Text: H.R.3046 — 102nd Congress (1991-1992)All Information (Except Text)

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HR 3046 IH
102d CONGRESS
1st Session
 H. R. 3046
To exempt from the antitrust laws certain conduct engaged in by the National
Collegiate Athletic Association (NCAA) jointly with member institutions for
the purpose of allowing the NCAA exclusively to negotiate certain contracts,
and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
July 25, 1991
Mr. MCMILLEN of Maryland (for himself, Mr. TOWNS, Mr. BILBRAY, and
Mr. RICHARDSON) introduced the following bill; which was referred jointly to
the Committees on the Judiciary, Education and Labor, Energy and Commerce,
and Ways and Means
A BILL
To exempt from the antitrust laws certain conduct engaged in by the National
Collegiate Athletic Association (NCAA) jointly with member institutions for
the purpose of allowing the NCAA exclusively to negotiate certain contracts,
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 `Collegiate Athletics Reform Act'.
SEC. 2. FINDINGS.
  The Congress finds that--
  (1) the National Collegiate Athletic Association (NCAA) and intercollegiate
  athletics have a direct and substantial effect on interstate commerce;
  (2) NCAA member institutions conduct amateur athletic events in the
  50 States;
  (3) revenue is received from these amateur athletic events through a
  variety of means, including broadcasting rights, cable television rights,
  sponsorship of amateur athletic events, endorsement of products, event
  ticket sales, and advertising;
  (4) revenue from such amateur athletic events is estimated to be in the
  hundreds of millions of dollars each year;
  (5) competition for products related to intercollegiate athletic events
  is increasing every year, and this competition is resulting in a variety
  of new commercial ventures, including the sale of team logos, unique
  advertising contracts, and the sale of amateur athletic event programs;
  (6) such commercial ventures are having a variety of negative effects on
  the higher education system, including lower graduation rates for student
  athletes on revenue-producing sports teams, a reduction in the credibility
  of the higher education system as measured by public opinion polls, and an
  over-emphasis on the recruitment of student athletes to increase revenues
  at a member insitution;
  (7) most collegiate athletic programs do not allocate appropriate funds
  to women's athletics in accordance with the provisions of title IX of the
  Education Amendments of 1972 (20 U.S.C. 1681 et seq.); and
  (8) NCAA member institutions have been reluctant to enact the necessary
  reforms to correct these deficiencies either at annual conventions or
  through other means.
TITLE I--ANTITRUST EXEMPTION
SEC. 101. TEMPORARY EXEMPTION FROM ANTITRUST LAWS.
  If the requirements of sections 102, 103, 104, and 105 are met throughout
  the 5-year period beginning 1 year after the date of the enactment of this
  Act, then the antitrust laws shall not apply to any conduct engaged in
  during such 5-year period by the NCAA jointly with any member institution
  for the purpose of allowing the NCAA to negotiate and carry out a contract
  with any person involving--
  (1) the use or sale of the name or logo of a commercial sponsor in
  association with a post-season amateur athletic event engaged in by a
  member institution;
  (2) the sale of the right to telecast an amateur athletic event engaged
  in by a member institution; or
  (3) both activities listed in paragraphs (1) and (2).
SEC. 102. NCAA BOARD OF PRESIDENTS.
  (a) IN GENERAL- The requirements of this section are met if the NCAA is
  governed in accordance with this section by a board which shall be known
  as the `Board of Presidents' (hereinafter in this title referred to as the
  `Board').
  (b) MEMBERSHIP-
  (1) NUMBER AND APPOINTMENT- The Board shall consist of not more than 33
  members who shall be selected, in accordance with procedures developed by
  the NCAA, from among the presidents of the member institutions. The Board
  shall consist of an equal number of members from each division in the NCAA.
  (2) CHAIRMAN- The chairman of the Board shall be elected by the members
  of the Board.
  (c) DECISIONMAKING- Any action taken by the Board may be overruled by a
  vote of two-thirds of the presidents of the member institutions or the
  designees of such presidents.
  (d) DIRECTOR AND STAFF-
  (1) DIRECTOR- The Board shall appoint a director who shall carry out such
  administrative activities as the Board considers appropriate.
