HF 628 (LSB 2365YH (2) 91)

HOUSE FILE 628

BY  WOOD

A BILL FOR

An Act relating to compensation and name, image, and likeness rights of student athletes at postsecondary educational institutions, providing remedies, and including applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  NEW SECTION.  261K.1  Definitions.
   As used in this chapter, unless the context otherwise requires:
   1.  “Institutional marketing associate” means any third-party entity that enters into an agreement with a postsecondary educational institution or its intercollegiate athletics program to market or promote the postsecondary educational institution or its intercollegiate athletics program, or to otherwise act on behalf of the postsecondary educational institution or the postsecondary educational institution’s intercollegiate athletics program. “Institutional marketing associate” does not include a regulatory body, postsecondary educational institution, postsecondary educational institution staff member, or their respective officers, directors, managers, owners, or employees.
   2.  “Postsecondary educational institution” means an institution of higher education governed by the state board of regents, a community college, or a private postsecondary educational institution in this state.
   3.  “Student athlete” means an individual who is eligible to participate in, participates in, or has participated in an intercollegiate sport for a postsecondary educational institution. “Student athlete” does not include an individual who is eligible to participate in, participates in, or has participated in a college intramural sport or in a professional sport outside of intercollegiate athletics.
   4.  “Third party” means any individual or entity, including any athlete agent, other than a postsecondary educational institution, athletic conference, or athletic association.
   5.  “Unique identifier” means any of the following developed or adopted for marketing or promotional purposes by a postsecondary educational institution or a third party:
   a.  A seal.
   b.  A logo.
   c.  An emblem.
   d.  A motto.
   e.  A special symbol.
   f.  Institutional colors.
   g.  A modifier or descriptor.
   h.  A design.
   i.  A patentable or copyrightable item, material, or information.
   j.  Any other item, material, or information that identifies and is recognizable as unique to such postsecondary educational institution or third party.
    Sec. 2.  NEW SECTION.  261K.2  Compensation of student athletes —— professional representation.
   1.  a.  (1)  A postsecondary educational institution shall not enforce any rule, requirement, standard, or other limitation of an athletic association or athletic conference that prevents a student athlete of that institution from fully participating in intercollegiate athletics without penalty or from earning compensation as a result of the use of the student athlete’s name, image, likeness rights, or athletic reputation.
   (2)  A student athlete’s financial aid eligibility, amount, duration, or renewal, or any other benefit for which the student athlete is otherwise eligible, shall not be affected by the student athlete earning compensation from the use of the student athlete’s name, image, or likeness rights, or athletic reputation.
   b.  (1)  A postsecondary educational institution shall not interfere with or prevent a student athlete from fully participating in intercollegiate athletics or obtaining professional representation without penalty in relation to contracts or legal matters relating to earning compensation as a result of the use of the student athlete’s name, image, likeness rights, or athletic reputation, including but not limited to representation provided by athlete agents or financial advisors or legal representation provided by attorneys.
   (2)  Representation by athlete agents or financial advisors or legal representation provided by attorneys shall be provided by individuals licensed in this state. Any professional representation agreement must be in writing, be executed by both parties, clearly describe the obligations of the parties, and outline fees for the professional representation.
    Sec. 3.  NEW SECTION.  261K.3  Financial aid.
   For purposes of this chapter, financial aid from a postsecondary educational institution in which a student athlete is enrolled shall not be considered compensation for use of the athlete’s name, image, and likeness rights, or athletic reputation.
    Sec. 4.  NEW SECTION.  261K.4  Limitations on certain contracts.
   1.  A student athlete shall not enter into an apparel, equipment, or beverage contract providing compensation to the athlete for use of the student athlete’s name, image, likeness rights, or athletic reputation if the contract requires the student athlete to display a sponsor’s apparel, equipment, or beverage or otherwise advertise for the sponsor during official team activities if such provisions are in conflict with a provision of the postsecondary educational institution’s current licenses or contracts.
