Education, Higher

Plain English Breakdown

The official source material does not specify what happens if administrative expenses exceed 5% of a grant awarded.

Tennessee Public Institution Athletic Program Fund Act

This bill establishes a fund to support intercollegiate athletic recruiting expenses at Tennessee's public institutions by collecting fees from sports gaming vendors and distributing grants.

What This Bill Does

• Requires sports gaming vendors to pay a fee of 25% of their revenue sharing agreement payments to the Sports Wagering Council, which will be deposited into the Public Institution Athletic Program Fund.
• Establishes the Public Institution Athletic Program Fund in the state treasury to assist public institutions and their athletic programs with eligible recruiting expenses.
• Authorizes the Tennessee Higher Education Commission to award grants from this fund to public institutions for recruiting intercollegiate athletes, prioritizing six locally governed state universities.
• Requires the commission to develop a formula for distributing grants based on the number of full-time equivalent undergraduate students at each institution, favoring those with fewer enrolled students.

Who It Names or Affects

• Sports gaming vendors who must pay fees into the Public Institution Athletic Program Fund.
• Public institutions that compete in at least three intercollegiate sports and can receive grants from the fund to support recruiting expenses.
• The Tennessee Higher Education Commission, which will manage the fund and distribute grants.

Terms To Know

Vendor

A person who provides services related to interactive sports wagering, such as geolocation services or payment processing.

Eligible recruiting expenses

Expenses incurred by public institutions for the recruitment of intercollegiate athletes, excluding payments made directly to athletes for their name, image, or likeness.

Limits and Unknowns

• The exact amount of revenue that will be generated from vendor fees and how it will affect the fund is uncertain due to multiple unknown variables.
• Administrative expenses of the commission must not exceed 5% of a grant awarded but does not specify what happens if this limit is exceeded.

Official Summary Text

This bill requires a
vendor
as defined under the Tennessee Sports Gaming Act to
pay the
sports wagering
council
("council")
a fee in an amount equal to 25% of all compensation and payments received by the vendor from a licensee pursuant to a revenue sharing agreement. A vendor
must
pay the council no later than 30 days after the vendor receives the compensation or payment from a licensee pursuant to a revenue sharing agreement. The payments must be deposited into the public institution athletic program f
und to support this state's public institutions and their athletic programs.

This bill requires each
vendor and licensee
to
provide all necessary information to support the fee as
so
provided to the council.
I
nformation
so
provided to the council must be kept confidential due to the proprietary nature of such information and must not be open to public inspection
.

"VENDOR" DEFINED

The Tennessee Sports Gaming Act defines a "vendor" as a person who meets one or more of the following criteria:



Provides geolocation services
,
online sports wagering platform software
,
patron account management services/software
,
sportsbook risk management or odds-making services or software
,
sports data feeds or software
,

"
Know your customer
"
or
"
KYC
"
software or services
,
or

payment processing services
.


Serves as an independent testing laboratory to assess interactive sports wagering platforms, integrity or security
.


Has direct interface or interaction with patron accounts or interactive sports wagering platforms, as determined by the council
.


Receives payment or compensation based on a revenue sharing agreement in which the vendor receives a percentage of the adjusted gross income of a licensee
.


Provides similar services that are material to conducting interactive sports wagering, as determined by the council
.

However, a

"v
endor
"
does not include marketing affiliates who are compensated by a method other than a revenue sharing agreement
.

GRANT PROGRAM

This bill authorizes the Tennessee higher education
commission
("commission")

to
award grants to public institutions to assist with eligible recruiting expenses.
However, a
dministrative expenses of the commission must not exceed 5% of a grant awarded.
As used in this bill, a "public institution" means
a four-year public institution of higher education located in this state that competes in at least
three
intercollegiate sports in an academic yea
r, but does
not include an institution of higher education g
overned by the board of regents of the state university and community college system.

This bill requires the
commission
to
develop a formula for distributing the grants among public institutions that
meets the following criteria:



The formula d
etermines the number of full-time equivalent undergraduate students enrolled as students at each public institution
.



The formula u
tilizes inverse enrollment weighting, with public institutions with fewer enrolled students receiving higher grant amounts and public institutions with more enrolled students receiving lower grant amounts.

This bill requires the
commission
to
prioritize awarding grants to the
six
locally governed state universities and
to
establish procedures for grant applications.

Public Institution Athletic Program Fund

This bill establishes a
special account in the state treasury to be known as the public institution athletic program fund
(
"fund"
), which must be
administered by the Tennessee higher education commission
("commission"),
to assist public institutions and their athletic programs with eligible recruiting expenses.
As used in this bill, "e
ligible recruiting expenses"
m
eans all expenses that a public institution or its athletic program incurs attributable to the recruitment of intercollegiate athletes
. Howeve
r, such term d
oes not include payments, benefits, or other forms of remuneration that are provided to an intercollegiate athlete
for
use of intercollegiate athlete's name, image, or likeness.

This bill provides that t
he fund consists of monies derived from the fee as
described above
deposited into the fund. The commission may
also
accept other funds, public or private, by way of gift or grant to the fund.
This bill requires m
oneys in the fund
to
be used by the commission to administer and distribute grants
as described below.

Rulemaking

This bill authorizes the
commission
to
adopt rules necessary for the administration of
the grant program.