  (2) STAFF- The director may appoint such additional staff as the Board
  considers appropriate to assist the director in carrying out the director's
  duties.
  (e) TIME LIMIT- The initial members of the Board shall be selected by the
  NCAA not later than 90 days after the date of the enactment of this Act.
SEC. 103. REVENUE DISTRIBUTION PLAN.
  (a) IN GENERAL- The requirements of this section are met if the NCAA has
  in effect and carries out a net contract revenue distribution plan that is--
  (1) developed by the Board; and
  (2) certified by the Secretary of Education to require compliance with
  subsections (b), (c), and (d).
  (b) CRITERIA- The revenue distribution plan referred to in subsection
  (a) shall--
  (1) encourage each member institution to decrease the number of--
  (A) its revenue-producing sports teams; and
  (B) its facilities used specifically for revenue-producing sports teams;
  (2) encourage each member institution to decrease the amount of funds it
  expends for the administration of its athletic department, other than funds
  expended to improve compliance with title IX of the Education Amendments
  of 1972 (20 U.S.C. 1681 et seq.);
  (3) encourage each member institution to increase the level of academic
  performance of student athletes who participate on its revenue-producing
  sports teams to a level not less than the mean level of the academic
  performance of the general student body of such member institution; and
  (4) develop a method of allocating net contract revenue to each member
  institution in direct proportion to the extent of its compliance with
  title IX of the Education Amendments of 1972 (20 U.S.C. 1681 et seq.).
  (c) DISTRIBUTION OF NET CONTRACT REVENUE BASED ON WINNING RECORD
  PROHIBITED- The NCAA shall not distribute any net contract revenue to a
  member institution based on the extent to which any sports team representing
  such member institution wins amateur athletic events.
  (d) REPORT- Not later than 5 years after the date of the enactment of this
  Act, the Secretary of Commerce shall submit to the Congress a report on
  the impact of the net contract revenue distribution plan on--
  (1) the diversity of amateur athletic events on broadcast television and
  pay television services;
  (2) the financial integrity of institutions of higher education;
  (3) the television networks and their affiliates, and the revenue received
  by such networks or affiliates resulting from contracts for telecasting
  amateur athletic events; and
  (4) the higher education system.
SEC. 104. DUE PROCESS PROCEDURES.
  (a) IN GENERAL- The requirements of this section are met if the NCAA has
  in effect and enforces rules which provide for due process before the
  NCAA suspends--
  (1) a coach or student athlete from a team representing a member institution
  or reprimands such a coach or student athlete;
  (2) or prohibits a member institution from participating in an amateur
  athletic event; or
  (3) the telecommunications privileges of a member institution.
  (b) STUDY- Not later than 180 days after the date of the enactment of
  this Act, the Chairman of the Federal Communications Commission shall
  submit to the Congress a report on the impact on member institutions
  of NCAA suspensions of the telecommunications privileges of such member
  institutions pursuant to subsection (a)(3), and the loss of funds to member
  institutions caused by such suspensions.
SEC. 105. STUDENT ATHLETE SCHOLARSHIP PLAN.
  (a) IN GENERAL- The requirements of this section are met if the NCAA has
  in effect and enforces a student athlete scholarship plan pursuant to
  subsection (b).
  (b) CRITERIA- The student athlete scholarship plan referred to in subsection
  (a) shall encourage each member institution to allow each individual who
  receives an athletic scholarship awarded by such institution to retain
  such scholarship during the period of such individual's enrollment at such
  institution (but not to exceed 5 years) if such individual--
  (1) maintains acceptable academic performance;
  (2) makes a good-faith effort to participate in the athletic program for
  which such individual is awarded the athletic scholarship;
  (3) complies with all regulations and policies of the member institution
  attended; and
  (4) is not convicted in a court of law of--
  (A) a felony; or
  (B) a drug- or alcohol-related offense.
Compliance with paragraphs (1), (2), and (3) shall be determined by the
member institution attended by such individual.
SEC. 106. REPORT RELATING TO TELECASTING OF NCAA ATHLETIC EVENTS.
