The bill authorizes the Secretary of Transportation to create a nonprofit corporation under New York law, wholly owned by the United States, to support the athletic programs of the United States Merchant Marine Academy (USMMA). The corporation would operate as a 501(c)(3), enter contracts and cooperative agreements (including limited sole‑source contracts), lease academy real property for up to five years, accept gifts and licensing revenue, and retain and expend funds to benefit USMMA athletics.
This matters because it creates an off‑budget, government‑owned vehicle to commercialize and finance academy athletics—permitting trademark licensing and sponsorships and enabling transfers of certain nonappropriated fund assets—while layering federal oversight, procurement exceptions, and ethical limits onto an entity that will engage with private donors and corporate partners.
At a Glance
What It Does
The bill lets the Secretary form a DOT‑controlled nonprofit that is a 501(c)(3) and the exclusive owner of its stock, authorizes that entity to sign contracts and cooperative agreements (including specified sole‑source contracts), lease academy property, and enter licensing and sponsorship deals for academy trademarks under amended 49 U.S.C. 109(h). It authorizes transfers of certain nonappropriated fund instrumentality assets to the corporation and allows the Secretary to accept funds from NCAA, athletic conferences, game guarantees, ticketing and licensing revenue, and other sources.
Who It Affects
Directly affected parties include the United States Merchant Marine Academy (its athletic department and cadets), the Department of Transportation and its employees (who may sit on the corporation board in official capacities), private sponsors and licensees seeking marks or sponsorships, and contractors who may enter sole‑source agreements with the corporation. GSA and academy facility managers will be involved for any leases of academy real property.
Why It Matters
The bill creates a hybrid public‑charitable vehicle that channels private and commercial revenue into academy athletics while keeping ownership and oversight under the Secretary of Transportation. That combination changes how federal property, procurement exceptions, and trademark income can be used to fund a federal service academy’s extracurricular programs.
More articles like this one.
A weekly email with all the latest developments on this topic.
What This Bill Actually Does
The bill authorizes the Secretary of Transportation to establish a nonprofit corporation under New York law whose stock the United States will wholly own and the Secretary will vote. The corporation must operate exclusively for charitable, educational, and civic purposes to support USMMA athletics and is organized as a 501(c)(3) for tax purposes.
Organizing under state law plus federal ownership creates a government‑owned nonprofit designed to receive private support and commercial revenue while remaining under Secretary oversight.
Board governance is tightly constrained: directors serve without pay (aside from reasonable travel and related expenses), and DOT employees may serve in their official capacities solely to provide oversight and advice rather than run day‑to‑day operations; DOT employees are limited to no more than one‑third of board seats. The Secretary may enter into contracts and cooperative agreements on the corporation’s behalf, and the bill explicitly permits certain sole‑source contracts consistent with 41 U.S.C. 3304(a).
Cooperative agreements may be used to acquire property, services, or travel for USMMA benefit notwithstanding the usual limitations under 31 U.S.C. chapter 63.For facilities, the Secretary (in consultation with GSA) may lease academy real property to the corporation for periods up to five years so long as the property is not required for immediate academy use and proceeds are handled under the law’s spending rules. The Secretary may provide limited support services (utilities, office furnishings, communications, records staging, audio/video, and security systems) when essential, but the statute disclaims any resulting liability for the United States.The bill allows the Secretary to transfer to the corporation assets and liabilities of a Department of Transportation nonappropriated fund instrumentality that supports USMMA athletics—bank accounts, reserves, equipment and supplies—but explicitly prohibits transferring interests in real property.
It also amends 49 U.S.C. 109(h) so the Secretary can license USMMA trademarks, retain licensing fees, and use those fees to pay program costs and, when fees exceed certain needs, to fund academy recruiting; retained fees remain available until expended. Finally, the Secretary may accept funds from the NCAA, athletic conferences, game guarantees, ticketing and licensing, and other considerations, provided contributions do not reflect unfavorably on DOT’s integrity or create the appearance of compromised programs or individuals.
The Five Things You Need to Know
The corporation must be organized as a 501(c)(3) under New York law and all its stock will be owned and voted by the United States through the Secretary of Transportation.
DOT employees may serve on the corporation’s board in their official capacities but may not hold more than one‑third of board seats and may not be compensated for board service beyond travel and related expenses.
The Secretary may lease USMMA real property to the corporation for terms up to five years, provided the property is not needed for immediate academy use and proceeds are retained under the statute.
The bill allows transfers of assets and liabilities from a DOT nonappropriated fund instrumentality to the corporation—including bank accounts and equipment—but expressly forbids transferring any interest in real property.
Amendment to 49 U.S.C. 109(h) authorizes the Secretary to license USMMA trademarks, retain licensing fees to cover program and licensing costs, and use excess fees for academy recruiting; retained fees are available until expended.
Section-by-Section Breakdown
Every bill we cover gets an analysis of its key sections.
Short title
States the Act may be cited as the 'USMMA Athletics Act of 2026.' This is purely formal but identifies the statute for later reference and codification.
Authorizes DOT to create a government‑owned nonprofit to support athletics
Gives the Secretary authority to form a corporation under New York law whose sole stockholder is the United States, and requires the corporation to operate exclusively for charitable, educational, and civic purposes supporting USMMA athletics. Practically, this sets up a government‑owned private vehicle that can accept gifts, sponsorships, and commercial revenue intended to benefit a federal academy.
