Amateur Athletes Protection and Compensation Act of 2021

To provide standards relating to compensation for the use of the names, images, and likenesses of amateur intercollegiate athletes and to provide protections for amateur intercollegiate athletes, and for other purposes. 1. Short title This Act may be cited as the Amateur Athletes Protection and Compensation Act of 2021 2. Definitions In this Act: (1) Agency contract The term agency contract (2) AIAC The term AIAC (3) Amateur athlete representative (A) In general The term amateur athlete representative (i) enters into an agency contract with an amateur intercollegiate athlete; or (ii) directly or indirectly recruits or solicits an amateur intercollegiate athlete for the purpose of— (I) entering into an agency contract with the amateur intercollegiate athlete; (II) representing or attempting to represent the amateur intercollegiate athlete for the purpose of marketing his or her athletics ability or reputation for financial gain; or (III) seeking to obtain any type of financial gain or benefit from the potential earnings of the amateur intercollegiate athlete as a professional athlete. (B) Inclusions The term amateur athlete representative (i) a certified contract advisor; (ii) a financial advisor; (iii) a marketing representative; (iv) a brand manager; and (v) any individual employed by or associated with an individual described in any of clauses (i) through (iv). (C) Exclusions The term amateur athlete representative (i) the spouse, a parent, a sibling, a grandparent, or a legal guardian of an amateur intercollegiate athlete; or (ii) an individual acting solely on behalf of a professional sports team or a professional sports organization. (4) Amateur intercollegiate athlete The term amateur intercollegiate athlete (5) Amateur intercollegiate athletic event (A) In general The term amateur intercollegiate athletic event (B) Inclusion The term amateur intercollegiate athletic event (6) Amateur intercollegiate athletic competition The term amateur intercollegiate athletic competition (7) Athletics booster The term athletics booster (A) has provided 1 or more donations exceeding $5,000, in the aggregate, to obtain season tickets for any sport at an institution of higher education; (B) has made 1 or more financial contributions exceeding $5,000, in the aggregate, to the athletics department or other athletics management organization of an institution of higher education; or (C) has assisted, or been requested by an employee of an institution of higher educations to assist, in the recruitment of an amateur intercollegiate athlete. (8) Conference The term conference (A) has as members 2 or more institutions of higher education; (B) arranges championships and sets rules for amateur intercollegiate athletic competition. (9) Cost of attendance The term cost of attendance (A) has the meaning given the term in section 472 of the Higher Education Act of 1965 ( 20 U.S.C. 1087ll (B) shall be calculated by the financial aid office of an institution of higher education applying the same standards, policies, and procedures for all students. (10) Covered compensation (A) In general The term covered compensation (B) Exclusion The term covered compensation (i) grants-in-aid; (ii) Federal Pell Grants and other State or Federal grants unrelated and not awarded with regard to participation in amateur intercollegiate athletic events; (iii) health insurance and costs of health care, including health insurance and health care costs wholly or partly self-funded by an institution of higher education or a national amateur athletic association; (iv) disability and loss of value insurance, including disability and loss of value insurance that is wholly or partly self-funded by an institution of higher education or a national amateur athletic association; (v) career counseling, job placement services, and other guidance available to all students at an institution of higher education; and (vi) payment of hourly wages and benefits for work actually performed (and not for participation in amateur intercollegiate athletic event) at a rate commensurate with the going rate in the locality of an institution of higher education for similar work. (11) Endorsement contract The term endorsement contract 15 U.S.C. 7801 (12) Former amateur intercollegiate athlete The term former intercollegiate athlete (13) Grant-in-aid The term grant-in-aid (A) means a scholarship, grant, stipend, or other form of financial assistance, including the provision of tuition, room, board, books, or funds for fees or personal expenses, that— (i) is paid or provided by an institution of higher education to a student for the student's undergraduate or graduate course of study; and (ii) is in an amount that does not exceed the cost of attendance for such student at the institution; and (B) does not include covered compensation paid to an individual who is an amateur intercollegiate athlete or a former amateur intercollegiate athlete. (14) Image The term image (15) Institution of higher education The term institution of higher education 20 U.S.C. 1001 (16) Likeness The term likeness (A) with respect to an amateur intercollegiate athlete of a sport for which the athlete has a jersey number, the jersey number associated with the athlete and the sport in which the athlete participates at a particular institution of higher education during the period of the participation of the athlete in the sport at the