Collegiate Athlete Compensation Rights Act

Bill: 116-s-5003
Sponsor: full_name: Sen. Wicker, Roger F. [R-MS]
Introduced: 2020-12-10
Policy area: Sports and Recreation
Subjects: Administrative law and regulatory procedures

Administrative remedies

Athletes

Contracts and agency

Employment discrimination and employee rights

Federal Trade Commission (FTC)

Higher education

Internet and video services

Internet, web applications, social media

Licensing and registrations

Marketing and advertising

Photography and imaging

Social work, volunteer service, charitable organizations

Student aid and college costs

Wages and earnings

Worker safety and health
Latest action: action_date: 2020-12-10
text: Read twice and referred to the Committee on Commerce, Science, and Transportation.

Summaries:
action_date: 2020-12-10
action_desc: Introduced in Senate
text: <p> <b>Collegiate Athlete Compensation Rights Act</b></p> <p>This bill permits student athletes to earn compensation for the use of their name, image, or likeness (NIL) and creates a uniform, national framework for NIL compensation.</p> <p>The bill also (1) prohibits certain activities of institutions, boosters, and third-party licensees relating to athlete classification, scholarships, and contracts; and (2) directs the Federal Trade Commission to oversee all activities and approve all rules issued by a private, independent, and nonprofit entity responsible for developing and administering NIL rules concerning student athletes and specified others.</p>

tv_txt: II 116th CONGRESS 2d Session S. 5003 IN THE SENATE OF THE UNITED STATES December 10, 2020 Mr. Wicker introduced the following bill; which was read twice and referred to the Committee on Commerce, Science, and Transportation A BILL To protect the rights of student athletes, to provide for transparency and accountability with respect to student athlete name, image, and likeness agreements, and to establish an independent entity for intercollegiate athletics, and for other purposes.