501(c)(3) status and limits on board compensation and composition
Requires the corporation to organize as a 501(c)(3) and follow New York incorporation law, its articles, and bylaws. Board members cannot be paid (other than reasonable travel/related expenses), and DOT employees may serve in official capacities only to provide oversight and not run daily operations; DOT employees are capped at one‑third of directors. That creates a governance perimeter intended to preserve federal control while enabling private operational input.
Contracting flexibilities, including limited sole‑source authority
Authorizes the Secretary to enter the corporation into contracts and cooperative agreements to support athletics. It explicitly permits sole‑source contracting notwithstanding 41 U.S.C. 3105, subject to 41 U.S.C. 3304(a), and allows cooperative agreements to be used to acquire property, services, or travel notwithstanding chapter 63 of title 31. Those provisions lower procurement barriers for certain transactions but tie them to specific statutory exceptions.
Temporary leasing of academy property and defined support services
Permits the Secretary, in consultation with GSA, to rent or lease USMMA real property to the corporation for up to five years if the property is not needed for immediate academy use, and requires proceeds to be retained for statutory uses. The Secretary may provide essential support services (utilities, furnishings, communications, records staging, A/V, security), but the statute disclaims any resulting U.S. liability. Those clauses ease campus logistics for the corporation but keep limiting steps (consultation with GSA, five‑year cap).
Transfers from nonappropriated fund instrumentality and acceptance of commercial funds
Allows the Secretary to transfer title to assets and liabilities of DOT nonappropriated fund instrumentalities that support USMMA athletics (bank accounts, equipment, supplies), but not interests in real property. It authorizes accepting funds from NCAA, athletic conferences, game guarantees, ticketing/licensing revenue, and other considerations, subject to safeguards preventing contributions from compromising or appearing to compromise DOT integrity.
Licensing authority for USMMA marks and amendment to 49 U.S.C. 109(h)
Grants the corporation authority (with Secretary approval) to enter licensing, marketing, and sponsorship agreements for USMMA trademarks, subject to limits preventing deals that reflect unfavorably on DOT or compromise program integrity. The bill amends 49 U.S.C. 109(h) to expressly permit the Secretary to license marks, designate which marks are covered, retain fees to cover trademark and program costs, and, if fees exceed needs, use excess funds for recruiting—fees remain available until expended. This creates a statutory revenue stream tied directly to branding and commercial activity.
This bill is one of many.
Codify tracks hundreds of bills on Education across all five countries.
Explore Education in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- USMMA athletic programs and cadets — gain a dedicated revenue vehicle for equipment, travel, facilities, recruiting, and program support without requiring annual appropriations.
- Alumni, boosters, and private donors — receive a direct, tax‑exempt conduit (a 501(c)(3)) to target gifts and sponsorships to athletics with potentially clearer stewardship and tax treatment.
- Private sponsors and licensees — obtain an authorized counterpart for trademark licensing and sponsorship agreements subject to Secretary approval, opening commercial partnerships and branded merchandising.
- The Academy’s recruiting and marketing functions — can be supplemented by retained licensing fees earmarked for recruiting under the amended 49 U.S.C. 109(h).
Who Bears the Cost
- Department of Transportation — must provide oversight, manage approvals, consult with GSA on leases, and monitor ethics and conflicts, increasing administrative responsibilities and reputational risk.
- General Services Administration and academy real‑property managers — must handle leasing reviews and negotiate terms for short‑term leases and facility use.
- Competing contractors and vendors — may lose bidding opportunities where the corporation or its agreements rely on sole‑source authority or cooperative agreements that bypass standard competitive procurement.
- Nonappropriated fund instrumentalities and their stakeholders — transferring bank accounts and reserves to the corporation could shift where funds are held and how they are audited, affecting existing financial controls and staff managing those funds.
- Taxpayers and oversight bodies — bear the accountability burden if commercial relationships create conflicts or require remedial action, since the vehicle blends public ownership with private fundraising.
Key Issues
The Core Tension
The central dilemma is balancing resource generation against institutional integrity: the bill channels private and commercial money to address athletic funding shortfalls, but doing so through a government‑owned nonprofit, procurement exceptions, and trademark commercialization increases risks of undue influence, conflicts, and reduced transparency—trading financial flexibility for potential erosion of public control and accountability.
The bill creates a hybrid structure that is government owned but organized as a private 501(c)(3). That hybrid raises several implementation and accountability questions: which transparency rules and audits apply; how federal ethics rules govern DOT employees who serve on the board; and how to reconcile federal procurement law with the cooperative agreement and sole‑source exceptions the bill authorizes.
The statute attempts to limit pay for directors and to cap DOT representation on the board, but it leaves open how the Secretary will operationalize conflict mitigation when commercial sponsors and licensees engage directly with academy programs.
The procurement and property provisions present tradeoffs. Allowing sole‑source contracts subject to 41 U.S.C. 3304(a) and permitting cooperative agreements to acquire services or travel can speed deals and simplify support, but they reduce competitive safeguards and documentation that normally protect public funds.
Leasing campus property for up to five years gives operational flexibility but risks creating overlapping uses or expectations about long‑term access to federal property. The trademark licensing amendment creates a direct revenue stream but also requires careful brand control and vetting to avoid reputational harm to a federal academy.
Try it yourself.
Ask a question in plain English, or pick a topic below. Results in seconds.