Senate Bill 563, titled “The Michael Jordans of Tomorrow Act,” would substantially expand North Carolina’s rules governing name, image, and likeness (NIL) activity for student-athletes. The bill authorizes constituent institutions of the University of North Carolina to help student-athletes secure NIL deals by making introductions, offering education and contract review, and partnering with businesses and collectives, while prohibiting direct compensation tied to athletic performance or participation under that assistance provision. It also creates a separate framework allowing constituent institutions to directly compensate student-athletes for participation in interscholastic athletics, with a proposed annual cap of $20.5 million per institution from athletics-related revenues, private donations, and NIL collective donations.
The bill also creates a state tax incentive structure around NIL. It would allow student-athletes to deduct certain NIL compensation from North Carolina taxable income and would give eligible businesses a nonrefundable income tax credit equal to 50% of compensation paid under NIL agreements, capped at $500,000 per business per year. These tax provisions are intended to encourage business participation in NIL deals and make North Carolina schools more competitive in recruiting and retaining athletes. The tax credit portion would apply to taxable years beginning on or after January 1, 2026.
In addition, the bill establishes a North Carolina NIL Advancement Fund within the UNC system to provide matching funds with NIL collectives, and it directs institutions to prioritize support for in-state tuition-eligible athletes, athletes who have committed to the institution, and NIL agreements involving local businesses and tourism boards. It also creates a statewide NIL Clearinghouse administered by the Department of Commerce to educate families, review higher-value NIL agreements, and provide grants to student-athletes who commit to in-state colleges. The bill appropriates $10 million in nonrecurring General Fund money to the Department of Commerce for this program.
For high school students, the bill would allow participation in NIL agreements subject to restrictions, including parental involvement for minors, financial literacy resources, and filing agreements with the NIL Clearinghouse. It also gives students who sign a binding commitment to attend an accredited North Carolina college or university eligibility for state-endorsed NIL grants, sponsorships, and priority partnerships. Finally, the bill creates a legislative study committee to examine NIL revenue-sharing models and recommend future legislation, signaling that the General Assembly views this area as still evolving.
Overall, the bill’s apparent goal is to make North Carolina more competitive in the NIL marketplace by combining institutional support, direct compensation authority, tax incentives, and state-administered oversight. Because no committee transcripts or votes were provided, there is no recorded legislative debate or voting history to indicate support or opposition. Based on the bill text alone, the measure appears designed to attract and retain student-athletes, but it also raises policy questions about the role of public institutions in athlete compensation, the use of state funds, and the fairness and administration of NIL-related benefits.
The bill would amend Chapter 116 to authorize UNC constituent institutions to assist with NIL deals and to directly compensate student-athletes under a new statutory framework, while also amending Chapter 115C to permit NIL agreements for high school athletes under specified safeguards. It would further amend Chapter 105 to create a deduction for certain NIL compensation and a new tax credit for eligible businesses paying student-athletes, and it would add a new Department of Commerce-administered NIL Clearinghouse under Chapter 143B. The bill also appropriates $10 million in nonrecurring General Fund money and establishes a temporary legislative study committee on NIL revenue sharing.
The bill’s stated purpose and structure suggest a generally supportive and expansionary sentiment toward NIL opportunities for student-athletes, with an emphasis on competitiveness, recruitment, and retention. The findings section frames current NIL policy as placing North Carolina at a disadvantage relative to other states, and the bill responds by creating incentives and state support mechanisms. Because no committee discussion or votes are included, there is no documented opposition or support beyond the bill’s pro-NIL design and policy rationale.
The main points of contention likely center on the bill’s authorization of direct compensation by public institutions, the size and source of the proposed $20.5 million annual compensation cap, and the use of state funds and tax credits to subsidize NIL activity. Another likely issue is the Department of Commerce’s role in reviewing agreements over $5,000 and awarding grants, which raises questions about administrative burden, fairness, and state oversight of private compensation arrangements. The bill also creates potential tension over prioritizing in-state athletes, committed recruits, and local business partnerships, which may be viewed as beneficial state policy by supporters but as preferential treatment or market intervention by critics.