No official summary available for this bill.
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 3378 Introduced in Senate (IS)]
<DOC>
119th CONGRESS
1st Session
S. 3378
To amend the Internal Revenue Code of 1986 to establish name, image,
and likeness investment accounts for student-athletes, and for other
purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
December 4, 2025
Mrs. Blackburn (for herself and Ms. Cantwell) introduced the following
bill; which was read twice and referred to the Committee on Finance
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to establish name, image,
and likeness investment accounts for student-athletes, and for other
purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Helping Undergraduate Students
Thrive with Long-Term Earnings Act'' or the ``HUSTLE Act''.
SEC. 2. NIL INVESTMENT ACCOUNTS.
(a) In General.--Subchapter F of chapter 1 of the Internal Revenue
Code of 1986, as amended by section 70204 of Public Law 119-21, is
amended by adding at the end the following new part:
``PART X--NIL INVESTMENT ACCOUNTS
``SEC. 530B. NIL INVESTMENT ACCOUNTS.
``(a) General Rule.--An NIL investment account shall be exempt from
taxation under this subtitle. Notwithstanding the preceding sentence,
the NIL investment account shall be subject to the taxes imposed by
section 511 (relating to imposition of tax on unrelated business income
of charitable organizations).
``(b) Definitions and Special Rules.--For purposes of this section:
``(1) Designated beneficiary.--The term `designated
beneficiary' means the eligible athlete who established the NIL
investment account and is the owner of such account.
``(2) Eligible athlete.--
``(A) In general.--The term `eligible athlete'
means an individual who--
``(i) is enrolled as a student at a
participating institution of higher education,
and
``(ii) participates in an amateur or
collegiate athletic program.
``(B) Secretarial authority.--The Secretary, in
consultation with the Secretary of Education, shall
have the authority to--
``(i) further define the criteria for
participation in an amateur or collegiate
athletic program for purposes of subparagraph
(A)(ii),
``(ii) establish procedures for verifying
an individual's status as an eligible athlete,
and
``(iii) issue guidance regarding the
application of the requirements described in
subparagraph (A) in cases where an individual's
enrollment or athletic participation status
changes during a taxable year.
``(3) Participating institution of higher education.--
``(A) In general.--For purposes of this section,
the term `participating institution of higher
education' means an institution of higher education
which elects (pursuant to subparagraph (B)) to
participate under this section and to comply with any
requirements applicable to such institution of higher
education under this section.
``(B) Election and revocation.--
``(i) Election.--Any election made by an
institution of higher education to participate
under this section shall be effective for the
academic year with respect to which it is made
and for all subsequent academic years and, once
made, may be revoked only pursuant to clause
(ii).
``(ii) Revocation.--A revocation of an
election described in clause (i) may be made by
an institution of higher education only if--
``(I) such institution of higher
education provides notice of such
revocation to all eligible athletes
enrolled at such institution of higher
education, and
``(II) such revocation takes effect
no earlier than the first academic year
beginning after the date which is 12
months after the date on which the
notice described in subclause (I) has
been provided.
``(C) Institution of higher education.--For
purposes of this section, the term `institution of
higher education' has the same meaning given such term
in section 102 of the Higher Education Act of 1965 (20
U.S.C. 1002).
``(4) NIL investment account.--The term `NIL investment
account' means a trust created or organized in the United
States exclusively for the purpose of receiving contributions
of qualified NIL income and providing distributions to the
individual who is the designated beneficiary of the trust (and
designated as an NIL investment account at the time created or
organized), but only if the written governing instrument
creating the trust meets the following requirements:
``(A) No contribution will be accepted--
``(i) unless it is in cash and is made by
an eligible athlete from qualified NIL income,
or
``(ii) except in the case of rollover
contributions, if such contribution would not
be permitted under paragraph (6).
``(B) The trustee is a bank (as defined in section
408(n)) or another person who demonstrates to the
satisfaction of the Secretary that the manner in which
that person will administer the trust will be
consistent with the requirements of this section.