   2.  A student athlete shall not enter into a contract for compensation for the use of the student athlete’s name, image, likeness rights, or athletic reputation if a postsecondary educational institution determines that a term of the contract conflicts with a term of a contract to which the institution is a party. A postsecondary educational institution may authorize an exception to this subsection in writing.
    Sec. 5.  NEW SECTION.  261K.5  Assistance by postsecondary educational institutions.
   A postsecondary educational institution or any officer, director, or employee of such institution, including but not limited to a coach, member of the coaching staff, or any individual associated with the institution’s athletic department, may identify, create, facilitate, negotiate, support, enable, or otherwise assist with opportunities for a student athlete to earn compensation from a third party, including an institutional marketing associate, for the use of the student athlete’s name, image, likeness rights, or athletic reputation, provided that a postsecondary educational institution or individual shall not do any of the following:
   1.  Receive compensation from the student athlete or a third party for facilitating, enabling, or assisting with such opportunities.
   2.  Attempt to influence a student athlete’s choice of professional representation related to such opportunities.
   3.  Attempt to reduce a student athlete’s opportunities from competing third parties.
    Sec. 6.  NEW SECTION.  261K.6  Disclosure of contracts.
   Before any contract for compensation for the use of a student athlete’s name, image, likeness rights, or athletic reputation, or for professional representation, is executed, and before any compensation is provided to the student athlete in advance of a contract, the student athlete shall disclose the contract to the student athlete’s postsecondary educational institution in a manner prescribed by the institution.
    Sec. 7.  NEW SECTION.  261K.7  Limitation on compensation by institutions.
   A postsecondary educational institution or any officer, director, or employee of such institution shall not compensate a student athlete, prospective student athlete, or the family thereof for the use of the student athlete or prospective student athlete’s name, image, likeness rights, or athletic reputation, unless otherwise permitted by institutional policy and a collegiate athletics association of which the institution is a member.
    Sec. 8.  NEW SECTION.  261K.8  Unique identifiers.
   1.  A postsecondary educational institution or a third party shall develop and adopt a process for granting to a student athlete, or to a third party for use with a student athlete, a license to use such institution’s or third party’s unique identifiers when earning or attempting to earn compensation from the use of the student athlete’s name, image, likeness rights, or athletic reputation consistent with the institution’s or third party’s policies regarding licensing of its unique identifiers.
   2.  A postsecondary educational institution or a third party may charge a reasonable fee for a license to use a unique identifier under this section.
   3.  A postsecondary educational institution or a third party may impose requirements that a student athlete granted a license under this section refrain from using such unique identifier in a manner that the institution or third party in its sole discretion determines does any of the following:
   a.  Is reasonably considered to be inconsistent with the institution’s or third party’s values or mission.
   b.  Adversely affects the institution’s or third party’s image.
   c.  Negatively impacts or inappropriately reflects upon the reputation or religious, moral, or ethical standards of the institution or third party.
   d.  Violates the institution’s or third party’s code of conduct or similar requirements.
   e.  Conflicts with a provision of the institution’s or third party’s current licenses or contracts.
    Sec. 9.  NEW SECTION.  261K.9  Compensation outside of official, mandatory team activities.
   The terms of a contract of a postsecondary educational institution’s athletic program shall not prevent a student athlete from receiving compensation for using the student athlete’s name, image, likeness rights, or athletic reputation for a commercial purpose when the student athlete is not engaged in official mandatory team activities that are recorded in writing and can be made publicly available upon request.
    Sec. 10.  NEW SECTION.  261K.10  Confidentiality of contracts.
   1.  The terms of a contract or proposed contract detailing compensation to a student athlete at a public postsecondary educational institution for the use of the student athlete’s name, image, likeness rights, or athletic reputation shall be considered confidential records under section 22.7 and shall not be available for examination by the public pursuant to section 22.2.
   2.  If a private postsecondary educational institution collects, retains, or maintains the terms of a student athlete’s contract or proposed contract detailing compensation to the student athlete for the use of the student athlete’s name, image, likeness rights, or athletic reputation, the postsecondary educational institution shall consider such contract terms to be student governed by the federal Family Education Rights and Privacy Act.
    Sec. 11.  NEW SECTION.  261K.11  Conditions on compensation.
