Arkansas panel passes bill allowing colleges to directly pay student athletes

Representative Shepherd introduced House Bill 1917 on behalf of Arkansas institutions of higher education, telling the committee HB 1917 "amends the Arkansas student athlete publicity rights act" and "allows for institutions to directly pay student athletes." The committee voted to pass the bill by voice vote.

The bill, as explained by Shepherd and by Matt McCoy, senior associate general counsel for the University of Arkansas system for athletics, would permit colleges and universities to make direct payments to student athletes for name, image and likeness (NIL) uses and would include related provisions: a limited state tax exemption for certain payments, a clarification that student athletes are not state employees, protections of institutional immunities, and limited liability protections for coaches. McCoy told the committee many of the bill's provisions are intended to allow Arkansas institutions to comply with terms in ongoing federal litigation and a proposed settlement in the Northern District of California involving the NCAA.

Why it matters: Supporters said the bill is a state-level response to changes at the national level that they said will require institutions to provide payments and revenue-sharing to athletes to remain competitive. Representative Shepherd said the measure would help Arkansas universities "be competitive on the new landscape of intercollegiate athletics." Coaches and athletic directors from the state's public universities testified in favor, saying the change would bring parity with peer programs and simplify payment administration.

Discussion focused on mechanics and the bill's legal limits. Representative Richardson asked whether athletes paid directly by institutions could still be considered nonemployees; McCoy replied that litigation on the employee question is pending in federal court and that HB 1917 treats the payments as compensation for publicity rights rather than wages. Representative Wooden pressed for details about how much institutional revenue might be paid; Shepherd and McCoy cited a pending settlement figure discussed nationally and noted that the federal settlement under consideration would allow institutions to pay up to roughly $20.5 million in aggregate under the proposed terms.

Coaches Sam Pittman (University of Arkansas) and Butch Jones (Arkansas State) testified in support, saying direct institutional payments and revenue-sharing would restore competitiveness and create more transparent, committee-reviewed payments rather than unregulated outside collectives. Pittman said allowing institutions to control and timely distribute payments would reduce recruiting distortions and argued the changes would "help the quality of life of the student athletes and the coaches" and promote equality among programs.

Outcome and next steps: The committee approved the bill on a voice vote (motion to pass by Representative Lademan). The committee did not record a roll-call tally in the transcript excerpt. The bill's text and proponents say the measure is intended to mirror or allow compliance with anticipated rules and settlements at the national level; McCoy and Shepherd cautioned further federal or appellate decisions could require future state changes.

Ending: With testimony from athletic directors and coaches from multiple Arkansas campuses, supporters told the committee HB 1917 is intended to reduce administrative friction, limit risks to athletes from unlicensed agents and give Arkansas institutions the legal tools to participate in the changing NIL landscape. The committee passed the bill and proponents said they may need to return for further adjustments depending on outcomes in the federal litigation.