House File 2125 - Introduced HOUSE FILE 2125 BY RINKER and NORDMAN A BILL FOR An Act relating to college athletics by requiring a name, 1 image, and likeness financial literacy course for college 2 athletes, exempting certain net income received by college 3 athletes from the individual income tax, and allowing for 4 deductions from individual and corporate income taxes for 5 contributions made to college athletic collectives, and 6 including retroactive applicability provisions. 7 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 8 TLSB 5257YH (6) 90 jm/jh

H.F. 2125 DIVISION I 1 NET INCOME TAX EXEMPTION AND DEDUCTION —— COLLEGE ATHLETICS 2 Section 1. Section 422.7, Code 2024, is amended by adding 3 the following new subsection: 4 NEW SUBSECTION . 44. a. As used in this subsection: 5 (1) “Collective” means a for-profit or nonprofit entity that 6 pools money to provide benefits to student athletes including 7 facilitating opportunities to build and enhance the personal 8 brand of student athletes enrolled in the school. 9 (2) “Nonprofit” means exempt from federal income taxation 10 pursuant to section 501(c)(3). 11 (3) “Participates” includes a student athlete who elects 12 not to compete for a year against other competitive teams, or 13 who is injured but remains on the competitive intercollegiate 14 athletic program. 15 (4) “School” means a community college as defined in section 16 260C.2, an accredited private institution as defined in section 17 256.183, or an institution of higher education under the 18 control of the state board of regents. 19 (5) “Student athlete” means a student enrolled at a 20 school and who participates in an organized competitive 21 intercollegiate athletic program at the school. 22 b. Subtract, to the extent included, net income received by 23 a student athlete from a collective. 24 c. Subtract the amount of contributions, not to exceed 25 twenty thousand dollars, made to a nonprofit collective during 26 the tax year for the purpose of providing benefits to student 27 athletes. 28 Sec. 2. Section 422.35, Code 2024, is amended by adding the 29 following new subsection: 30 NEW SUBSECTION . 14. a. Subtract the amount of 31 contributions, not to exceed forty thousand dollars, made to a 32 collective during the tax year for the purpose of providing a 33 benefit to a student athlete. 34 b. For purposes of this subsection: 35 -1- LSB 5257YH (6) 90 jm/jh 1/ 4

H.F. 2125 (1) “Collective” means a nonprofit entity that pools money 1 to provide benefits to student athletes including facilitating 2 opportunities to build and enhance the personal brand of 3 student athletes enrolled in the school. 4 (2) “Nonprofit” means exempt from federal income taxation 5 pursuant to section 501(c)(3). 6 (3) “Participates” includes a student athlete who elects 7 not to compete for a year against other competitive teams, or 8 who is injured but remains on the competitive intercollegiate 9 athletic program. 10 (4) “School” means a community college as defined in section 11 260C.2, an accredited private institution as defined in section 12 256.183, or an institution of higher education under control 13 of the state board of regents. 14 (5) “Student” means a student enrolled at a school who 15 participates in an organized competitive intercollegiate 16 athletic program at the school. 17 Sec. 3. RETROACTIVE APPLICABILITY. This division of this 18 Act applies retroactively to January 1, 2024, for tax years 19 beginning on or after that date. 20 DIVISION II 21 FINANCIAL LITERACY COURSE 22 Sec. 4. Section 256.183, subsection 1, unnumbered paragraph 23 1, Code 2024, is amended to read as follows: 24 “Accredited private institution” means an institution of 25 higher learning located in Iowa which is operated privately 26 and not controlled or administered by any state agency or 27 any subdivision of the state and which meets the criteria in 28 paragraphs “a” and “b” and all of the criteria in paragraphs “d” 29 through “i” “j” , except that institutions defined in paragraph 30 “c” of this subsection are exempt from the requirements of 31 paragraphs “a” and “b” : 32 Sec. 5. Section 256.183, subsection 1, Code 2024, is amended 33 by adding the following new paragraph: 34 NEW PARAGRAPH . j. Adopts a policy requiring student 35 -2- LSB 5257YH (6) 90 jm/jh 2/ 4

H.F. 2125 athletes as defined in section 422.7, subsection 44, to enroll 1 and complete a name, image, and likeness financial literacy 2 course in the first and fifth semesters of enrollment. 3 Sec. 6. Section 260C.14, Code 2024, is amended by adding the 4 following new subsection: 5 NEW SUBSECTION . 25. Establish a policy requiring student 6 athletes as defined in section 422.7, subsection 44, to enroll 7 and complete a name, image, and likeness financial literacy 8 course in the first and fourth semesters of enrollment. 9 Sec. 7. Section 262.9, Code 2024, is amended by adding the 10 following new subsection: 11 NEW SUBSECTION . 39. Direct the institutions of higher 12 education under its control to adopt a policy requiring student 13 athletes as defined in section 422.7, subsection 44, to enroll 14 and complete a name, image, and likeness financial literacy 15 course in the first and fifth semesters of enrollment. 16 EXPLANATION 17 The inclusion of this explanation does not constitute agreement with 18 the explanation’s substance by the members of the general assembly. 19 This bill relates to college athletics by requiring a 20 financial literacy course for college athletes, exempting 21 certain net income received by a college athlete from the 22 individual income tax, and allowing for deductions from 23 individual and corporate income taxes for contributions to a 24 collective. 25 DIVISION I —— NET INCOME TAX EXEMPTION AND DEDUCTION —— 26 COLLEGE ATHLETICS. The bill exempts from the individual income 27 tax net income received by a student athlete from a collective. 28 The bill allows a deduction from the individual income tax 29 the amount of a contribution, not to exceed $20,000, made to 30 a nonprofit collective during the tax year for the purpose of 31 providing a benefit to a student athlete. The bill allows a 32 similar deduction from the corporate income tax not to exceed 33 $40,000. 34 The bill defines “collective” to mean a for-profit or 35 -3- LSB 5257YH (6) 90 jm/jh 3/ 4

H.F. 2125 nonprofit entity that pools money to provide benefits to 1 student athletes including facilitating opportunities to build 2 and enhance the personal brand of the student athlete enrolled 3 in the school. 4 The bill defines “school” to mean a community college, 5 an accredited private institution as defined in Code section 6 256.183, or an institution of higher education under the 7 control of the state board of regents. 8 The bill defines “student athlete” to mean a student 9 enrolled at a school who participates in an organized 10 competitive intercollegiate athletic program at the school. 11 The bill also defines “participates” to include a student who 12 elects not to compete for a year against other competitive 13 teams, or who is injured but remains on the competitive 14 intercollegiate athletic program. 15 The division applies retroactively to tax years beginning on 16 or after January 1, 2024. 17 DIVISION II —— NAME, IMAGE, AND LIKENESS FINANCIAL LITERACY 18 COURSE —— COLLEGE ATHLETE. The bill requires a student as 19 defined in the bill to enroll and complete two name, image, 20 and likeness financial literacy courses during the enrollment 21 period at a community college, accredited private institution, 22 or institution of higher education under the control of the 23 state board of regents. 24 -4- LSB 5257YH (6) 90 jm/jh 4/ 4