``(C) No part of the trust assets will be invested
in life insurance contracts.
``(D) The assets of the trust shall not be
commingled with other property except in a common trust
fund or common investment fund.
``(5) Qualified nil income.--The term `qualified NIL
income' means any income received by an eligible athlete that
is derived from the use of such athlete's name, image, or
likeness, including endorsements, appearances, social media
content creation, and licensing arrangements.
``(6) Contribution limitations.--No contribution will be
accepted to an NIL investment account for any eligible
athlete--
``(A) which, for any taxable year, is in excess of
the dollar amount determined under section 2503(b) for
the calendar year in which such taxable year began, and
``(B) after the end of the fifth taxable year in
which such athlete--
``(i) has received qualified NIL income,
and
``(ii) was enrolled at a participating
institution of higher education.
``(7) Treatment of contributions.--With respect to any
qualified NIL income received by an eligible athlete which is
contributed to an NIL investment account, at the election of
such eligible athlete, gross income shall not include such
qualified NIL income.
``(8) Treatment of self-employment taxes.--
``(A) In general.--For purposes of chapter 2
(relating to tax on self-employment income), any
qualified NIL income contributed to an NIL investment
account for which an election has been made pursuant to
paragraph (7) shall not be taken into account as net
earnings from self-employment (within the meaning of
section 1402(a)) for the taxable year of contribution.
``(B) Distributions.--Any distribution from an NIL
investment account that is includible in gross income
under subsection (c)(1) shall be treated as net
earnings from self-employment (within the meaning of
section 1402(a)) for purposes of chapter 2 in the
taxable year of distribution.
``(9) Limitations.--Rules similar to the rules of
paragraphs (4) and (5) of section 529(b) shall apply for
purposes of this section.
``(c) Tax Treatment of Distributions.--
``(1) In general.--Any distribution from an NIL investment
account shall be includible in the gross income of the
distributee in the manner as provided under section 72 to the
extent not excluded from gross income under any other provision
of this chapter.
``(2) Tax treatment of distributions.--
``(A) In general.--For purposes of applying
paragraph (1), a distribution shall be treated as--
``(i) includible in gross income and taxed
as ordinary income if made before the date on
which the designated beneficiary--
``(I) graduates from a
participating institution of higher
education (as provided in subparagraph
(D)), or
``(II) transfers from a
participating institution of higher
education to a non-participating
institution of higher education (as
provided in subparagraph (E)), and
``(ii) includible in gross income and taxed
at the rate applicable to long-term capital
gains under section 1(h) if made on or after
the date on which the designated beneficiary--
``(I) graduates from a
participating institution of higher
education (as provided in subparagraph
(D)), or
``(II) transfers from a
participating institution of higher
education to a non-participating
institution of higher education (as
provided in subparagraph (E)),
but, for purposes of clause (ii), only to the extent
that such distribution does not exceed the limitation
described in subparagraph (B) for the taxable year.
``(B) Limitation on preferential tax treatment.--
``(i) In general.--The amount of
distributions from an NIL investment account
that may be taxed at the rate applicable to
long-term capital gain under subparagraph
(A)(ii) during any taxable year shall not
exceed the amount described under section
1(h)(1)(B)(i) for an individual described in
section 1(c).
``(ii) Excess amounts.--Any distribution
exceeding the limitation under clause (i) shall
be includible in gross income, taxed as
ordinary income, and (except in the case of a
qualified distribution described in paragraph
(3)(B)) subject to the additional tax under
paragraph (3)(A).
``(C) Student transfers between institutions.--
``(i) In general.--In the case of a
designated beneficiary who transfers from one
participating institution of higher education
to another participating institution of higher
education (referred to in this subparagraph as
the `subsequent institution'), the graduation
date for purposes of this section shall be the
date on which the designated beneficiary
graduates from the subsequent institution.
