North Carolina Bill Aims to Block NCAA Tax Breaks

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By Andrew M. Ballard

North Carolina lawmakers have filed a bill that challenges the tax exempt status of two major intercollegiate athletic associations.

Under H.B. 328, filed late March 13, the state Legislature would submit a complaint with the IRS against both the National Collegiate Athletic Association (NCAA) and the Atlantic Coast Conference (ACC), alleging the two groups “engaged in excessive lobbying activities” that violated their status.

The pending measure, submitted just before the NCAA backetball tournaments kick off, was crafted by Republican lawmakers in response to sanctions the athletic associations imposed on North Carolina due to the enactment of its controversial “bathroom bill,” also known as H.B. 2. Among other things, the 2016 state law limits transgender individuals’ access to public bathrooms and other facilities.

Out of Bounds?

According to H.B. 328, the NCAA and ACC “have exceeded the scope of their respective charters by using economic retaliation” against North Carolina through scheduling of athletic events. The associations are trying to force state lawmakers “to adopt social legislation” unrelated to their core missions, the legislation asserts.

Last September, the NCAA relocated several championship events to other states because it said the law was discriminatory. The ACC said it would relocate “neutral site championships” from North Carolina for the current academic year as well. And first round games this week in the NCAA basketball tournament were moved to South Carolina.

In his March 13 state-of-the-state address, recently elected Gov. Roy Cooper (D) renewed his call for lawmakers to repeal the law or reach a compromise in the matter that is non-discriminatory. Pressure for such action is mounting as North Carolina faces additional cancellations of major sporting events, concerts and business expansion in the state.

Rejection Sought

Amy Yakola, ACC’s chief of external affairs, told Bloomberg BNA that the conference has previously issued statements calling H.B. 2 inconsistent with its values and urging its repeal.

In a Feb. 25 statement provided by Yakola, John Swofford, the ACC commissioner, said he was encouraged that a bipartisan effort had been launched to resolve the issue. “If legislation is passed that resets the law as it was prior to HB2, it will present the opportunity to reopen the discussion with the ACC Council of Presidents regarding neutral site conference championships being in the state of North Carolina,” he said.

“The NCAA has not lobbied North Carolina lawmakers,” the group told Bloomberg BNA in a March 14 email. “All conversations that we’ve had with representatives in the state have been designed to provide information about our championships process and timeline, not take positions on legislation. When the Board of Governors moved championships from North Carolina last year, it was a clear response to state laws that local communities admitted would make it difficult to assure that our events could be held in an environment that was safe, healthy, and free from discrimination for all those watching and participating in our events. Our constitution and values commit us to respecting the dignity of every person. Our decisions reflect those values and our principles have not changed.”

H.B. 328 also would require state colleges and universities to provide information about their employees’ engagement in matters involving participation in athletic associations.

To contact the reporter on this story: Andrew M. Ballard in Raleigh, N.C. at aballard@bna.com

To contact the editor responsible for this story: Ryan C. Tuck at rtuck@bna.com

For More Information

Copies of H.B. 328 is available at http://src.bna.com/mWH.

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