institution of higher education, if the jersey number is accompanied by— (i) a logo or color scheme that is clearly associated with the institution of higher education; or (ii) some other means by which the jersey number is clearly associated with the particular athlete; and (B) with respect to any amateur intercollegiate athlete— (i) the uniquely identifiable voice or catch phrase of the athlete; or (ii) any other trademark that identifies or distinguishes the athlete. (17) Name The term name (A) a combination of a first and last or family name that identifies the athlete; (B) a last or family name that identifies the athlete; or (C) a unique nickname that identifies the athlete. (18) National amateur athletic association (A) In general The term national amateur athletic association (i) sponsors or arranges amateur intercollegiate athletic competition between institutions of higher education; and (ii) sets common rules, standards, procedures, or guidelines for the administration of amateur intercollegiate athletic competition at institutions of higher education. (B) Inclusions The term national amateur athletic association (i) the National Collegiate Athletic Association; and (ii) each division and member conference of the National Collegiate Athletic Association, or of any other national amateur athletic association, separately and collectively. (19) Third party The term third party (A) is not an athletics department or an athletics booster of an institution of higher education; and (B) is unaffiliated with an athletics department or an athletics booster of an institution of higher education. (20) Unaffiliated With respect to 2 or more individuals or entities, the term unaffiliated 3. Covered compensation provided by unaffiliated third parties The provision of covered compensation to an amateur intercollegiate athlete who is enrolled, or may in the future enroll, in an institution of higher education— (1) may only be promised, paid, and permitted if the covered compensation is sourced from, and provided at the discretion of, a third party; and (2) shall not be promised, paid, or permitted to induce— (A) the recruitment of an amateur intercollegiate athlete to any institution of higher education or a group of institutions of higher education; or (B) an amateur intercollegiate athlete to continue attending a particular institution of higher education. 4. Protections for amateur intercollegiate athletes (a) Representation contracts A national amateur athletic association or an institution of higher education may not punish or prohibit the participation of an amateur intercollegiate athlete in an amateur intercollegiate athletic event or amateur intercollegiate athletic competition based on the amateur intercollegiate athlete having entered into an agency contract with an amateur athlete representative who has been certified by the AIAC in accordance with section 8(b)(4). (b) Endorsement contracts (1) In general Except as provided in paragraph (2), a national amateur athletic association or an institution of higher education may not punish or prohibit the participation of an amateur intercollegiate athlete in an intercollegiate athletic event or amateur intercollegiate athletic competition based on the amateur intercollegiate athlete having entered into an endorsement contract with a third party. (2) Exceptions A national amateur athletic association or an institution of higher education may prohibit the participation of an amateur intercollegiate athlete in an intercollegiate athletic event or amateur intercollegiate athletic competition based on the amateur intercollegiate athlete having entered into an endorsement contract with a third party if the contract violates— (A) the code of student conduct of the applicable national amateur athletic association or institution of higher education; or (B) a rule established by the AIAC in accordance with section 8(b)(2). (3) Limitation During and immediately before and after an amateur intercollegiate athletic event, an institution of higher education may prohibit an amateur intercollegiate athlete enrolled at such institution from engaging in promotional or endorsement activities in connection with an endorsement contract. (4) Disclosures (A) Enrolled athletes With respect to an amateur intercollegiate athlete enrolled in an institution of higher education who enters into an endorsement contract, the amateur intercollegiate athlete shall, not later than 7 days after entering into the endorsement contract, provide to the institution of higher education a copy of the endorsement contract. (B) Recruited athletes With respect to an amateur intercollegiate athlete who is or may be recruited to attend, but not yet enrolled in, an institution of higher education and who enters into an endorsement contract, the amateur intercollegiate athlete shall, before signing a letter of intent, provide to the institution of higher education a copy of all current and expired endorsement contracts entered into by the amateur intercollegiate athlete. (c) Rescission of agreements An amateur intercollegiate athlete who no longer participates in amateur intercollegiate athletic competitions may rescind an endorsement contract with a remaining term of more than 1 year— (1) without being held liable for breach; and (2) with no obligation to return payments received before giving notice of the rescission. (d) Professional sports drafts A national amateur athletic association