``(ii) Notification requirement.--A
designated beneficiary who transfers to a
subsequent institution shall notify the trustee
of the NIL investment account of such transfer
within 60 days of enrollment at the subsequent
institution. The subsequent institution shall,
upon the request of the designated beneficiary,
confirm such enrollment to the trustee of the
NIL investment account.
``(iii) Multiple transfers.--The rules of
this paragraph shall apply to designated
beneficiaries who transfer between multiple
participating institutions of higher education,
with each subsequent institution being treated
as the relevant institution for purposes of
determining the graduation date.
``(D) Certification of graduation.--The
participating institution of higher education from
which the designated beneficiary graduates shall
transmit documentation of the designated beneficiary's
graduation directly to the trustee of the NIL
investment account. The Secretary shall prescribe the
form and manner of such certification.
``(E) Transfer to non-participating institution of
higher education.--In the case of a designated
beneficiary who transfers from a participating
institution of higher education to a non-participating
institution of higher education, the participating
institution of higher education shall notify the
trustee of the NIL investment account of such transfer.
``(3) Additional tax for distributions not used for
qualified expenses.--
``(A) In general.--The tax imposed by this chapter
for any taxable year on any taxpayer who receives a
distribution from an NIL investment account--
``(i) before the date on which the
designated beneficiary graduates from an
institution of higher education (as provided in
paragraph (2)(D)), or
``(ii) in the case of a distribution
described in paragraph (2)(A)(ii), which is in
excess of the limitation under paragraph
(2)(B)(i),
shall be increased by 10 percent of the amount which is
includible in gross income, unless such distribution is
a qualified distribution.
``(B) Qualified distributions.--For purposes of
subparagraph (A), a distribution shall be treated as a
qualified distribution if--
``(i) the distribution is made to a
beneficiary (or to the estate of the designated
beneficiary) on or after the death of the
designated beneficiary,
``(ii) the distribution is attributable to
the designated beneficiary's being disabled
(within the meaning of section 72(m)(7)),
``(iii) the distribution is used for
qualified expenses of the designated
beneficiary, or
``(iv) the distribution is part of a
rollover contribution described in paragraph
(4).
``(C) Qualified expenses.--For purposes of
subparagraph (B)(iii), the term `qualified expenses'
means expenses incurred by the designated beneficiary
for any of the following:
``(i) Career transition costs, including--
``(I) professional training,
certification, or education costs,
``(II) moving expenses (as defined
in section 217(b)) related to post-
athletic career opportunities, or
``(III) professional services
related to career planning and
development.
``(ii) Qualified higher education expenses
(as defined in section 529(e)(3)) of the
designated beneficiary.
``(iii) Qualified medical expenses (as
defined in section 213(d)) of the designated
beneficiary to the extent such expenses exceed
7.5 percent of the designated beneficiary's
adjusted gross income for the taxable year in
which such expenses are incurred.
``(iv) Such other purposes as are
determined appropriate by the Secretary.
``(D) Contributions returned before certain date.--
Subparagraph (A) shall not apply to the distribution of
any contribution made during a taxable year if--
``(i) such distribution is received on or
before the day prescribed by law (including
extensions of time) for filing such designated
beneficiary's return for such taxable year, and
``(ii) such distribution is accompanied by
the amount of net income attributable to such
excess contribution.
In the case of such a distribution, for purposes of
section 61, any net income described in clause (ii)
shall be included in gross income for the taxable year
in which such excess contribution was made.
``(4) Change in beneficiaries or programs.--
``(A) Rollovers.--Paragraph (1) shall not apply to
that portion of any distribution from an NIL investment
account which, within 60 days of such distribution, is
transferred into another NIL investment account for the
benefit of--
``(i) the designated beneficiary, or
``(ii) an eligible athlete who is a member
of the family of such beneficiary.
``(B) Change in designated beneficiaries.--Any
change in the designated beneficiary of an NIL
investment account shall not be treated as a
distribution for purposes of paragraph (1) if the new
beneficiary is--
``(i) an eligible athlete for such taxable
year, and
``(ii) a member of the family of the former
beneficiary.