   Compensation to a student athlete for earning or attempting to earn compensation from the use of such student athlete’s name, image, likeness rights, or athletic reputation shall not be conditioned on such student athlete’s athletic performance. Persons providing compensation to a student athlete for the use of the student athlete’s name, image, likeness rights, or athletic reputation shall have the right to condition payment of that compensation on a student athlete’s attendance at a particular postsecondary educational institution.
    Sec. 12.  NEW SECTION.  261K.12  Compensation by nonprofit organizations.
   A nonprofit entity that is exempt from federal income taxation pursuant to section 501(c)(3) of the Internal Revenue Code shall have the right to compensate a student athlete for the commercial use of the student athlete’s name, image, likeness rights, or athletic reputation.
    Sec. 13.  NEW SECTION.  261K.13  Institutional marketing associates.
   1.  Notwithstanding any rule of an athletic association, athletic conference, or any other organization with authority over varsity intercollegiate athletics, institutional marketing associates shall have the right to compensate a student athlete for the commercial use of the student athlete’s name, image, likeness rights, or athletic reputation. This includes the right to compensate a student athlete for the commercial use of the student athlete’s name, image, or likeness rights in connection with the promotion of athletic events in which the student athlete will or may participate, the promotion of the postsecondary educational institution the student athlete attends, and the promotion of the postsecondary educational institution’s intercollegiate athletics program. Additionally, an institutional marketing associate shall, in the event that a postsecondary educational institution or its intercollegiate athletics program affirmatively grants a request therefor, have the right to utilize content creation and marketing capabilities of a postsecondary educational institution or the postsecondary educational institution’s intercollegiate athletics program in connection with services provided for the promotion of athletic events in which a student athlete will or may participate, the postsecondary educational institution, or the institution’s intercollegiate athletics program.
   2.  Notwithstanding any rule of an athletic association, athletic conference, or any other organization with authority over varsity intercollegiate athletics, a student athlete shall have the right to receive compensation from an institutional marketing associate for the commercial use of the student athlete’s name, image, likeness rights, or athletic reputation, in connection with the promotion of athletic events in which the student athlete will or may participate, the promotion of the postsecondary educational institution the student athlete attends, and the promotion of the postsecondary educational institution’s intercollegiate athletics program, or other matters.
    Sec. 14.  NEW SECTION.  261K.14  Educational workshops.
   A postsecondary educational institution that enters into commercial agreements that directly or indirectly require the use of a student athlete’s name, image, likeness rights, or athletic reputation shall offer at least two educational workshops per calendar year that may include topics such as financial literacy, life skills, time management, and entrepreneurship. The educational workshops shall not be offered in the same month and each workshop offered in a calendar year shall be unique and not a repetition of the other workshop offered that year. A postsecondary educational institution shall notify all student athletes of the educational workshops through the distribution of informational materials via electronic mail or other communication methods the institution regularly uses to communicate with student athletes. The educational workshops shall not include any marketing, advertising, referral, or solicitation by providers of financial products or services.
    Sec. 15.  NEW SECTION.  261K.15  Athletic associations, conferences, or organizations —— prohibited activities.
   An athletic association, athletic conference, or any other organization with authority over varsity intercollegiate athletics shall not do any of the following or authorize its member institutions to do so:
   1.  Prevent a student athlete from receiving compensation for the commercial use of the student athlete’s name, image, likeness rights, or athletic reputation under this chapter or penalize a student athlete for doing so.
   2.  Prevent a postsecondary educational institution from participating in varsity intercollegiate athletics or otherwise penalize a postsecondary educational institution as a result of a student athlete’s receipt of compensation for the student athlete’s name, image, likeness rights, or athletic reputation under this chapter.
   3.  Prevent a postsecondary educational institution from establishing agreements with a third-party entity to act on its behalf to identify, facilitate, enable, or support student athlete name, image, and likeness activities.
   4.  Accept a complaint, open an investigation, or take any other adverse action against a postsecondary educational institution or any of its employees for engaging in any activity permitted under this chapter.