1. Short title This Act may be cited as the Collegiate Athlete Compensation Rights Act . 2. Definitions In this Act: (1) Association The term association means any organization that— (A) has as members 2 or more conferences or institutions; and (B) arranges championships and sets rules for varsity intercollegiate sports competition. (2) Booster The term booster means an individual or entity that, in a calendar year, directly or indirectly, through an institution or any other individual or entity or in any other manner— (A) has provided a donation to obtain season tickets for any sport at an institution that exceeds the annual amount determined by the Entity; (B) has made a financial contribution directly to the athletics department or other athletics management organization of an institution in an amount that exceeds the annual amount determined by the Entity; (C) is party to any license agreement for use of the trademarks of an institution in connection with athletics under which the total payments exceed such amount; (D) has made any combination of such donations, contributions, or license payments, or has provided any other form of consideration in connection with an activity described in any of subparagraphs (A) through (C), that, in the aggregate, exceed such amount; (E) has arranged or provided employment for 1 or more student athletes; or (F) has assisted, or been requested by an employee of an institution to assist, in the recruitment of a prospective student athlete. (3) Certification office The term certification office means the office established by the Entity under section 6(e)(2). (4) Certified agent The term certified agent means an athlete agent (as defined in section 2 of the Sports Agent Responsibility and Trust Act ( 15 U.S.C. 7801 ))— (A) who is certified by the certification office as being in full compliance with all requirements established by the certification office; and (B) whose certification has not lapsed, expired, or been revoked. (5) Commission The term Commission means the Federal Trade Commission. (6) Conference The term conference means any organization or association that— (A) has as members 2 or more institutions; and (B) arranges championships and sets rules for varsity intercollegiate sports competition. (7) 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 ); and (B) shall be calculated by the financial aid office of each institution applying the same standards, policies, and procedures for all students, including such amounts paid or provided by the institution for undergraduate and graduate studies at the institution. (8) Covered compensation (A) In general The term covered compensation includes any form of payment or remuneration, including cash, benefits, awards, gifts, in-kind contributions, and any other form of payment or remuneration. (B) Inclusions The term covered compensation includes social media compensation and payments for licensing or use of publicity rights or for other intellectual or intangible property rights under Federal or State law. (C) Exclusions The term covered compensation does not include the payment or provision of the following: (i) Tuition, room, board, books, fees, and personal expenses paid or provided by an institution up to the full cost of attendance. (ii) Federal Pell Grants and other State and Federal grants unrelated to, and not awarded with respect to, participation in varsity intercollegiate sports competition. (iii) Health insurance and the costs of health care wholly or partly self-funded by an association, a conference, or an institution. (iv) Disability and loss of value insurance that is wholly or partly self-funded by an association, a conference, or an institution. (v) Career counseling or job placement services available to all students at an institution. (vi) Payment of hourly wages and benefits for work actually performed (and not for participation in intercollegiate athletics) at a rate commensurate with the prevailing rate in the locality of an institution for similar work. (9) Division The term division means an organization of institutions— (A) the athletics programs of which compete against each other at a similar level of competition; and (B) that is recognized by an association. (10) Enroll With respect to a student athlete, the term enroll means to receive passing grades, as determined by the applicable institution, for completing courses of instruction at such institution comprising not less than 12 percent of the credits required for graduation from the institution. (11) Entity The term Entity means the independent entity for intercollegiate athletics selected by the Commission under section 6(b). (12) Image The term image , with respect to a student athlete, means a picture of the student athlete. (13) Institution The term institution means an institution of higher education (as defined in section 101 of the Higher Education Act of 1965 ( 20 U.S.C. 1001 )) that sponsors varsity intercollegiate sports competition in the United States. (14) Intercollegiate athletics The term intercollegiate athletics means sports played at the collegiate level for which eligibility requirements for participation by student athletes are established by an association for the promotion or regulation of collegiate athletics. (15) Likeness The term likeness , with respect to a student athlete, means a physical or digital depiction or representation of the student athlete. (16) Loss of value insurance The term loss of value insurance means insurance that protects the future contract value of a student athlete from decreasing below a predetermined amount due to significant injury or illness suffered by the student athlete during the designated coverage period of the insurance policy. (17) Name The term name , with respect to a student athlete, means the first or last name, or the nickname, of the student athlete when used in a context that reasonably identifies the student athlete with particularity. (18) Name, image, and likeness agreement The term name, image, and likeness agreement means a contract or similar arrangement between a student athlete and a third-party licensee regarding the commercial use of the name, image, or likeness of the student athlete. (19) Publicity right The term publicity right — (A) means a right that is recognized under a Federal or State law that permits an individual to control and profit from the commercial use of the name, image, or likeness of the individual; and (B) includes any right that is licensed under a name, image, and likeness agreement. (20) Social media compensation The term social media compensation includes all forms of payment for engagement on social media received by a student athlete as a result of the use of the name, image, or likeness of the student athlete. (21) Student athlete The term student athlete means any individual attending an institution who participates as a team member or competitor in varsity intercollegiate sports competition sponsored by the institution. (22) Third-party licensee (A) In general The term third-party licensee means any individual or entity that licenses publicity rights from any current or prospective student athlete or groups of student athletes. (B) Exclusion The term third-party licensee does not include any association, conference, or institution. (23) Varsity intercollegiate sports competition The term varsity intercollegiate sports competition means competition between and among collegiate sports teams that principally represent an institution at the highest level of competition. 