``(C) Limitation on certain rollovers.--
Subparagraph (A) shall not apply to any transfer if
such transfer occurs within 12 months from the date of
a previous transfer to any NIL investment account for
the benefit of the designated beneficiary.
``(5) Special rules for applying estate and gift taxes with
respect to account.--Rules similar to the rules of paragraphs
(2), (4), and (5) of section 529(c) shall apply for purposes of
this section.
``(6) Member of the family.--For purposes of this
subsection, the term `member of the family' means, with respect
to any designated beneficiary, an individual who bears a
relationship to such beneficiary which is described in section
529(e)(2).
``(7) Loss of nil investment account treatment.--If an NIL
investment account is established for a designated beneficiary,
no account subsequently established for such beneficiary shall
be treated as an NIL investment account. The preceding sentence
shall not apply in the case of an account established for
purposes of a transfer described in paragraph (4)(A) if the
transferor account is closed as of the end of the 60-day period
referred to in such paragraph.
``(8) Transition to retirement accounts.--
``(A) In general.--Subject to subparagraph (C), an
individual who has ceased to be an eligible athlete for
at least 1 year may elect to convert their NIL
investment account, in whole or in part, to--
``(i) an individual retirement account (as
defined in section 408(a)),
``(ii) a Roth IRA (as defined in section
408A(b)), or
``(iii) such other retirement arrangements
as the Secretary may specify in regulations.
``(B) Tax treatment.--A conversion under
subparagraph (A) shall be treated as a rollover
contribution for purposes of this title.
``(C) Lifetime limitation.--With respect to any
individual described in subparagraph (A), the amount of
any conversion of any NIL investment account to any
other account or arrangement described in clause (i),
(ii), or (iii) of such subparagraph during any taxable
year shall not exceed the excess (if any) of $35,000
over the aggregate amount of any prior conversions
under this paragraph with respect to such individual
for all prior taxable years.
``(d) Tax Treatment of Accounts.--Rules similar to the rules of
paragraphs (2) and (4) of section 408(e) shall apply to any NIL
investment account.
``(e) Education Requirements.--
``(1) In general.--The trustee of an NIL investment account
shall make available to the designated beneficiary educational
materials regarding--
``(A) the benefits and rules of the NIL investment
account,
``(B) basic principles of investing and financial
planning,
``(C) the importance of long-term financial
security, and
``(D) such other topics as the Secretary may
specify in regulations.
``(2) Delivery of materials.--The educational materials
required under paragraph (1) shall be provided to a designated
beneficiary--
``(A) upon the establishment of an NIL investment
account, and
``(B) on an annual basis thereafter.
``(f) Regulations.--The Secretary shall prescribe such regulations
as may be necessary to carry out the purposes of this section,
including regulations--
``(1) to enforce the limitation described in subsection
(c)(7),
``(2) providing for the information required to be
presented to establish an NIL investment account,
``(3) to identify additional qualified expenses pursuant to
subsection (c)(3)(C)(iv),
``(4) to prevent fraud and abuse with respect to amounts
claimed as qualified expenses,
``(5) to ensure proper reporting and verification of NIL
income sources,
``(6) to establish procedures for tracking the number of
taxable years in which an eligible athlete makes contributions
to an NIL investment account,
``(7) to establish procedures for determining the annual
limit on preferential capital gains treatment under subsection
(c)(2)(B),
``(8) to establish procedures for the transition of NIL
investment accounts to retirement accounts under subsection
(c)(8), and
``(9) to allow for transfers described in subsection
(c)(4).''.
(b) Clerical Amendment.--The table of parts for subchapter F of
chapter 1 of such Code is amended by adding at the end the following
new item:
``Part X--NIL Investment Accounts''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2025.
SEC. 3. STUDENT ATHLETE SPORTS AGENT REFORM.