  Not later than 5 years after the date of the enactment of this Act, the
  Federal Communications Commission shall submit a report to the Congress
  that--
  (1) specifies the number of NCAA athletic events available on free, broadcast
  television, cable television, and `pay-per-view' television systems; and
  (2) evaluates the shift in the telecasting of amateur athletic events from
  broadcast television to cable television and `pay-per-view' television
  systems.
SEC. 107. REGULATION OF CERTAIN AMATEUR ATHLETIC EVENT BROADCASTS.
  (a) IN GENERAL- The Federal Communications Commission shall promulgate
  regulations which prohibit any television network or any affiliate of such
  network (or any successor or designee of such networks or affiliate) from
  broadcasting an amateur athletic event involving a sports team representing
  a disqualified college (as defined in section 512(e)(2) of the Internal
  Revenue Code of 1986) at the same time and in the same viewing area as a
  broadcast of an amateur athletic event involving a member institution.
  (b) TIME LIMIT- The Commission shall establish the regulations referred
  to in subsection (a) not later than 1 year after the date of the enactment
  of this Act.
SEC. 108. DEFINITIONS.
  For purposes of this title--
  (1) the term `amateur athletic event' means a basketball game or a football
  game, as defined by the NCAA as of January 1, 1991;
  (2) the term `antitrust laws' has the meaning given it in subsection (a)
  of the first section of the Clayton Act (15 U.S.C. 12(a)), except that such
  term includes section 5 of the Federal Trade Commission Act (15 U.S.C. 45)
  to the extent that such section 5 applies to unfair methods of competition;
  (3) the term `division' means a group of member institutions whose sports
  teams compete against each other, as defined by the NCAA as of January
  1, 1991;
  (4) the term `felony' means any offense punishable by a term of imprisonment
  exceeding 1 year or by death;
  (5) the term `member institution' means a post-secondary educational
  institution which is a member of the NCAA;
  (6) the term `NCAA' means the National Collegiate Athletic Association
  (and a successor thereof);
  (7) the term `net contract revenue' means revenue received by the NCAA
  under a contract relating to any activities specified in paragraphs (1)
  of (2) of section 101, minus--
  (A) any amount paid to a member institution to reimburse such member
  institution for travel expenses and other expenses incurred by a sports
  team representing such member institution in a post-season amateur athletic
  event; and
  (B) any amount paid for administrative and overhead expenses incurred by
  the NCAA to carry out the net contract revenue distribution plan under
  section 103;
  (8) the term `person' has the meaning given it in subsection (a) of the
  first section of the Clayton Act (15 U.S.C. 12(a));
  (9) the term `post-season amateur athletic event' means an amateur athletic
  event that is a championship game or post-season tournament game, as
  defined by the NCAA as of January 1, 1991; and
  (10) the term `student athlete' means an individual who--
  (A) is enrolled at a member institution in an academic program that leads
  to a degree; and
  (B) is a member of a sports team that represents a member institution and
  competes against sports teams that represent other member institutions.
TITLE II--TAX PROVISIONS
SEC. 201. TREATMENT OF REVENUE FROM CERTAIN AMATEUR ATHLETIC EVENTS.
  (a) CERTAIN ORGANIZATIONS SUBJECT TO UNRELATED BUSINESS INCOME TAX-
  Section 512 of such Code (defining unrelated business taxable income)
  is amended by adding at the end the following new subsections:
  `(d) CERTAIN ORGANIZATIONS AND MEMBER INSTITUTIONS-
  `(1) IN GENERAL- In determining the unrelated business taxable income of
  an existing national athletic organization of colleges and universities
  and each such member institution of such an organization--
  `(A) there shall be included all gross income accrued after the
  disqualification date with respect to activities described in paragraph
  (3), and
  `(B) there shall be allowed all deductions directly connected with such
  income.
  `(2) DISQUALIFICATION DATE- For purposes of paragraph (1), the term
  `disqualification date' means the earliest date during the 5-year period
  described in section 101 of the Collegiate Athletics Reform Act on which
  any of the requirements of sections 102, 103, 104, and 105 of such Act
  are not met.