or an institution of higher education may not prohibit the participation of an amateur intercollegiate athlete in an amateur intercollegiate athletic event based on the amateur intercollegiate athlete having entered into a professional sports draft, if the amateur intercollegiate athlete— (1) does not receive compensation, directly or indirectly, from— (A) a professional sports league; (B) a professional sports team; or (C) a sports agent; (D) an amateur athlete representative; or (E) any individual or entity affiliated with an individual or entity described in any of subparagraphs (A) through (D); and (2) not later than 7 days after the completion of the draft, declares his or her intent to resume participation in amateur intercollegiate athletic competition. (e) Grant-in-Aid protection (1) In general Subject to paragraph (2), an institution of higher education shall honor the grant-in-aid of an amateur intercollegiate athlete. (2) Former amateur intercollegiate athletes An institution of higher education shall continue to provide a grant-in-aid covering full tuition, books, and fees to any former amateur intercollegiate athlete who— (A) received a full grant-in-aid while enrolled at the institution of higher education; and (B) has not completed his or her course of study for an undergraduate degree as a result of pursuing a career in professional sports. (3) Revocation and reinstatement (A) Revocation An institution of higher education may revoke the grant-in-aid of an amateur intercollegiate athlete or a former amateur intercollegiate athlete who— (i) transfers to another institution of higher education; or (ii) does not— (I) remain in good standing, determined in accordance with— (aa) the rules established by the AIAC under section 8(b)(2); or (bb) in the case of an amateur intercollegiate athlete who is enrolled in an institution of higher education the standards of which are more stringent than the standards described in item (aa), the standards of the institution of higher education; (II) comply with the code of conduct of the institution of higher education; and (III) meet athletic program standards and norms for participating in mandatory team athletic activities. (B) Limitations An institution of higher education may not revoke the grant-in-aid of an amateur intercollegiate athlete— (i) on the basis of the amateur intercollegiate athlete's athletics ability, performance, or contribution to team success; or (ii) as a result of an injury or illness or based on a physical or mental medical condition of the amateur intercollegiate athlete. (C) Reinstatement In the case of a revocation under subparagraph (A), an institution of higher education may reinstate grant-in-aid if the amateur intercollegiate athlete concerned reestablishes good standing. (f) Limitation on transfer penalties An amateur intercollegiate athletics association shall allow an amateur intercollegiate athlete in any sport to transfer from one institution of higher education to another not less than once without losing or delaying eligibility for intercollegiate athletics if— (1) not less than 7 days before transferring, the amateur intercollegiate athlete provides to his or her athletic director notice of intent to transfer; and (2) the transfer does not occur during— (A) the season of the sport of the amateur intercollegiate athlete; or (B) the 60-day period before the commencement of such season. (g) Medical expenses Except as provided in paragraph (3), the responsibilities of institutions of higher education with respect to the health care coverage and medical expenses of amateur intercollegiate athletes are as follows: (1) Out-of-pocket expenses (A) Institutions of higher education reporting $20,000,000 or more An institution of higher education that reports not less than $20,000,000 in total annual athletics revenue to the Department of Education during the academic year immediately preceding the date of the last amateur intercollegiate athletic competition of an amateur intercollegiate athlete shall, during the 2-year period beginning on the day after such last amateur intercollegiate athletic competition, be financially responsible for all out-of-pocket medical expenses, up to the deductible, of the amateur intercollegiate athlete’s health care coverage for any injury or communicable disease that was incurred or acquired while the amateur intercollegiate athlete was participating in an amateur intercollegiate athletic event or an amateur intercollegiate athletic competition. (B) Institutions of higher education reporting $50,000,000 or more An institution of higher education that reports not less than $50,000,000 in total annual athletics revenue to the Department of Education during the academic year immediately preceding the date of the last amateur intercollegiate athletic competition of an amateur intercollegiate athlete shall, during the 4-year period beginning on the day after such last amateur athletic competition, be financially responsible for— (i) providing or procuring the amateur intercollegiate athlete's health care coverage for any injury or communicable disease that was incurred or acquired while the amateur intercollegiate athlete was participating in an amateur intercollegiate athletic event or an amateur intercollegiate athletic competition; and (ii) all out-of-pocket medical expenses, up to the deductible, for medical care for such injury or disease. (2) Second opinions During the enrollment of an amateur intercollegiate athlete in an institution of higher education and continuing through the 2-year period described in subparagraph (A) of paragraph (1) or the 4-year period described in subparagraph (B) of that paragraph, as applicable, an institution of higher education shall be financially responsible for the expense of obtaining, for amateur intercollegiate athletes and former amateur intercollegiate athletes, medical second opinions independent from the institution of higher education. (3) Exception The responsibilities under paragraphs (1) and (2) shall not apply to an institution of higher education in the case of an amateur intercollegiate athlete who transfers out of the institution of higher education to continue participation in intercollegiate athletics elsewhere. 