under subparagraph (B)), 5 who shall be chosen by the conference and 6 shall serve a term of 3 years. 7 (ii) One representative from each of 8 the 5 geographic regions of institutions of 9 higher education that are not members of 10 a conference described in clause (i), who 11 shall be chosen by the institutions of high- 12 er education of the region and shall serve 13 a term of 3 years. 14 (iii) Two former corporate executives, 15 who shall be selected as provided in sub- 16 paragraph (D) and shall serve a term of 2 17 years. 18 (iv) Three representatives of an inter- 19 collegiate athletics association, who shall 20 be selected by the association and shall 21 serve a term to be determined by the asso- 22 ciation. 23 (v) One former student athlete from 24 each of the 5 geographic regions, who shall 25 VerDate Sep 11 2014 00:29 Jul 03, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H3379.IH H3379 pbinns on DSKJLVW7X2PROD with BILLS 4 •HR 3379 IH be chosen by vote of the current student 1 athletes in the region and shall serve a 2 term of 3 years. 3 (B) DETERMINATION OF ANNUAL REV- 4 ENUE.—For purposes of subparagraph (A)(i), 5 the annual revenue of a conference— 6 (i) except as provided in clause (ii), 7 shall be the average of the annual revenue 8 of the conference published in intercolle- 9 giate athletics association financial data 10 for the 3 most recent years for which pub- 11 lished intercollegiate athletics association 12 financial data is available; and 13 (ii) after the date that is 5 years after 14 the date of the enactment of this Act, may 15 be determined using the method described 16 in clause (i) or by an alternative method 17 established by the Board. 18 (C) DETERMINATION OF 5 GEOGRAPHIC 19 REGIONS.—For purposes of subparagraph (A), 20 the 5 geographic regions shall be determined by 21 an intercollegiate athletics association. 22 (D) SELECTION OF FORMER CORPORATE 23 EXECUTIVE MEMBERS.—The members of the 24 VerDate Sep 11 2014 00:29 Jul 03, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H3379.IH H3379 pbinns on DSKJLVW7X2PROD with BILLS 5 •HR 3379 IH Board described in subparagraph (A)(iii) shall 1 be selected— 2 (i) in the case of the members initially 3 serving under such subparagraph, by an 4 intercollegiate athletics association; and 5 (ii) in the case of any members subse- 6 quently serving under such subparagraph, 7 by the Board in accordance with criteria 8 for selection that the Board shall establish. 9 (3) CHAIR.—The Chair of the Board shall be 10 selected by the Board from among the members of 11 the Board. 12 (4) MEETINGS.—The Board shall hold at least 13 2 in-person meetings each year. 14 (5) MAJORITY VOTE.—Any decision of the 15 Board shall require an affirmative vote by a majority 16 of the members of the Board present at the meeting. 17 (6) SUBCOMMITTEES.—The Board may create 18 subcommittees to oversee adjudications, investiga- 19 tions, and other matters before the Board. 20 (7) DISCLOSURES TO COMMISSION.—Each 21 member of the Board shall file an annual disclosure 22 with the Commission to limit conflicts of interest. 23 (8) COMPENSATION.—Members of the Board 24 shall serve without pay but may receive reimburse- 25 VerDate Sep 11 2014 00:29 Jul 03, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H3379.IH H3379 pbinns on DSKJLVW7X2PROD with BILLS 6 •HR 3379 IH ment from the Corporation for travel, lodging, and 1 meal expenses incurred as a result of official duties 2 performed as members of the Board. 3 (d) FUNDING.— 4 (1) FEES; SELF-FUNDING.—The Corporation 5 shall be funded by fees collected from registered ath- 6 lete agents and registered third-party licensees, or 7 from athlete agents and third-party licensees in con- 8 nection with application for registration with the 9 Corporation. 10 (2) NO FUNDING FROM INSTITUTIONS OF HIGH- 11 ER EDUCATION OR FEDERAL GOVERNMENT.—The 12 Corporation may not receive any funds from an in- 13 stitution of higher education or the Federal Govern- 14 ment. 15 (3) USE OF FUNDS.