3. Protection of student athlete rights (a) In general Except as provided in section 4, an association, a conference, or an institution shall permit a student athlete— (1) to earn covered compensation, commensurate with market value, for the use of the name, image, or likeness of the student athlete while enrolled at an institution; and (2) to obtain and retain a certified agent for any matter or activity relating to such covered compensation. (b) Rescission of agreements In the case of a student athlete who no longer participates in varsity intercollegiate sports competition, the student athlete may rescind a name, image, and likeness agreement 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. (c) Educational resources The Entity shall provide educational resources to student athletes with respect to earning covered compensation for the use of the name, image, or likeness of the student athlete. 4. Prohibitions on certain activities of institutions, boosters, and third-party licensees (a) Restrictions on earning covered compensation (1) In general An association, a conference, or an institution may not adopt or maintain a contract, rule, regulation, standard, or other requirement that prevents or unduly restricts a student athlete from earning covered compensation for the use of the name, image, or likeness of the student athlete. (b) Classification of student athletes Notwithstanding any other provision of Federal or State law, a student athlete shall not be considered an employee of an association, a conference, or an institution based on participation in varsity intercollegiate sports competition. (c) Payment to student athletes or families An institution may not, directly or indirectly, provide covered compensation to a student athlete or a prospective student athlete, or to the family of a student athlete or a prospective student athlete. (d) Scholarships An institution or an association may not revoke or impose a condition on an athletic scholarship of a student athlete based on the student athlete having earned covered compensation or having obtained a certified agent in accordance with this Act. (e) Conflicts with contracts or rules of institution (1) In general Except as provided in paragraph (2), a third-party licensee may not enter into, or offer to enter into, a name, image, and likeness agreement with a student athlete that provides covered compensation if a provision of the name, image, and likeness agreement conflicts with a provision of a contract, rule, regulation, standard, or other requirement of the applicable institution. (2) Exception A third-party licensee may enter into, or offer to enter into, a name, image, and likeness agreement with a student athlete that conflicts with a provision of a contract, rule, regulation, standard, or other requirement of the applicable institution if— (A) the institution consents, in writing, to the name, image, and likeness agreement; or (B) the contract, rule, regulation, standard, or other requirement unduly restricts student athletes from earning covered compensation for the use of the name, image, or likeness of the student athlete. (3) Disclosures (A) Conflicts An institution asserting a conflict described in paragraph (1) shall disclose to the certified agent and the Entity each relevant term of the contract, rule, regulation, standard, or other requirement of the athletic team. (B) Restrictions A certified agent asserting a restriction described in paragraph (2)(B) shall disclose to the Entity the nature of such restriction. (f) Agent activities An individual may not carry out any agent activity or representation of a student athlete with respect to a student athlete name, image, and likeness agreement unless the individual is a certified agent. (g) Prohibited agreements (1) Booster agreements and inducements An association, a conference, or an institution may prohibit a booster from providing covered compensation to, or entering into a name, image, and likeness agreement with, a student athlete or prospective student athlete as an inducement to attend or enroll in or continue attending a specific institution or group of institutions. (2) Other prohibited agreements An association, a conference, or an institution may prohibit a student athlete from entering into a name, image, and likeness agreement with a third-party licensee relating to the name, image, or likeness of the student athlete— (A) before the date on which the student athlete enrolls at an institution; or (B) for the promotion of gambling, tobacco or alcohol products, adult entertainment, or any other product or service that is reasonably considered to be inconsistent with the values of an institution. 5. Transparency and accountability relating to name, image, and likeness agreements and student athlete endorsements (a) Contract with certified agent A certified agent may not enter into a representation agreement with a student athlete before the date on which the student athlete is enrolled. (b) Disclosures relating to receipt of covered compensation Not later than 5 days after the date on which a student athlete receives covered compensation relating to a name, image, and likeness agreement, the certified agent representing the student athlete shall report to the Entity— (1) the receipt and amount of such covered compensation; and (2) the terms and conditions of the agreement, including the name of each party to the agreement. (c) Limitation on duration of endorsement activities To preserve the integrity of the educational programs of institutions, an institution or the Entity may impose reasonable limits on the amount of time a student athlete may spend to carry out endorsement activities relating to a name, image, and likeness agreement. (d) Annual report Not less frequently than annually, the Entity shall make available to the public on the internet website of the Entity, for the preceding 1-year period— (1) the total number of student athletes who have entered into name, image, and likeness agreements; (2) the total number of student athletes eligible to earn covered compensation from third-party licensees as a result of name, image, and likeness agreements; (3) the total amount of covered compensation earned by student athletes, disaggregated by division and by conference; (4) the average amount of covered compensation earned by student athletes; (5) the average amount of covered compensation earned by student athletes, disaggregated by sport; and (6) a detailed description of each name, image, and likeness agreement entered into, including, for each student athlete— (A) the terms and conditions of the name, image, and likeness agreement; (B) the amount of covered compensation; (C) the requirements of the student athlete for receiving such covered compensation; (D) the dates for which the name, image, and likeness agreement is in effect; and (E) any other information the Entity considers relevant. 