[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 yea