(a) In General.--The Sports Agent Responsibility and Trust Act (15
U.S.C. 7801 et seq.) is amended--
(1) in section 2 (15 U.S.C. 7801)--
(A) by amending paragraph (1) to read as follows:
``(1) Agency contract.--The term `agency contract' means a
written agreement--
``(A) in which a student athlete authorizes a
person to negotiate or solicit on behalf of the student
athlete a professional sports contract or an
endorsement contract; and
``(B) that--
``(i) states the name of each party to the
agreement;
``(ii) states the term of the agreement;
``(iii) states the registration information
for the athlete agent; and
``(iv) states the fee or commission charged
by the athlete agent.'';
(B) by redesignating paragraphs (3) through (9) as
paragraphs (5), (7), (9), (11), (12), (13), and (14),
respectively;
(C) by inserting after paragraph (2) the following:
``(3) Athletic association.--
``(A) In general.--The term `athletic association'
means any organization or other group organized in the
United States that--
``(i) has multiple conferences and
institutions as members;
``(ii) sponsors or arranges college
athletic competitions between those
institutions;
``(iii) sets common rules, standards,
procedures, or guidelines for the
administration of college athletic competition;
and
``(iv) is not a conference.
``(B) Inclusions.--The term `athletic association'
includes--
``(i) the National Collegiate Athletic
Association; and
``(ii) any other national intercollegiate
athletic association.
``(4) Athletic department.--The term `athletic department'
means a department at, or a component of, an institution
responsible for managing one or more varsity intercollegiate
sport programs.'';
(D) by inserting after paragraph (5), as
redesignated by subparagraph (B), the following:
``(6) College athletic competition.--The term `college
athletic competition' means any varsity game, meet, or other
competition between or among athletic teams sponsored by
institutions.'';
(E) by inserting after paragraph (7), as so
redesignated, the following:
``(8) Conference.--The term `conference' means any
organization that is not an athletic association and that--
``(A) has 2 or more institutions of higher
education as members; and
``(B) arranges championships for college athletic
competition or sets rules for college athletic
competition.'';
(F) by inserting after paragraph (9), as so
redesignated, the following:
``(10) Institution.--The term `institution' has the meaning
given the term `institution of higher education' in section 101
of the Higher Education Act of 1965 (20 U.S.C. 1001).''; and
(G) by adding at the end the following:
``(15) Varsity intercollegiate sport.--The term `varsity
intercollegiate sport' means a sport played at the
intercollegiate level, administered by an athletic department,
for which eligibility requirements for participation by student
athletes are established by an athletic association.'';
(2) in section 3 (15 U.S.C. 7802)--
(A) in subsection (a)--
(i) in paragraph (2), by striking ``; or''
and inserting a semicolon;
(ii) in paragraph (3), by striking the
period at the end and inserting a semicolon;
and
(iii) by adding at the end the following:
``(4) represent a student athlete for an endorsement
contract without first entering into an agency contract;
``(5) represent a student athlete for an endorsement
contract without the athlete agent first registering as an
agent with a State and certifying to an athletic association
governing the intercollegiate sport the student athlete
participates in that the athlete agent is registered with a
State;
``(6) charge a student athlete a fee in connection with an
endorsement contract that exceeds 5 percent of the value of the
endorsement contract;
``(7) enter into an agency contract with an athlete for a
term that extends beyond the eligibility of the student athlete
to participate in intercollegiate sport;
``(8) entice a student athlete to enroll at an institution,
transfer to or from an institution, or declare an intent to
transfer from an institution by misrepresenting the existence,
nature, or value of a name, image, or likeness opportunity the
athlete agent can arrange on behalf of the student athlete; or
``(9) make a materially false, misleading, deceptive, or
fraudulent representation as an athlete agent or in the
application for registration as an athlete agent.''; and
(B) in subsection (b)(3), by striking ``Warning to
Student Athlete: If you agree orally or in writing to
be represented by an agent now or in the future you may
lose your eligibility to compete as a student athlete
in your sport.''; and
(3) by inserting after section 3 the following:
``SEC. 3A. REGISTRATION AND OTHER REQUIREMENTS OF ATHLETE AGENTS AND
ATHLETIC ASSOCIATIONS.