—The Corporation may 16 only use funds received by the Corporation to— 17 (A) carry out the functions of the Corpora- 18 tion under this Act; or 19 (B) promote intercollegiate athletics. 20 (e) GOVERNANCE AND POWERS.— 21 (1) CONSTITUTION AND BYLAWS.—The Board 22 shall adopt a constitution and bylaws for the Cor- 23 poration. 24 VerDate Sep 11 2014 00:29 Jul 03, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H3379.IH H3379 pbinns on DSKJLVW7X2PROD with BILLS 7 •HR 3379 IH (2) GENERAL CORPORATE POWERS.—The Cor- 1 poration may— 2 (A) establish and maintain offices to con- 3 duct the affairs of the Corporation; 4 (B) enter into contracts, and accept gifts, 5 legacies, and devises, in furtherance of the du- 6 ties of the Corporation under this Act; 7 (C) acquire, own, lease, encumber, and 8 transfer property as necessary to carry out the 9 duties of the Corporation under this Act; 10 (D) borrow money, issue instruments of in- 11 debtedness, and secure its obligations by grant- 12 ing security interests in its property as nec- 13 essary to carry out the duties of the Corpora- 14 tion under this Act; 15 (E) publish a magazine, newsletter, and 16 other publications consistent with the duties of 17 the Corporation under this Act; 18 (F) approve and revoke membership in the 19 Corporation; and 20 (G) conduct any other activity necessary 21 and proper to carry out the duties of the Cor- 22 poration under this Act. 23 (f) RESTRICTIONS.— 24 VerDate Sep 11 2014 00:29 Jul 03, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H3379.IH H3379 pbinns on DSKJLVW7X2PROD with BILLS 8 •HR 3379 IH (1) PROFIT AND STOCK.—The Corporation may 1 not engage in business for profit or issue stock. 2 (2) POLITICAL ACTIVITIES.—The Corporation 3 shall be nonpolitical and may not promote or oppose 4 the candidacy of an individual seeking public office. 5 (g) HEADQUARTERS, PRINCIPAL OFFICE, AND 6 MEETINGS.—The Corporation shall maintain its principal 7 office and national headquarters in a location in the 8 United States decided by the Corporation. The Corpora- 9 tion may hold its annual and special meetings in the places 10 decided by the Corporation. 11 SEC. 3. OVERSIGHT OF ATHLETE AGENTS AND THIRD- 12 PARTY LICENSEES. 13 (a) REGISTRATION REQUIRED.— 14 (1) ATHLETE AGENTS.—It shall be unlawful for 15 an athlete agent to enter into an agency contract 16 with a student athlete, or to directly or indirectly re- 17 cruit or solicit a student athlete to enter into an 18 agency contract, unless such athlete agent is a reg- 19 istered athlete agent. 20 (2) THIRD-PARTY LICENSEES.—It shall be un- 21 lawful for a third-party licensee to license publicity 22 rights from any student athlete or group of student 23 athletes, unless such third-party licensee is a reg- 24 istered third-party licensee. 25 VerDate Sep 11 2014 00:29 Jul 03, 2021 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H3379.IH H3379 pbinns on DSKJLVW7X2PROD with BILLS 9 •HR 3379 IH (b) RULES FOR ATHLETE AGENTS AND THIRD- 1 PARTY LICENSEES.— 2 (1) IN GENERAL.—The Board shall adopt rules 3 that— 4 (A) provide for how athlete agents and 5 third-party licensees may register with the Cor- 6 poration; and 7 (B) govern the conduct of registered ath- 8 lete agents and registered third-party licensees. 9 (2) BIANNUAL DISCLOSURES.—The rules adopt- 10 ed under paragraph (1) shall require each registered 11 athlete agent and each registered third-party li- 12 censee to file with the Corporation a biannual disclo- 13 sure that lists each agency contract or name, image, 14 and likeness agreement entered into by such athlete 15 agent or third-party licensee during the period cov- 16 ered by the disclosure and summarizes the material 17 terms of such contract or agreement, including any 18 terms relating to price or compensation. 19 (3) COMPLIANCE TESTS.