5. Employment matters Notwithstanding any other provision of Federal or State law, an amateur intercollegiate athlete shall not be considered an employee of an institution of higher education, a conference, or a national amateur athletic association based on the amateur intercollegiate athlete’s participation in amateur intercollegiate athletic events or amateur intercollegiate athletic competitions. 6. Transparency (a) Disclosures (1) In general An institution of higher education shall make the following legally binding disclosures to each amateur intercollegiate athlete before he or she commits to enroll in or attend the institution of higher education: (A) The amount and duration of grant-in-aid the institution of higher education will provide to the amateur intercollegiate athlete, relative to the most recent cost of attendance, for each academic school year and each summer session. (B) The amount and duration of grant-in-aid the institution of higher education will provide to assist the amateur intercollegiate athlete with undergraduate degree completion and graduate degree completion following the expiration of the intercollegiate athletics eligibility of the amateur intercollegiate athlete. (C) The percentage of comprehensive medical coverage required, including any required coverage to participate in intercollegiate athletics or to enroll as a student, that will be paid by the institution of higher education during the period of intercollegiate athletics eligibility of the amateur intercollegiate athlete. (D) The percentage of any out-of-pocket sports-related medical expenses including deductibles, copays, and coinsurance, that the institution of higher education will pay during the period of intercollegiate athletics eligibility of the amateur intercollegiate athlete, and the period for which such expenses will be covered after such eligibility expires. Differences between in-network and out-of-network expenses shall be stated. (E) Whether or not the institution of higher education will pay for a disability insurance policy to cover the maximum available future loss of earnings benefit based on market rates of similarly situated amateur intercollegiate athletes. (2) Rule of construction Nothing in this subsection shall be construed to require an institution of higher education to provide a benefit described in any of subparagraphs (A) through (E) of paragraph (1) unless otherwise required by this Act. (b) Funding transparency Section 485(e)(1) of the Higher Education Act of 1965 ( 20 U.S.C. 1092(e)(1) (1) in subparagraph (E), by striking and (2) in subparagraph (F), by striking the period and inserting a semicolon; and (3) by adding at the end of the following: (G) the total compensation of— (i) the athletic director of the institutions; (ii) each head coach and each assistant coach of the institution, by sport; (H) the amount of Federal funds received by the institution of higher education; and (I) the amount of State funds received by the institution of higher education. . 7. Institution requirements for Federal student loan program Section 487(a) of the Higher Education Act of 1965 ( 20 U.S.C. 1094(a) (30) (A) The institution will— (i) comply with the requirements of sections 3, 4, 5, and 6 of the Amateur Athletes Protection and Compensation Act of 2021 (ii) refrain from providing (or affecting or influencing any third party to provide)— (I) any covered compensation to any amateur intercollegiate athlete; or (II) any financial aid, participation benefit, licensing revenue, or other benefit or payment to an amateur intercollegiate athlete for use of the athlete's name, image, or likeness. (B) In this paragraph, the terms amateur intercollegiate athlete covered compensation image likeness name third party Amateur Athletes Protection and Compensation Act of 2021 . 8. Establishment of the Amateur Intercollegiate Athletics Corporation (a) Establishment There is established a government corporation, to be known as the Amateur Intercollegiate Athletics Corporation (b) Purposes The purposes of the AIAC are as follows: (1) To serve as a clearinghouse for best practices with respect to the rights and protections of amateur intercollegiate athletes who enter into agency contracts and endorsement contracts, including by providing guidance to amateur intercollegiate athletes concerning such contracts. (2) To establish rules to enforce this Act and impose fines, penalties, and sanctions on amateur athlete representatives, institutions of higher education, conferences, and national amateur athletic associations that violate such rules. (3) To coordinate with the Federal Trade Commission to promulgate, administer, and