  `(3) ACTIVITIES- The activities referred to in this paragraph are--
  `(A) the sale of tickets for an amateur athletic event;
  `(B) the use or sale of merchandise related to an amateur athletic event;
  `(C) the use or sale of the name or logo of a commercial sponsor in
  association with an amateur athletic event; and
  `(D) the sale of the right to telecast an amateur athletic event.
  `(4) DEFINITIONS- For purposes of this subsection--
  `(A) MEMBER INSTITUTION- The term `member institution' means, with respect
  to an existing national athletic organization of colleges and universities,
  those colleges and universities which are members of such organization and
  which are engaged in interstate commerce. Such term includes any successor
  to a member institution described in the preceding sentence.
  `(B) EXISTING NATIONAL ATHLETIC ORGANIZATION OF COLLEGES AND UNIVERSITIES-
  The term `existing national athletic organization of colleges and
  universities' means any national athletic organization of colleges and
  universities if--
  `(i) such organization conducts amateur athletic events,
  `(ii) such organization consists of more than 500 member institutions, and
  `(iii) such organization was organized before the date of the enactment
  of this subsection.
Such term includes any successor to an organization described in the
preceding sentence.
  `(5) REGULATIONS- The Secretary may prescribe such regulations as may be
  necessary or appropriate to carry out the purposes of this subsection.
  `(e) CERTAIN COLLEGES AND UNIVERSITIES-
  `(1) IN GENERAL- In determining the unrelated business taxable income of
  a disqualified college--
  `(A) there shall be included all gross income with respect to activities
  described in subsection (d)(3) occurring after the disqualification date, and
  `(B) there shall be allowed all deductions directly connected with such
  income.
  `(2) DISQUALIFIED COLLEGE- For purposes of paragraph (1), the term
  `disqualified college' means--
  `(A) any college or university which was a member institution (as defined
  in subsection (d)(4)(A)) at any time during the 3-year period ending on
  the date of the enactment of this subsection and which ceases to be a
  member institution (whether such cessation occurs before, on, or after
  such date), and
  `(B) any college or university (not otherwise a disqualified college)
  if any sports team thereof engages in an amateur athletic event with a
  disqualified college.
Subparagraph (A) shall not apply to any former member institution which
establishes to the satisfaction of the Secretary that such cessation is not
for the purpose of negotiating and carrying out a contract with any person
involving any of the activities specified in subsection (d)(3).
  `(3) DISQUALIFICATION DATE- For purposes of paragraph (1), the term
  `disqualification date' means--
  `(A) in the case of a college or university referred to in paragraph
  (2)(A), the date of the cessation referred to therein, and
  `(B) in the case of a college or university referred to in paragraph
  (2)(B), the date on which the event referred to therein occurred.
  `(4) DEFINITIONS- For purposes of this subsection the terms `member
  institution' and `existing national athletic organization of colleges and
  universities' have the respective meanings given such terms by subsection
  (d)(4).
  `(5) APPLICATION OF SUBSECTION- This subsection shall apply in the case
  of a member institution of an existing national athletic organization of
  colleges and universities only--
  `(A) during the portion of the 5-year period referred to in section 101
  of the Collegiate Athletics Reform Act that such organization meets the
  requirements of sections 102, 103, 104, and 105 of such Act; and
  `(B) with respect to activities specified in subsection (d)(3) occurring
  during such portion of such 5-year period.
The preceding sentence shall apply whether or not such organization is
subject to such requirements.
  `(6) REGULATIONS- The Secretary may prescribe such regulations as may be
  necessary or appropriate to carry out the purposes of this subsection.'.
  (b) EFFECTIVE DATE- The amendment made by this section shall apply to
  taxable years ending after the date of the enactment of this Act.
SEC. 202. INCOME FROM CERTAIN BENEFITS PROVIDED BY A MEMBER INSTITUTION
EXCLUDED FROM GROSS INCOME OF A STUDENT ATHLETE.
  (a) IN GENERAL- Part III of subchapter B of chapter 1 of the Internal Revenue
  Code of 1986 (relating to items specifically excluded from gross income)
  is amended by redesignating section 136 as section 137 and by inserting
  after section 135 the following new section:
`SEC. 136. CERTAIN STUDENT ATHLETE BENEFITS.