``(a) Registration Requirement.--Prior to representing a student
athlete for an endorsement contract, a prospective athlete agent must
register with a State.
``(b) Registration Established.--An individual is deemed to be
registered with a State for purposes of this section if the individual
is--
``(1) a registered professional sports agent with a
professional sports league or players association, in good
standing; or
``(2) registered and certified under the All State Uniform
Agent Acts in the State in which the agent operates, in good
standing.
``(c) Agent Fee Cap.--Fees charged by an athlete agent in
connection with an endorsement contract entered into by a student
athlete shall not exceed 5 percent of the value of the endorsement
contract.
``(d) Certification to Athletic Associations.--
``(1) Requirement.--An athlete agent that represents a
student athlete participating in an intercollegiate sport
governed by an athletic association must certify to the
athletic association that the athlete agent is registered with
a State.
``(2) Prohibition.--It is unlawful for an individual to
certify to an athletic association that the individual is an
athlete agent if the individual is not registered with a State.
``(e) Requirements of Athletic Associations.--
``(1) Searchable registry.--It is unlawful for an athletic
association to operate without maintaining a publicly available
website that includes a searchable database of athlete agents
registered under subsection (a) and certified under subsection
(b).
``(2) Website.--An athletic association shall include on a
publicly available website a working link to, or information on
how to locate, the website of the Commission.''.
(b) Clerical Amendment.--The table of contents for the Sports Agent
Responsibility and Trust Act is amended by inserting after the item
relating to section 3 the following:
``Sec. 3A. Registration and other requirements of athlete agents and
athletic associations.''.
SEC. 4. PRIVATE RIGHT OF ACTION.
(a) In General.--The Sports Agent Responsibility and Trust Act (15
U.S.C. 7801 et seq.) is amended by inserting after section 5 the
following:
``SEC. 5A. PRIVATE RIGHT OF ACTION.
``(a) In General.--Any current or former student athlete alleging a
violation of this Act by an athlete agent (other than a violation of
section 6(a)) may bring a civil action against such athlete agent in an
appropriate district court of the United States or in an appropriate
State court.
``(b) Relief.--In a civil action brought under subsection (a) in
which the plaintiff prevails, the court may award--
``(1) actual damages;
``(2) reasonable attorney's fees and litigation costs; and
``(3) injunctive, equitable, or declaratory relief, that
the court determines appropriate.
``(c) Invalidity of Pre-Dispute Arbitration Agreements and Pre-
Dispute Joint Action Waivers.--
``(1) In general.--Notwithstanding any other provision of
law, no pre-dispute arbitration agreement or pre-dispute joint
action waiver shall be valid or enforceable against a student
athlete with respect to a dispute arising under this Act.
``(2) Applicability.--Any determination as to whether or
how paragraph (1) applies to any dispute shall be made by a
court, rather than an arbitrator, without regard to whether the
agreement or waiver that is the subject of the dispute purports
to delegate such determination to an arbitrator.
``(3) Definitions.--In this subsection:
``(A) Pre-dispute arbitration agreement.--The term
`pre-dispute arbitration agreement' means any agreement
to arbitrate a dispute that has not arisen at the time
of the making of the agreement.
``(B) Pre-dispute joint-action waiver.--The term
`pre-dispute joint-action waiver' means an agreement,
whether or not part of a pre-dispute arbitration
agreement, that would prohibit, or waive the right of,
one of the parties to the agreement to participate in a
joint, class, or collective action in a judicial,
arbitral, administrative, or other forum, concerning a
dispute that has not yet arisen at the time of the
making of the agreement.''.
(b) Clerical Amendment.--The table of contents for the Sports Agent
Responsibility and Trust Act is amended by inserting after the item
relating to section 5 the following:
``Sec. 5A. Private right of action.''.
<all>
Introduced in Senate
Read twice and referred to the Committee on Finance.
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