HR5812-119

1. Short title This Act may be cited as the Correcting Opportunity and Accountability in Collegiate Hiring Act (COACH Act).

2. Findings Congress finds the following: Intercollegiate athletics, when properly governed, promote student development and broad-based participation aligned with educational missions. Institutions participating in programs under title IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.) receive substantial Federal support and tax advantages, creating a heightened obligation to manage athletics in service of educational priorities and equal opportunity. Escalating compensation and buyouts for athletics personnel can divert resources from academic priorities and broad-based opportunities, including women’s and Olympic sports, and warrant reasonable, uniform guardrails as a condition of title IV participation. Federal courts have held that the National Collegiate Athletic Association’s caps on coaches’ pay violate antitrust laws—e.g., Law v. NCAA (10th Cir. 1998) permanently enjoining the NCAA’s restricted-earnings coach salary cap rule—and have continued to scrutinize coach-compensation restraints (including rules setting compensation to zero); therefore, any statutory cap must be accompanied by a targeted antitrust safe harbor to permit collective implementation and enforcement.

3. Program participation agreements Section 487(a) of the Higher Education Act of 1965 (20 U.S.C. 1094(a)) is amended by adding at the end the following: As a condition of eligibility under this title, the institution shall ensure that the total annual compensation paid, promised, or provided to any athletics department employee does not exceed 10 times the institution’s tuition and required fees for a first-time, full-time undergraduate for the most recent academic year. Any payment to terminate, buy out, or settle an employment agreement with an athletics department employee shall be treated as compensation for purposes of subparagraph (A) in the year paid, and may not cause the cap in subparagraph (A) to be exceeded. The institution shall ensure compliance with this paragraph for any agreement entered by an athletics conference, media-rights consortium, collective, foundation, or other affiliate that allocates, assigns, or provides compensation or buyouts to the institution’s athletics department employees. The Secretary shall require annual program participation agreement certification that the institution and its affiliates are in compliance with this paragraph and shall require public disclosure of the cap amount for the year and the tuition and required fees figure used to calculate it and the number of covered employees whose total annual compensation is within 10 percent of the cap. Written employment agreements executed before the date of this Act may continue for their remaining original term (excluding extensions or renewals), provided that the agreement and scheduled payments are disclosed under subparagraph (D); and no amendment increases compensation above amounts stated in the agreement as of the date of this Act. Agreements executed on or after the date of this Act shall comply with this paragraph. In this paragraph, the term: Athletics department employee—means any employee of the institution (or of a related organization acting for the institution) whose primary duties relate to intercollegiate athletics, including head and assistant coaches, the director of athletics, associate or assistant athletic directors, and senior athletics administrators. Tuition and required fees—means the published undergraduate tuition and required fees for a first-time, full-time undergraduate student at the institution, as reported to the Integrated Postsecondary Education Data System pursuant to section 487(a)(17) of the Higher Education Act of 1965 (20 U.S.C. 1094(a)(17)). For public institutions with differential resident and nonresident rates, the in-state figure applies. Athletics conference—means a voluntary association of institutions of higher education formed to organize, regulate, or commercialize intercollegiate varsity athletics competition, including any media-rights or data-rights affiliate. Total annual compensation—means wages, salaries, stipends, allowances, incentive or performance bonuses, signing or retention bonuses, deferred compensation, employer retirement contributions above standard plan matches, severance, buyouts, cancellation or mitigation payments, in-kind compensation, appearance fees, debt servicing, debt relief, and any other compensation paid by or through a related organization (including a foundation, booster organization, media arm, or affiliate) or a third party under an arrangement to perform services for the institution. (30)Limitations on intercollegiate athletics compensation and buyouts (A)Compensation capAs a condition of eligibility under this title, the institution shall ensure that the total annual compensation paid, promised, or provided to any athletics department employee does not exceed 10 times the institution’s tuition and required fees for a first-time, full-time undergraduate for the most recent academic year. (B)Buyouts and separation paymentsAny payment to terminate, buy out, or settle an employment agreement with an athletics department employee shall be treated as compensation for purposes of subparagraph (A) in the year paid, and may not cause the cap in subparagraph (A) to be exceeded. (C)Conference and affiliate coverageThe institution shall ensure compliance with this paragraph for any agreement entered by an athletics conference, media-rights consortium, collective, foundation, or other affiliate that allocates, assigns, or provides compensation or buyouts to the institution’s athletics department employees. (D)Certification and disclosureThe Secretary shall require annual program participation agreement certification that the institution and its affiliates are in compliance with this paragraph and shall require public disclosure of the cap amount for the year and the tuition and required fees figure used to calculate it and the number of covered employees whose total annual compensation is within 10 percent of the cap. (E)Transition (i)Written employment agreements executed before the date of this Act may continue for their remaining original term (excluding extensions or renewals), provided that the agreement and scheduled payments are disclosed under subparagraph (D); and no amendment increases compensation above amounts stated in the agreement as of the date of this Act. (ii)Prospective complianceAgreements executed on or after the date of this Act shall comply with this paragraph. (F)DefinitionsIn this paragraph, the term: (i)Athletics department employee—means any employee of the institution (or of a related organization acting for the institution) whose primary duties relate to intercollegiate athletics, including head and assistant coaches, the director of athletics, associate or assistant athletic directors, and senior athletics administrators. (ii)Tuition and required fees—means the published undergraduate tuition and required fees for a first-time, full-time undergraduate student at the institution, as reported to the Integrated Postsecondary Education Data System pursuant to section 487(a)(17) of the Higher Education Act of 1965 (20 U.S.C. 1094(a)(17)). For public institutions with differential resident and nonresident rates, the in-state figure applies. (iii) Athletics conference—means a voluntary association of institutions of higher education formed to organize, regulate, or commercialize intercollegiate varsity athletics competition, including any media-rights or data-rights affiliate. (iv)Total annual compensation—means wages, salaries, stipends, allowances, incentive or performance bonuses, signing or retention bonuses, deferred compensation, employer retirement contributions above standard plan matches, severance, buyouts, cancellation or mitigation payments, in-kind compensation, appearance fees, debt servicing, debt relief, and any other compensation paid by or through a related organization (including a foundation, booster organization, media arm, or affiliate) or a third party under an arrangement to perform services for the institution..

4. Liability limitation Adoption of, agreement to, compliance with, or enforcement of any rule, regulation, requirement, standard, or other provision established pursuant to, or in compliance with, section 3 of this Act shall be treated as lawful under the antitrust laws and any similar State provision having the force and effect of law. The term antitrust laws in sub-paragraph (a) has the meaning given such term in the 1st section of the Clayton Act (15 U.S.C. 12) and 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.