Senate committee advances bill allowing Kentucky universities to participate in federal NIL settlement

Senate Bill 3, legislation to update Kentucky law on student-athlete compensation and university participation in emerging revenue-sharing models, passed the Senate Standing Committee on Education after testimony from athletic directors and university officials.

The bill’s sponsor, State Senator Max Wise, introduced the measure on behalf of the bill’s supporters, saying SB 3 would align Kentucky law with anticipated national standards and allow institutions to sublicense athletes’ name, image and likeness (NIL) and enter contracts that directly compensate student athletes. “At its core, Senate Bill 3 is about empowering student athletes, maintaining universities’ competitiveness, and reaffirming Kentucky’s leadership in college athletics,” Wise said.

Why it matters: proponents told the committee the legal landscape for college athletics is changing rapidly because of a pending federal settlement and litigation. The committee heard that a proposed federal settlement stemming from litigation against the NCAA could permit universities to directly compensate athletes; bill proponents said Kentucky must update state law now so its institutions can implement any national system without delay.

Mitch Barnhart, Director of Athletics at the University of Kentucky, said the bill would give athletic departments flexibility to navigate the settlement and future federal guidance while protecting student-athlete opportunities. “We’ll still have, with roster changes and all of those things, well over 500 student athletes that we’re representing and that are counting on us to give them the best opportunity they can,” Barnhart said. Josh Hurd, Athletic Director at the University of Louisville, echoed that institutions need clear legal guardrails as the landscape evolves.

SB 3’s stated provisions include permitting institutional sublicensing of NIL, expanding earning opportunities for student-athletes, and establishing reporting thresholds for deals (the bill would require student-athletes to report deals that exceed $600). Sponsors told the committee the measure contains an emergency clause so it would take effect immediately upon passage.

Committee members questioned how the bill might affect transfer portal activity and whether contractual institutional agreements could reduce “portal hopping.” Barnhart and Hurd said the settlement and the bill could help create tighter transfer windows and guardrails, but that many details — including whether contracts will be national or institution-specific — remain under national negotiation.

Action: The committee moved and seconded the bill and conducted a roll call vote. Senators present during the vote included Carroll, Givens, Higdon, Meredith, Neal, Rawlings, Reid, Thomas, Tishner, Williams, Wilson, Wise and Chair West; the committee recorded unanimous approval. The committee report states the bill passed with favorable (federal) expression.

What’s next: SB 3 will move to the full Senate for further consideration. Sponsors said the committee-level endorsement is timed to allow athletic departments and university staffs to prepare for expected developments at the national level.

Sources: Committee testimony by State Senator Max Wise; testimony by Mitch Barnhart, Director of Athletics, University of Kentucky; testimony by Josh Hurd, Athletic Director, University of Louisville.