   5.  Penalize a postsecondary educational institution because an institutional marketing associate compensates a student athlete for use of the student athlete’s name, image, likeness rights, or athletic reputation, as permitted under this chapter, or if a third party violates the collegiate athletic association’s rules or regulations with regard to student athlete name, image, or likeness activities.
    Sec. 16.  NEW SECTION.  261K.16  Civil action —— remedies.
   1.  A student athlete may bring a civil action against third parties that violate this chapter or that interfere with the student athlete’s earning or attempting to earn compensation from the use of such student athlete’s name, image, likeness rights, or athletic reputation for injunctive relief and actual damages. The court shall award court costs and reasonable attorney fees to a prevailing student athlete.
   2.  A student athlete bringing an action under this chapter shall not be deprived of any protections provided under law with respect to a controversy that arises and shall have the right to adjudicate claims that arise under this chapter.
    Sec. 17.  NEW SECTION.  261K.17  Applicability to high school students.
   1.  A high school student who competes on an interscholastic athletic team in this state that is sponsored by a public school or by a private school whose students compete against a public school’s students may earn or attempt to earn compensation from the use of the student’s name, image, likeness rights, or athletic reputation as though the student were a student athlete as provided in this chapter, subject to the following:
   a.  A high school student shall have the right to discuss earning or attempting to earn such compensation before signing an athletic letter of intent or other written agreement only when having discussions about potential enrollment with a postsecondary educational institution.
   b.  A high school student shall have the right to earn or attempt to earn such compensation only after signing an athletic letter of intent or other written agreement to enroll in a postsecondary educational institution.
   2.  The discussion of, or earning or attempting to earn, compensation from the use of a high school student’s name, image, likeness rights, or athletic reputation as provided in this chapter shall not be construed to be a violation of any rule and regulation a high school student and high schools are required to follow to maintain and protect a high school student’s eligibility to participate in high school athletics in this state.
    Sec. 18.  NEW SECTION.  261K.18  Limitation of liability and legal settlements.
   1.  A postsecondary educational institution’s employees, including athletics coaching staff, shall not be liable for any damages to a student athlete’s ability to earn compensation for the use of the student athlete’s name, image, or likeness resulting from decisions or actions routinely taken in the course of intercollegiate athletics.
   2.  A legal settlement shall not permit noncompliance with this chapter. Any such provision is void and unenforceable.
    Sec. 19.  NEW SECTION.  261K.19  Construction.
   1.  This chapter shall not be construed to qualify a student athlete as an employee of a postsecondary educational institution.
   2.  This chapter does not affect the rights of student athletes under Tit. IX of the Education Amendments of 1972, 20 U.S.C. §1681 et seq.
    Sec. 20.  APPLICABILITY.  This Act applies to agreements or contracts entered into, modified, or renewed on or after the effective date of this Act. Such agreements or contracts include but are not limited to the national letter of intent, an athlete’s financial aid agreement, commercial contracts in the athlete group licensing market, and athletic conference or athletic association rules or bylaws.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill relates to compensation and name, image, and likeness rights of student athletes at postsecondary educational institutions. The bill defines a “postsecondary educational institution” as an institution of higher education governed by the state board of regents, a community college, or a private postsecondary educational institution in this state.
   The bill prohibits a postsecondary educational institution from enforcing any rule, requirement, standard, or other limitation of an athletic association or athletic conference that prevents a student athlete of that institution from fully participating in intercollegiate athletics without penalty or from earning compensation as a result of the use of the student athlete’s name, image, likeness rights, or athletic reputation. The bill provides that a student athlete’s financial aid eligibility shall not be affected by the student athlete earning compensation from the use of the student athlete’s name, image, or likeness rights, or athletic reputation.
   The bill prohibits a postsecondary educational institution from interfering with or preventing a student athlete from fully participating in intercollegiate athletics or obtaining professional representation without penalty in relation to contracts or legal matters relating to earning compensation as a result of the use of the student athlete’s name, image, likeness rights, or athletic reputation. The bill provides requirements for such professional representation.
   The bill provides that financial aid from a postsecondary educational institution in which a student athlete is enrolled shall not be considered compensation for use of the athlete’s name, image, and likeness rights, or athletic reputation.
