Helping Undergraduate Students Thrive with Long-Term Earnings Act; HUSTLE Act
Summary
The Helping Undergraduate Students Thrive with Long-Term Earnings (HUSTLE) Act aims to amend the Internal Revenue Code of 1986 by establishing Name, Image, and Likeness (NIL) investment accounts for student-athletes. This would allow student-athletes to contribute income earned from their NIL into tax-advantaged investment accounts.
The bill also seeks to reform the Sports Agent Responsibility and Trust Act (SPARTA) to provide greater protection and regulation concerning student-athlete representation. It introduces stricter rules for sports agents, including registration requirements and fee caps.
Furthermore, the HUSTLE Act establishes a private right of action for student-athletes to sue agents for violations of the Act, enhancing their ability to seek legal recourse.
Expected Effects
The HUSTLE Act would create a new financial vehicle for student-athletes, enabling them to save and invest NIL earnings with potential tax benefits. This could lead to improved long-term financial security for these athletes.
SPARTA reforms would likely lead to increased oversight and accountability for sports agents, reducing the risk of exploitation of student-athletes. The private right of action empowers student-athletes to pursue legal remedies against unscrupulous agents.
Participating institutions of higher education would need to elect to participate and comply with the requirements of the act. The Secretary of Education would also be required to consult with the Secretary to further define criteria for participation in amateur or collegiate athletic programs.
Potential Benefits
- Financial Empowerment: Allows student-athletes to invest NIL earnings in tax-advantaged accounts.
- Agent Accountability: Strengthens regulations and oversight of sports agents, protecting athletes from exploitation.
- Legal Recourse: Provides a private right of action for student-athletes to sue agents for violations.
- Educational Resources: Mandates the provision of financial literacy resources to student-athletes.
- Long-Term Security: Facilitates long-term financial planning and security for student-athletes.
Potential Disadvantages
- Complexity: Introduces a new layer of tax regulations and compliance requirements.
- Administrative Burden: Creates administrative responsibilities for institutions of higher education and the IRS.
- Potential for Abuse: Despite regulations, the potential for misuse of NIL investment accounts remains.
- Uneven Access: Benefits may disproportionately favor athletes with significant NIL earnings, potentially exacerbating existing inequalities.
- Limited Scope: The act primarily focuses on athletes with NIL deals, potentially neglecting other student needs.
Constitutional Alignment
The HUSTLE Act primarily deals with tax law and regulation of sports agents, which falls under the purview of Congress's power to lay and collect taxes (Article I, Section 8, Clause 1) and regulate commerce among the states (Article I, Section 8, Clause 3).
The establishment of NIL investment accounts and the regulation of sports agents do not appear to infringe upon any specific constitutional rights or liberties. The act aims to provide financial benefits and protections to student-athletes, which aligns with the general welfare clause of the Constitution's preamble.
However, the specific regulations and requirements imposed on institutions of higher education and individuals must be carefully crafted to avoid potential conflicts with other constitutional principles, such as due process or equal protection.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).