—The rules adopted 20 under paragraph (1) shall require each registered 21 athlete agent and each registered third-party li- 22 censee to take and pass, at least every 2 years, a 23 compliance test developed by the Corporation that 24 evaluates— 25 VerDate Sep 11 2014 00:29 Jul 03, 2021 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H3379.IH H3379 pbinns on DSKJLVW7X2PROD with BILLS 10 •HR 3379 IH (A) the ability of the athlete agent or 1 third-party licensee to comply with the rules 2 adopted under paragraph (1) and approved 3 under paragraph (6); and 4 (B) the compliance of the athlete agent or 5 third-party licensee with such rules during the 6 preceding 2-year period. 7 (4) LIMITATION ON DURATION OF CONTRACTS 8 AND AGREEMENTS.—The rules adopted under para- 9 graph (1) shall prohibit a registered athlete agent or 10 registered third-party licensee from entering into an 11 agency contract or name, image, and likeness agree- 12 ment with a student athlete unless such contract or 13 agreement— 14 (A) has a term of not more than 5 years; 15 and 16 (B) permits either party to terminate such 17 contract or agreement without penalty at any 18 time before the end of the term of such contract 19 or agreement. 20 (5) ARBITRATION.—The rules adopted under 21 paragraph (1) may require a registered athlete agent 22 or registered third-party licensee to submit a dispute 23 with a student athlete under an agency contract or 24 VerDate Sep 11 2014 00:29 Jul 03, 2021 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H3379.IH H3379 pbinns on DSKJLVW7X2PROD with BILLS 11 •HR 3379 IH name, image, and likeness agreement to arbitration 1 by a neutral party. 2 (6) RULES SUBJECT TO COMMISSION AP- 3 PROVAL.— 4 (A) IN GENERAL.—A rule adopted under 5 paragraph (1) or any amendment to or repeal 6 of such a rule (in this paragraph referred to as 7 a ‘‘proposed rule’’) may not take effect unless 8 such proposed rule has been approved by the 9 Commission. 10 (B) FILING WITH COMMISSION.—The 11 Board shall file with the Commission, in accord- 12 ance with such rules as the Commission may 13 prescribe, copies of any proposed rule. 14 (C) PUBLICATION.—The Commission shall 15 publish a proposed rule filed under subpara- 16 graph (B) and provide interested persons an op- 17 portunity to comment. 18 (D) TIMELINE.—Not later than 45 days 19 after a proposed rule is published under sub- 20 paragraph (C), the Commission shall approve or 21 disapprove the proposed rule. 22 (E) STANDARD FOR APPROVAL.—The 23 Commission shall approve a proposed rule if the 24 Commission finds that the proposed rule is con- 25 VerDate Sep 11 2014 00:29 Jul 03, 2021 Jkt 019200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H3379.IH H3379 pbinns on DSKJLVW7X2PROD with BILLS 12 •HR 3379 IH sistent with the requirements and purposes of 1 this Act. 2 (c) DATABASE OF REGISTERED ATHLETE AGENTS 3 AND REGISTERED THIRD-PARTY LICENSEES.—The Cor- 4 poration shall maintain, and make publicly available on 5 the website of the Corporation, a searchable and updated 6 database of registered athlete agents and registered third- 7 party licensees, including the biannual disclosures filed by 8 each such agent or licensee under subsection (b)(2). 9 (d) INVESTIGATIONS.— 10 (1) IN GENERAL.—The Corporation may inves- 11 tigate violations of subsection (a) and the rules ap- 12 proved under subsection (b)(6). 13 (2) SUBPOENA POWER.— 14 (A) IN GENERAL.—The Board may issue 15 subpoenas requiring the attendance and testi- 16 mony of witnesses and the production of any 17 evidence relating to any matter that the Cor- 18 poration is empowered to investigate by para- 19 graph (1). The attendance of witnesses and the 20 production of evidence may be required from 21 any place within the United States at any des- 22 ignated place of hearing within the United 23 States. 24 VerDate Sep 11 2014 00:29 Jul 03, 2021 Jkt 019200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H3379.IH H3379 pbinns on DSKJLVW7X2PROD with BILLS 13 •HR 3379 IH [Text truncated for display. Full text available on Congress.gov.]