Annual Report

This bill requires the
commission
to
submit a report to the speakers of the house of representatives and the senate, the chair
s
of
legislative committees
having jurisdiction over education matters, and the legislative librarian, no later than December 31
of each year
, regarding the commission's administration of the fund. The report must include the obligated and unobligated balances of the fund as of June 30 of the reporting calendar year and the grants awarded in the immediately preceding fiscal year.
Grant information must include the amount of the grant awarded, the recipient of the grant, and the impact the grants have had on the recipient's ability to attract talented intercollegiate athletes and compete nationally.

Current Bill Text

SENATE BILL 1662
By Gardenhire

HOUSE BILL 1945
By Love
HB1945
009227
- 1 -

AN ACT to amend Tennessee Code Annotated, Title 4,
Chapter 49; Title 9 and Title 49, relative to funding
for intercollegiate athletic programs.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Title 4, Chapter 49, Part 1, is amended by
adding the following as a new section:
(a) A vendor shall pay the council a fee in an amount equal to twenty-five
percent (25%) of all compensation and payments received by the vendor from a licensee
pursuant to a revenue sharing agreement. A vendor shall pay the council no later than
thirty (30) days after the vendor receives the compensation or payment from a licensee
pursuant to a revenue sharing agreement. The payments must be deposited into the
public institution athletic program fund established by § 49-7-3202 to support this state's
public institutions and their athletic programs.
(b) Each vendor and licensee shall provide all necessary information to support
the fee as provided in subsection (a) to the council. Information provided to the council
pursuant to this subsection (b) must be kept confidential due to the proprietary nature of
such information and must not be open to public inspection pursuant to title 10, chapter
7.
SECTION 2. Tennessee Code Annotated, Title 49, Chapter 7, is amended by adding
the following as a new part:
49-7-3201. As used in this part:
(1) "Athletic program" means an intercollegiate athletic program at a public
institution;

- 2 - 009227

(2) "Commission" means the Tennessee higher education commission;
(3) "Eligible recruiting expenses":
(A) Means all expenses that a public institution or its athletic program
incurs attributable to the recruitment of intercollegiate athletes;
(B) Includes expenses for lodging, meals, telephone use, and
transportation for both recruits and personnel engaged in recruiting, other
expenses for official and unofficial visits, and expenses for printing recruiting
materials, creating recruiting videos, and mass mailings; and
(C) Does not include payments, benefits, or other forms of remuneration
that are provided to an intercollegiate athlete pursuant to § 49-7-2802(a);
(4) "Intercollegiate athlete" means:
(A) A student who is enrolled in a public institution and participates in an
athletic program; or
(B) A prospective student who has started or completed ninth grade and
can, in the future, enroll in a public institution and participate in an athletic
program;
(5) "Intercollegiate sport" means a sport played at the collegiate level for which
eligibility requirements for participation by an intercollegiate athlete are established by an
athletic association as defined in § 49-7-2801; and
(6) "Public institution":
(A) Means a four-year public institution of higher education located in this
state that competes in at least three (3) intercollegiate sports in an academic
year; and
(B) Does not include an institution of higher education governed by the
board of regents of the state university and community college system.

- 3 - 009227

49-7-3202.
There is established a special account in the state treasury to be known as the
"public institution athletic program fund," hereinafter referred to as the "fund" to assist
public institutions and their athletic programs with eligible recruiting expenses. The fund
must be administered by the Tennessee higher education commission.
49-7-3203.
(a) The fund consists of monies derived from the fee as provided in SECTION 1
deposited into the fund. The commission may accept other funds, public or private, by
way of gift or grant to the fund. Any such gift or grant must be deposited into the fund to
be expended in accordance with this part.
(b) Any unencumbered moneys and any unexpended balance of the fund
remaining at the end of a fiscal year must not revert to the general fund, but must be
carried forward until expended in accordance with this section.
(c) Moneys in the fund must be invested by the state treasurer pursuant to title 9,
chapter 4, part 6, for the benefit of the fund. Interest accruing on investments and
deposits of the fund must be credited to the fund, must be returned to the fund, and must
remain part of the fund.
(d)
(1) Moneys in the fund must be used by the commission to administer
and distribute grants authorized by this subsection (d).
(2) The commission may award grants to public institutions to assist with
eligible recruiting expenses. Administrative expenses of the commission must
not exceed five percent (5%) of a grant awarded.
(3) The commission shall develop a formula for distributing the grants
among public institutions that:

- 4 - 009227

(A) Determines the number of full-time equivalent undergraduate
students enrolled as students at each public institution; and
(B) Utilizes inverse enrollment weighting, with public institutions
with fewer enrolled students receiving higher grant amounts and public
institutions with more enrolled students receiving lower grant amounts.
(e) The commission shall prioritize awarding grants to the six (6) locally
governed state universities and shall establish procedures for grant applications.
49-7-3204.
The commission may adopt rules necessary for the administration of this part.
The rules must be promulgated in accordance with the Uniform Administrative
Procedures Act, compiled in title 4, chapter 5.
49-7-3205.
The commission shall submit a report to the speakers of the house of
representatives and the senate, the chair of the education committee of the senate, the
chair of the committee of the house of representatives having jurisdiction over education
matters, and the legislative librarian, no later than December 31, 2026, and each
December 31 thereafter, regarding the commission's administration of the fund. The
report must include the obligated and unobligated balances of the fund as of June 30 of
the reporting calendar year and the grants awarded in the immediately preceding fiscal
year. Grant information must include the amount of the grant awarded, the recipient of
the grant, and the impact the grants have had on the recipient's ability to attract talented
intercollegiate athletes and compete nationally.
SECTION 3. For the purpose of promulgating rules, this act takes effect upon becoming
a law, the public welfare requiring it. For all other purposes, this act takes effect July 1, 2026,
the public welfare requiring it.