enforce standards for reviewing and certifying endorsement contracts entered into by amateur intercollegiate athletes, including competency and ethical standards, that apply to— (A) national amateur athletic associations; (B) conferences; (C) amateur intercollegiate athletes; (D) institutions of higher education; and (E) amateur athlete representatives. (4) To establish a formal certification process for amateur athlete representatives by which the AIAC shall— (A) determine the eligibility of an individual to serve as an amateur athlete representative; (B) periodically verify an amateur athlete representative's continued eligibility and compliance with this Act and the best practices, rules, and competency and ethical standards established under this subsection; and (C) in the case of noncompliance with this Act or any such best practice, rule, or competency or ethical standard, revoke a certification issued in accordance with this paragraph. (5) To provide recommendations to institutions of higher education, national amateur athletic associations, and conferences on protecting amateur intercollegiate athletes from unscrupulous amateur athlete representatives. (6) To investigate disputes with respect to agency contracts and endorsement contracts entered into by amateur intercollegiate athletes, including— (A) verifying that amateur athlete representatives involved in the endorsement contract process have acted in the best interests of amateur intercollegiate athletes; and (B) monitoring compliance with, and making determinations and findings concerning violations of, this Act. (7) To provide to amateur intercollegiate athletes a process for the swift resolution of conflicts concerning agency contracts and endorsement contracts, including by providing a neutral arbitrator for any case in which an amateur intercollegiate athlete is the complaining party. (8) To ensure institutions of higher education and covered athletic organizations are complying with agency contract and endorsement contract rules set forth by the AIAC in accordance with this section. (c) Membership (1) Eligibility Eligibility for membership in the AIAC shall be as provided in the constitution and bylaws of the AIAC. (2) Required provisions for representation In its constitution and bylaws, the AIAC shall establish and maintain provisions with respect to its governance and the conduct of its affairs for the reasonable representation of— (A) amateur intercollegiate athletes; (B) administrators of institutions of higher education, including directors of athletics; (C) administrators of national amateur athletic associations; (D) athletic conference administrators; (E) professionals with expertise in sports marketing, contracting, and public relations; and (F) individuals unaffiliated with any national amateur athletic association who, in the judgment of the board of directors of the AIAC, represent the interest of providing oversight of the activities of the AIAC. (d) Board of directors (1) In general The AIAC shall be governed by a board of directors comprised of 15 voting members. (2) Representation (A) In general Not less than 1⁄3 (B) Current amateur intercollegiate athletes Not less than 20 percent of the membership of the board of directors of the AIAC shall be composed of amateur intercollegiate athletes who are— (i) enrolled in a 4-year degree-granting institution of higher education; and (ii) actively engaged in amateur intercollegiate athletic events. (e) Powers (1) Constitution and bylaws The AIAC shall adopt a constitution and bylaws. (2) General corporate powers The AIAC may— (A) establish and maintain offices to conduct the affairs of the AIAC; (B) enter into contracts; (C) accept gifts, legacies, and devises in furtherance of its corporate purposes; (D) acquire, own, lease, encumber, and transfer property as necessary to carry out the purposes of the AIAC; (E) borrow money, issue instruments of indebtedness, and secure its obligations by granting security interests in its property; (F) publish a magazine, newsletter, and other publications consistent with its corporate purposes; (G) approve and revoke membership in the AIAC; and (H) conduct any other activity necessary and proper to carry out the purposes of the AIAC. (3) Subpoena power The AIAC shall have subpoena power and shall adopt rules that will result in the AIAC, in response to appropriate requests, issuing subpoenas duces tecum and ad testificandum and compelling deposition testimony at the request of a national amateur athletic association. (f) Restrictions (1) Profit and stock The AIAC may not engage in business for profit or issue stock. (2) Political activities The AIAC shall be nonpolitical and may not promote the candidacy of an individual seeking public office. (g) Headquarters, principal office, and meetings The AIAC shall maintain its principal office and national headquarters in a location in the United States decided by the AIAC. The AIAC may hold its annual and special meetings in the places decided by the AIAC. (h) Service of process As a condition to the exercise of any power or privilege granted by this chapter, the AIAC shall have a designated agent to receive service of process for the AIAC. Notice to or service on the agent, or mailed to the business address of the agent, is notice to or service on the AIAC. (i) Report Not less frequently than annually, the AIAC shall submit to the Committee on Commerce, Transportation, and Science of the Senate and the Committee on Energy and Commerce of the House of Representatives a report that includes— (1) the number of disputes investigated by the AIAC in the preceding year pursuant to subsection (b)(6); (2) the number of such disputes filed in the preceding year; and (3) any recommendations to improve the endorsement contract process. 