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SB 1662

Education, Higher - As introduced, creates the public institution athletic program fund, which consists of proceeds from a fee paid by vendors registered with the sports wagering council; authorizes the Tennessee higher education commission to award grants from the fund to public institutions to assist with expenses for recruiting intercollegiate athletes. - Amends TCA Title 4, Chapter 49; Title 9 and Title 49.

114th Regular Session (2025-2026) Introduced by Todd Gardenhire

Creates a Public Institution Athletic Program Fund funded by a 25% vendor fee on SWC revenue-sharing, to grant THEC-supported recruiting expenses for Tennessee public universities.

Deferred to Summer Study
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Bill Summary · SB 1662

Summary of SB 1662 / HB 1945 (Session 114, Tennessee)

Purpose and Intent

  • Establishes a dedicated funding mechanism, the Public Institution Athletic Program Fund, to assist Tennessee public higher education institutions with eligible recruiting expenses for intercollegiate athletes.
  • The fund is funded by a new vendor fee tied to the sports wagering framework.

Key Provisions

New Public Institution Athletic Program Fund

  • Created as a special account in the state treasury to support recruiting expenses for intercollegiate athletic programs at public institutions.
  • Administered by the Tennessee Higher Education Commission (THEC).

Funding Source and Fee

  • A vendor registered with the Sports Wagering Council (SWC) must pay the council a fee equal to 25% of all compensation and payments the vendor receives from a licensee under a revenue-sharing agreement.
  • The fee must be paid within 30 days after the vendor receives the compensation or payment.
  • Fees collected are deposited into the Public Institution Athletic Program Fund.

Confidentiality

  • Vendors and licensees must provide necessary information to support the fee calculation. This information is confidential and not subject to public inspection.

Eligible Recruiting Expenses

  • Defines eligible recruiting expenses as costs incurred by a public institution or its athletic program for recruiting intercollegiate athletes.
  • Eligible expenses include lodging, meals, telephone use, transportation for recruits and recruiting staff, official/unofficial visits, recruiting materials, videos, and mass mailings.
  • Excludes payments or other remuneration provided to intercollegiate athletes themselves.

Eligible Institutions and Scope

  • Applies to public four-year institutions in Tennessee that compete in at least three intercollegiate sports in an academic year.
  • Excludes institutions governed by the Board of Regents of the State University and Community College System.

Grant Administration and Distribution

  • THEC can award grants to public institutions to cover eligible recruiting expenses.
  • Administrative expenses for THEC are capped at 5% of each grant.
  • THEC must develop a grant distribution formula based on:
    • The number of full-time equivalent (FTE) undergraduate students at each institution.
    • Inverse enrollment weighting, giving higher grant amounts to smaller institutions and lower amounts to larger ones.
  • Priority for grant awards is given to the six locally governed state universities.
  • THEC may establish grant application procedures.

Reporting and Oversight

  • THEC must submit a report by December 31, 2026, and annually thereafter, detailing:
    • Fund balances (obligated and unobligated).
    • Grants awarded, including recipient institutions, grant amounts, and impact on recruiting capabilities and national competitiveness.

Effective Dates

  • The act takes effect upon becoming law for rulemaking purposes.
  • For all other purposes, it takes effect July 1, 2026.

Potential Impact

  • Creates a new revenue stream to support recruiting for public higher education athletic programs, aiming to enhance competitiveness in intercollegiate sports.
  • Shifts some private/vendor revenue (via the 25% fee on revenue-sharing payments) to public higher education, via THEC-administered grants.
  • The exact annual funding level depends on SWC-registered vendor activity and how revenue-sharing arrangements evolve; fiscal note acknowledges uncertainty around timing and amounts.
  • Administrative duties and one full-time program director position are anticipated to manage fund administration and reporting, funded initially from the General Fund if vendor revenues are insufficient.

Summary in One Sentence

SB 1662 / HB 1945 creates the Public Institution Athletic Program Fund, financed by a 25% vendor fee from SWC-revenue-sharing agreements, to provide THEC-administered grants supporting eligible intercollegiate recruiting expenses for Tennessee public institutions, with a prioritization for the six locally governed state universities and a structured annual reporting requirement.

Compiled from official sources — confirm details with the bill’s official record.

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