6. Independent entity for intercollegiate athletics (a) In general The independent entity for intercollegiate athletics shall be a private, independent, self-regulatory, nonprofit corporation. (b) Selection of independent entity (1) In general Subject to paragraph (2), the Commission may select an independent entity that meets the requirements described in this section to carry out the duties described in this section. In selecting the Entity, the Commission shall consider applications from individuals representing or under the jurisdiction of not less than 10 conferences. (2) Special rule If, not later than 180 days after the date of enactment of this Act, the Commission has not selected the Entity in accordance with paragraph (1), the Commission shall— (A) carry out the duties described in subsection (e), except that the Commission may use its existing enforcement procedures rather than those outlined in such subsection; and (B) establish and oversee an advisory committee in accordance with the requirements in the Federal Advisory Committee Act (5 U.S.C. App.), with membership as described in subsection (f)(2), to advise the Commission on the topics described in subsection (f)(1). (c) Board of directors (1) Membership The Entity shall be governed by a board of directors (in this section referred to as the Board ). (2) Representation The Board shall be comprised of 15 voting members who shall include— (A) 3 representatives of student athletes attending an institution; (B) 3 representatives of athletics directors at institutions; (C) 3 representatives of conferences; (D) 3 representatives of institutions of different sizes and geographical locations; and (E) 3 representatives of a variety of intercollegiate athletics teams. (3) Chair The chair of the Board shall be elected by a majority of the Board. (4) Bylaws The Board shall be governed by bylaws for the operation of the Entity with respect to— (A) the administrative structure and employees of the Entity; (B) the establishment of standing committees; (C) the procedures for filling vacancies on the Board and the standing committees; (D) termination of membership; and (E) any other matter the Board considers necessary. (5) Terms (A) In general A member of the Board shall be appointed for a term of 3 years, except that of the members first appointed— (i) 1/3 of the members shall be appointed for 2 years; (ii) 1/3 of the members shall be appointed for 3 years; and (iii) 1/3 of the members shall be appointed for 4 years. (B) Limit A member of the Board may serve for not more than 2 consecutive terms. (d) Quorum For all items for which Board approval is required, the Board shall have present a majority of members. (e) Duties (1) Development of rules (A) In general The Entity shall develop rules and standards— (i) with respect to, and consistent with, the requirements and prohibitions under sections 3 and 4; and (ii) to maintain fairness and integrity in amateur intercollegiate athletics and the principle of amateurism in intercollegiate athletic competition. (B) Name, image, and likeness agreement rules The Entity shall develop rules, consistent with sections 3 and 4, with respect to student athlete name, image, and likeness agreements. (C) Annual limitation on booster contributions The Entity shall develop a rule limiting the annual amount of booster donations, contributions, license payments, and any other form of consideration in connection with an activity described in section 2(2). (D) Approval of Commission The rules and standards developed under this paragraph shall be subject to approval by the Commission in accordance with section 7(d). (2) Establishment of certification office (A) In general The Entity shall establish and maintain a certification office to carry out activities described in subparagraph (B). (B) Activities of certification office (i) Testing program (I) In general The certification office shall develop and administer a testing program for individuals seeking to become certified agents. (II) Elements The testing program shall be designed to ensure that each certified agent— (aa) understands and is equipped to provide competent business advice to student athletes with respect to publicity rights licensing; and (bb) has a reasonable working knowledge of relevant State publicity rights law and applicable tax laws. (III) Frequency of testing The certification office shall conduct testing not less frequently than biennially. (ii) Standards of conduct The certification office shall develop and publish on a publicly available internet website of the Entity standards of conduct and ethics applicable to certified agents. (iii) Certification (I) In general The certification office shall issue certificates to, and publish on a publicly available internet website of the Entity a list of, certified agents. (II) List of individuals not certified The certification office shall publish on a publicly available internet website of the Entity a list of individuals— (aa) who have attempted to obtain certification as certified agents, but have not been so certified; and (bb) whose certification as certified agents has been revoked as a result of an enforcement action or any other action of the Entity. (3) Availability of information Not less frequently than annually, the Entity shall compile and publish on a publicly available internet website of the Entity such extracts of data and information available from name, image, and likeness agreements as the Entity determines to be helpful to student athletes in evaluating certified agents and licensing opportunities for publicity rights. (4) Guidance for student athletes (A) In general The Entity shall develop and publish on a publicly available internet website of the Entity guidance for student athletes that— (i) explains the legal and business concepts to be considered in licensing publicity rights; and (ii) specifically includes information concerning the implications of provisions that restrict a student athlete’s choice of institutions or bind the student athlete to long-term arrangements. (5) Grievance procedures The Entity shall establish procedures for— (A) addressing complaints and concerns from student athletes and institutions with respect to certified agents; and (B) upon a showing that a certified agent has not competently represented the interests of 1 or more student athletes or has failed to comply with applicable standards of conduct and ethics, the