  `(a) GENERAL RULE- In the case of an individual who is a student athlete
  at a member institution of an existing national athletic organization
  of colleges and universities, gross income does not include the amounts
  received by such individual (whether in kind or as reimbursement for
  expenses incurred by such individual) for any of the following:
  `(1) Room and board.
  `(2) Tuition expenses.
  `(3) Personal counseling.
  `(4) Tutorial services.
  `(5) Medical expenses.
  `(6) In addition to amounts excluded under the preceding paragraphs any
  amount up to $300 per month for any individual who qualifies on the basis
  of need under part F of title IV of The Higher Education Act of 1965
  (20 U.S.C. 1087kk et seq.).
  `(b) DEFINITIONS- For the purposes of this section--
  `(1) MEMBER INSTITUTION- The term `member institution' has the meaning
  given such term in section 512(d)(4)(A).
  `(2) EXISTING NATIONAL ATHLETIC ORGANIZATION OF COLLEGES AND UNIVERSITIES-
  The term `existing national athletic organization of colleges and
  universities' has the meaning given such term in section 512(d)(4)(B).
  `(3) STUDENT ATHLETE- The term `student athlete' means an individual who--
  `(A) is enrolled at a member institution in an academic program that leads
  to a degree; and
  `(B) is a member of a sports team representing a member institution which
  competes against sports teams representing other member institutions.
  `(c) APPLICATION OF SECTION- In the case of a student athlete at a member
  institution of an existing national athletic organization of colleges
  and universities, this section shall apply only during the portion of
  the 5-year period referred to in section 101 of the Collegiate Athletics
  Reform Act that such organization meets the requirements of sections 102,
  103, 104, and 105 of such Act.'.
  (b) CONFORMING AMENDMENT- The table of sections for part III of subchapter B
  of chapter 1 of such Code is amended by striking the last item and inserting
  the following new items:
`Sec. 136. Certain student athlete benefits.
`Sec. 137. Cross references to other Acts.'
  (c) EFFECTIVE DATE- The amendments made by this section shall apply to
  taxable years beginning on or after the date of the enactment of this Act.
TITLE III--EDUCATION PROGRAM REQUIREMENTS
SEC. 301. DISCLOSURES.
  (a) DISCLOSURE TO STUDENTS- Section 485(a)(1) of the Higher Education Act
  of 1965 (20 U.S.C. 1092(a)(1)) is amended--
  (1) by striking `and' at the end of subparagraph (K);
  (2) by striking the period at the end of subparagraph (L), as added by
  section 103(a) of the Student Right-To-Know and Campus Security Act (20
  U.S.C. 1001 note), and inserting a semicolon;
  (3) by redesignating subparagraph (L), as added by section 201 of the
  National and Community Service Act of 1990 (42 U.S.C. 12401 note), as
  subparagraph (M);
  (4) by striking the period at the end of subparagraph (M) (as redesignated
  by paragraph (3)) and inserting a semicolon; and
  (5) by adding at the end thereof the following new subparagraphs:
  `(N) in a form prescribed by the Secretary--
  `(i) the total revenues, and the revenues by sport, of the institution's
  athletic departments and athletic activities;
  `(ii) the total expenditures, and the expenditures by sport, for such
  departments and activities; and
  `(iii) the total revenues and expenditures of the institution for the same
  period; and
  `(O) any funds transferred by an institution from its athletic departments
  to its general fund, or any funds transferred by an institution from its
  general fund to its athletic departments.'.
  (b) COLLECTION AND PUBLICATION OF INFORMATION- Section 485(a) of such Act is
  further amended by inserting after paragraph (4) the following new paragraph:
  `(5) The Secretary shall--
  `(A) collect and compile the forms required to be disclosed under paragraph
  (1)(N);
  `(B) make such compiled forms readily available for public inspection and
  copying; and
  `(C) publicly announce, annually, the availability of such compiled forms.'.
  (c) EFFECTIVE DATE- The amendments made by this section shall take effect
  on July 1, 1992.