   The bill provides limitations on a student athlete entering into an apparel, equipment, or beverage contract providing compensation to the athlete for use of the student athlete’s name, image, likeness rights, or athletic reputation.
   The bill authorizes a postsecondary educational institution or any officer, director, or employee of such institution to identify, create, facilitate, negotiate, support, enable, or otherwise assist with opportunities for a student athlete to earn compensation from a third party, as defined in the bill, for the use of the student athlete’s name, image, likeness rights, or athletic reputation with specified limitations.
   The bill requires a student athlete to disclose a contract for compensation for the use of a student athlete’s name, image, likeness rights, or athletic reputation, or for professional representation, to the student athlete’s postsecondary educational institution in a manner prescribed by the institution before the contract is executed, and before any compensation is provided to the student athlete in advance of the contract.
   The bill prohibits a postsecondary educational institution or any officer, director, or employee of such institution from compensating a student athlete, prospective student athlete, or the family thereof for the use of the student athlete or prospective student athlete’s name, image, likeness rights, or athletic reputation, unless otherwise permitted by institutional policy and a collegiate athletics association of which the institution is a member.
   The bill requires a postsecondary educational institution or a third party to develop and adopt a process for granting to a student athlete, or to a third party for use with a student athlete, a license to use such institution’s or third party’s unique identifiers, such as a seal, logo, or emblem, when earning or attempting to earn compensation from the use of the student athlete’s name, image, likeness rights, or athletic reputation consistent with the institution’s or third party’s policies regarding licensing of its unique identifiers. The bill provides additional requirements for the use of unique identifiers.
   The bill provides that the terms of a contract of a postsecondary educational institution’s athletic program shall not prevent a student athlete from receiving compensation for using the student athlete’s name, image, likeness rights, or athletic reputation for a commercial purpose when the student athlete is not engaged in official mandatory team activities that are recorded in writing and can be made publicly available upon request.
   The bill provides that the terms of a contract detailing compensation to a student athlete at a public postsecondary educational institution for the use of the student athlete’s name, image, likeness rights, or athletic reputation shall be considered confidential records. The bill also addresses privacy of such contracts at private postsecondary educational institutions.
   The bill provides limitations on the conditions that can be placed on compensation to a student athlete for the use of the student athlete’s name, image, likeness rights, or athletic reputation and specifies that a nonprofit entity can provide such compensation.
   The bill establishes rights of an institutional marketing associate, as defined in the bill, and rights of a student receiving compensation from an institutional marketing associate.
   The bill requires a postsecondary educational institution to offer educational workshops with specified content to student athletes in certain circumstances.
   The bill prohibits an athletic association, athletic conference, or any other organization with authority over varsity intercollegiate athletics from engaging in specified activities relating to a student athlete’s name, image, likeness rights, or athletic reputation.
   The bill authorizes a student athlete to bring a civil action against third parties that violate the provisions of the bill or that interfere with the student athlete’s earning or attempting to earn compensation from the use of such student athlete’s name, image, likeness rights, or athletic reputation for injunctive relief and actual damages.
   The bill authorizes and provides limitations on compensation of a high school student who competes on an interscholastic athletic team, which must involve an athletic letter of intent or other written agreement to enroll in a postsecondary educational institution.
   The bill provides that a postsecondary educational institution’s employees shall not be liable for any damages to a student athlete’s ability to earn compensation for the use of the student athlete’s name, image, or likeness resulting from decisions or actions routinely taken in the course of intercollegiate athletics.
   A provision of a legal settlement permitting noncompliance with the bill is void and unenforceable.
   The bill shall not be construed to qualify a student athlete as an employee of a postsecondary educational institution or to affect the rights of student athletes under Tit. IX of the Education Amendments of 1972.
   The bill applies to agreements or contracts entered into, modified, or renewed on or after the effective date of the bill. Such agreements or contracts include but are not limited to the national letter of intent, an athlete’s financial aid agreement, commercial contracts in the athlete group licensing market, and athletic conference or athletic association rules or bylaws.