9. Enforcement (a) Unfair or deceptive act or practice A violation of this Act shall be treated as a violation of a rule defining an unfair or deceptive act or practice prescribed under section 18(a)(1)(B) of the Federal Trade Commission Act ( 15 U.S.C. 57a(a)(1)(B) (b) Actions by the Commission The Federal Trade Commission shall enforce this Act in the same manner, by the same means, and with the same jurisdiction, powers, and duties as though all applicable terms and provisions of the Federal Trade Commission Act ( 15 U.S.C. 41 10. Role of national amateur athletic associations A national amateur athletic association may establish rules, consistent with this Act and the rules developed under section 8(b)(2), and enforce such rules by— (1) declaring ineligible for amateur intercollegiate athlete competition an amateur intercollegiate athlete who receives payments in violation of such rules; and (2) withholding 1 or more revenue distributions from an institution of higher education that makes payments in violation of such rules. 11. Reporting (a) Biennial report Not later than 180 days after the date of enactment of this Act, and biennially thereafter, the head of each national amateur athletic association shall submit to the Committee on Commerce, Science, and Transportation of the Senate Committee on Energy and Commerce of the House of Representatives (1) a summary of the systemic issues faced by the national amateur athletic association relating to compliance with this Act; (2) a summary of the trends that are developing among national amateur athletic associations, conferences, and institutions of higher education in response to the prohibitions under this Act; and (3) recommendations for improvements to intercollegiate athletics that would improve the health, safety, and educational opportunities of amateur intercollegiate athletes. (b) Investigation and report Not later than 5 years after the date of enactment of this Act and once every 5 years thereafter, the Comptroller General of the United States shall— (1) conduct an investigation to assess compliance with this Act; and (2) submit to Congress a report that includes— (A) a summary of the investigation conducted under paragraph (1); and (B) recommendations for improvements to intercollegiate athletics that would improve the health, safety, and educational opportunities of amateur intercollegiate athletes. 12. Limitation of liability A national amateur athletic association, a conference, or an institution of higher education that complies with the requirements under this Act shall not be subject to liability, based on action taken by the national amateur athletic association, conference, or institution of higher education before the date of enactment of this Act, under— (1) any Federal or State statute relating to trade or competition; or (2) any Federal or State statute relating to tortious interference based on concepts of unfair competition. 13. Preemption No State or political subdivision of a State may establish or continue in effect any law or regulation that governs or regulates the compensation, intellectual property rights, endorsement contracts, employment status, or eligibility for an amateur intercollegiate athletic competition of any amateur intercollegiate athlete, including any provision that governs or regulates the commercial use of the name, image, or likeness of an amateur intercollegiate athlete.

Summary: Amateur Athletes Protection and Compensation Act of 2021 This bill provides standards relating to compensation for the use of the names, images, and likenesses of amateur intercollegiate athletes and protections for these athletes. Specifically, compensation for such an athlete may only be provided by unaffiliated third parties. Currently the National Collegiate Athletic Association and colleges generally prohibit student athletes from receiving compensation. A national amateur athletic association or institution of higher education may not punish an athlete in an amateur intercollegiate athletic event or competition based on the athlete having entered into an agency contract with an amateur athlete representative certified by the Amateur Intercollegiate Athletics Corporation (AIAC) established by this bill. An amateur intercollegiate athletics association shall allow an amateur intercollegiate athlete to transfer from one institution of higher education to another at least once without losing or delaying eligibility for intercollegiate athletics if specified conditions are met. The AIAC shall serve as a clearinghouse for best practices with respect to the rights and protections of amateur intercollegiate athletes who enter into agency and endorsement contracts. The bill requires institutions of higher education to provide a certain level of health care coverage for such athletes. Such institutions must make specified legally binding disclosures to each athlete before he or she commits to enroll in or attend the institution. The institution must comply with requirements of this bill in order to participate in certain federal student financial aid programs.