revocation of certification of a certified agent. (6) Enforcement (A) In general The Entity shall enforce the rules and standards developed under paragraph (1) by imposing fines, penalties, and sanctions, including revocation of agent certifications, for agents, institutions, conferences, and associations that violate any such rule or standard. (B) Appeals standing committee (i) In general The Entity shall establish an appeals standing committee, to which any individual affected by an enforcement decision of the Entity may appeal such decision. (ii) Membership The appeals standing committee shall be comprised of 7 individuals selected by the nominating committee. (iii) Chair The chair of the appeals standing committee shall be elected by a majority of the appeals standing committee. (iv) Advice to Board After hearing an appeal on a decision of the Entity, the appeals standing committee shall advise the Board on whether to sustain or overrule the decision. (f) Student athlete health and safety standing committee (1) In general The Entity shall establish a student athlete health and safety standing committee, which shall provide advice and guidance to the Board on the development of standards to help prevent serious injury to and abuse of student athletes. (2) Membership The student athlete health and safety standing committee shall be comprised of not more than 7 voting members who shall be selected by the Board not later than 120 days after the date of the enactment of this Act, including individuals with experience relating to sports medicine. (3) Chair The chair of the student athlete health and safety standing committee shall be elected by a majority of the student athlete health and safety standing committee. (g) Nominating committee (1) In general The Entity shall establish a nominating committee. (2) Membership The nominating committee shall be comprised of 7 members selected from institutions, conferences, and divisions, except that the initial nominating committee members shall be set forth in the bylaws of the Entity. (3) Chair The majority of the nominating committee shall elect the chair of the nominating committee. (4) Duties The nominating committee shall— (A) be responsible for appointing members to the Board in the event of a vacancy; (B) appoint members to each standing committee established under this section; and (C) appoint members to any other committee established by the Entity. (h) Additional committees The Entity may establish any additional committee the Board considers necessary. (i) Conflicts of interest To avoid conflicts of interest, the following individuals may not be selected as a member of the Board or as a member of a standing committee or the nominating committee established under this section: (1) A booster. (2) A certified agent. (3) A third-party licensee. 7. Enforcement and review by the Federal Trade Commission (a) In general A violation of this Act or any rule approved pursuant to subsection (d) 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) Enforcement authority (1) In general The Commission shall enforce this Act and any rule approved pursuant to subsection (d) 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 et seq.) were incorporated into and made a part of this Act. (2) Nonprofit organizations Notwithstanding section 4 of the Federal Trade Commission Act ( 15 U.S.C. 44 ) or any jurisdictional limitation of the Commission, the Commission shall also enforce this Act and any rule approved pursuant to subsection (d) in the same manner provided in paragraph (1), with respect to organizations not organized to carry on business for their own profit or that of their members. (3) Penalties; privileges and immunities Any person who violates this Act or any rule approved pursuant to subsection (d) shall be subject to the penalties and entitled to the privileges and immunities provided in the Federal Trade Commission Act ( 15 U.S.C. 41 et seq.). (4) Intervention The Commission shall have the right to intervene in any action brought by the Entity with respect to any violation of this Act or any rule approved pursuant to subsection (d). (5) Actions by the Federal Trade Commission In any case in which an action is instituted by or on behalf of the Commission for any violation of this Act or any rule approved pursuant to subsection (d), the Entity may not, during the pendency of that action, institute an action under this Act against any defendant named in the complaint in that action for violation of such Act or rule. (c) Appeals In accordance with such rules as the Commission may prescribe, any person subject to a final decision by the Board under section 6(e)(6) may obtain review by the Commission of such decision. (d) Review of proposed rules (1) In general The Entity shall file with the Commission, in accordance with such rules as the Commission may prescribe, copies of any proposed rule or modification to any rule developed by the Entity under section 6(e)(1) (in this subsection referred to as a proposed rule ). (2) Publication The Commission shall publish a proposed rule filed under paragraph (1) and provide interested persons an opportunity to comment. (3) Timeline Not later than 45 days after a proposed rule is published under paragraph (2), the Commission shall approve or disapprove the proposed rule. (4) Approval The Commission shall approve a proposed rule if the Commission finds that the proposed rule is consistent with the requirements and purposes of this Act. (5) Prohibition A proposed rule shall not take effect unless such rule has been approved by the Commission. 8. Role of associations and conferences Associations and conferences may— (1) establish rules, consistent with this Act and the rules and standards developed in accordance with section 6(e)(1); and (2) enforce such rules by— (A) declaring ineligible for competition a student athlete who receives payments in violation of this Act or any such rule or standard; and (B) withholding 1 or more revenue distributions from an institution that makes payments in violation of this Act or any such rule or standard. 9. Limitation of liability An institution, a conference, or an association that complies with the requirements under this Act shall not be subject to liability, based on action taken by the institution, conference, or association before the date of the 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. 10. Relationship to State laws No State or political subdivision of a State may establish or continue in effect any law, regulation, rule, requirement, or standard that governs or regulates the compensation, publicity rights, employment status, or eligibility for competition of a student athlete, including any provision that governs or regulates the commercial use of the name, image, or likeness of a student athlete. 11. Authorization of appropriations There is authorized to be appropriated to the Commission such sums as are necessary to carry out this Act.