H.R. 7403 — No Foreign NIL Funds Act

This section amends the Higher Education Act of 1965 by adding a new requirement (paragraph (30)) to program participation agreements, conditioning institutional eligibility for Title IV programs (i.e., federal student aid including Pell Grants and loans) on compliance with the No Foreign NIL Funds Act. The Act prohibits nationals or entities of a foreign country from providing any benefit or contribution—monetary or in-kind, regardless of value—to a covered entity (i.e., student athlete) related to a name, image, and likeness (NIL) agreement and requires reporting of solicitations to the Attorney General and Secretary of Education. Institutions must certify policies to (1) prohibit violating student athletes from intercollegiate athletics for one year, (2) notify students committed to varsity sports teams of the Act's requirements and penalty, and (3) annually notify student athletes thereof. The Attorney General, in coordination with the Secretary of Education, must investigate suspected institutional violations, notify institutions within 30 days of determinations (with appeal rights to the Department of Education's Office of Hearings and Appeals), and deem confirmed-violating institutions ineligible for Title IV programs until they submit a compliance report detailing adherence, including divestment of prohibited funds. (Thus, such institutions lose access to federal student aid.) Violating covered entities face penalties under the International Emergency Economic Powers Act.

This section prohibits institutions of higher education, athletic conferences, media rights distributors, and bowl or post-season football organizations from entering into, renewing, or maintaining contracts, partnerships, joint ventures, naming-rights agreements, sponsorships, or media-rights arrangements involving direct or indirect financing, ownership, or material participation by a foreign country, or from engaging in covered activities with a foreign country. It requires such entities to annually disclose relevant contracts and ownership information involving entities of a foreign country to the Secretary of the Treasury, in coordination with the Committee on Foreign Investment in the United States (CFIUS), and the Secretary of Education. It subjects violators to civil penalties under section 206(b) of the International Emergency Economic Powers Act (50 U.S.C. 1705(b)), i.e., the greater of $250,000 or twice the amount of the transaction.

This section defines 12 terms used in the Act, including “athletic conference” (i.e., an organization with two or more institutions of higher education as members that arranges championships or sets rules for college athletic competition); “bowl or post-season football organization”; “covered activities” (i.e., revenue-generating activities in NCAA Division I men’s or women’s intercollegiate athletics, such as naming rights, media rights, sponsorships, joint ventures, and competitions); “covered entity” (i.e., institutions of higher education, student athletes, or related fundraising entities for name, image, and likeness agreements); “entity of a foreign country”; “foreign country” (i.e., any country other than NATO members, Australia, New Zealand, or Ireland); “institution of higher education” (as defined in section 101 of the Higher Education Act of 1965, 20 U.S.C. 1001); “media rights distributor”; “name, image, and likeness agreement”; “national of a foreign country”; “student athlete” (i.e., an individual enrolled at an institution of higher education who participates on its varsity sports team); and “varsity sports team.”