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108th Congress Rept. 108-24
HOUSE OF REPRESENTATIVES
1st Session Part 1
SPORTS AGENT RESPONSIBILITY AND TRUST ACT
March 5, 2003.--Ordered to be printed
Mr. Tauzin, from the Committee on Energy and Commerce, submitted the
R E P O R T
[To accompany H.R. 361]
[Including cost estimate of the Congressional Budget Office]
The Committee on Energy and Commerce, to whom was referred
the bill (H.R. 361) to designate certain conduct by sports
agents relating to the signing of contracts with student
athletes as unfair and deceptive acts or practices to be
regulated by the Federal Trade Commission, having considered
the same, report favorably thereon with amendment and recommend
that the bill do pass.
Purpose and Summary.............................................. 1
Background and Need for Legislation.............................. 2
Committee Consideration.......................................... 3
Committee Votes.................................................. 3
Committee Oversight Findings..................................... 3
Statement of General Performance Goals and Objectives............ 3
New Budget Authority, Entitlement Authority, and Tax Expenditures 3
Committee Cost Estimate.......................................... 3
Congressional Budget Office Estimate............................. 3
Federal Mandates Statement....................................... 5
Advisory Committee Statement..................................... 5
Constitutional Authority Statement............................... 5
Applicability to Legislative Branch.............................. 5
Section-by-Section Analysis of the Legislation................... 5
Changes in Existing Law Made by the Bill, as Reported............ 7
PURPOSE AND SUMMARY
The purpose of H.R. 361 is to designate certain conduct by
sports agents related to the signing of contracts to represent
student athletes as unfair and deceptive acts or practices to
be regulated by the Federal Trade Commission (FTC).
Additionally, H.R. 361 provides the states with the authority
to bring civil action against violators in a district court and
provides universities with a right of action against the
athlete agent for damages resulting from a violation of the
BACKGROUND AND NEED FOR LEGISLATION
The multimillion-dollar value of professional athlete
salaries, signing bonuses, and endorsement contracts has
resulted in a proliferation of unscrupulous practices by some
sports agents. Unscrupulous agents, or their representatives,
are willing to break the rules in order to sign promising
student athletes to an agency contract. Agents are willing to
do this because the fees that accompany the representation of a
professional athlete are considerable, and the consequences
that the agent will suffer in comparison to the athlete or
school are limited or non-existent.
Motivated largely by financial gain, unscrupulous agents
have gone to extreme measures to represent promising student
athletes with even a remote chance of becoming a professional
athlete. These agents, or their cohorts--often known as
``runners''--will use tactics including secret payments to the
athlete, undisclosed payments to the family or friends of the
athlete who may be in a position to influence the athlete,
unrealistic promises, and even pressuring the athlete. In some
cases, these agents have made the secret payments to student
athletes or their families, and then black-mailed them into
signing a contract with the threat that they would disclose the
infraction of collegiate rules and threaten the student
athlete's eligibility. These egregious acts go unpunished due
to the lack of a Federal law, disparate and sometime
ineffective state laws, and the absence of any laws in many
The effect of a student athlete entering into an agency
contract is generally a forfeiture of collegiate eligibility.
The college or university may also be subject to various
sanctions for violation of competition rules if contests were
played with ineligible athletes. If this occurs, the economic
impact to the school and the athlete can be substantial. Not
only can a student athlete lose a scholarship, the university
can be sanctioned with monetary penalties, loss of
scholarships, forfeiture of contests, and loss of television
Currently there is no Federal law that directly addresses
the actions of these agents. However, a majority of the states
have a law to regulate athlete agents and/or their conduct, but
to varying degree and specificity. Most recently the National
Conference of Commissioners on Uniform State Laws passed the
Uniform Athlete's Agent Act (UAAA) in 2000 to provide uniform
state laws addressing the conduct and practices of athlete
agents, including registration of agents. It has since been
adopted by sixteen states and introduced in the legislatures of
twelve others. Of the states that have not enacted the UAAA, 18
have existing athlete agent laws while sixteen have no law that
directly addresses athlete agent conduct. H.R. 361 will provide
remedies to protect student athletes and the educational
institutions, particularly in those states with no existing law
addressing athlete agent conduct.
The Committee on Energy and Commerce has not held hearings
on the legislation.
On Wednesday, January 29, 2003, the Full Committee on
Energy and Commerce met in open markup session and ordered H.R.
361 favorably reported to the House, without amendment, by a
voice vote, a quorum being present.
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee to list the record votes
on the motion to report legislation and amendments thereto.
There were no record votes taken in connection with ordering
H.R. 361 reported. A motion by Mr. Tauzin to order H.R. 361
reported to the House, without amendment, was agreed to by a
COMMITTEE OVERSIGHT FINDINGS
Pursuant to clause 3(c)(1) of rule XIII of the Rules of the
House of Representatives, the Committee has not held oversight
or legislative hearings on this legislation.
STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES
The goal of H.R. 361 is to define the prohibited conduct
employed by individuals to entice or solicit student athletes
to enter into an agency contract, whether it is a written or
oral agreement, as well as require written disclosure to the
student athlete prior to signing a contract and to the
educational institution after a contract has been entered.
NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX EXPENDITURES
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee finds that H.R.
361, the Sports Agent Responsibility and Trust Act, would
result in no new or increased budget authority, entitlement
authority, or tax expenditures or revenues.
COMMITTEE COST ESTIMATE
The Committee adopts as its own the cost estimate prepared
by the Director of the Congressional Budget Office pursuant to
section 402 of the Congressional Budget Act of 1974.
CONGRESSIONAL BUDGET OFFICE ESTIMATE
Pursuant to clause 3(c)(3) of rule XIII of the Rules of the
House of Representatives, the following is the cost estimate
provided by the Congressional Budget Office pursuant to section
402 of the Congressional Budget Act of 1974:
Congressional Budget Office,
Washington, DC, January 31, 2003.
Hon. W.J. ``Billy'' Tauzin,
Chairman, Committee on Energy and Commerce,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 361, the Sports
Agent Responsibility and Trust Act.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contacts are Ken Johnson
(for federal costs), Victoria Heid Hall (for the state and
local impact), and Paige Piper/Bach (for the private-sector
William J. Gainer
(For Barry B. Anderson, Acting Director).
H.R. 361--Sports Agent Responsibility and Trust Act
H.R. 361 would impose certain restrictions on contracts
between sports agents and student athletes. For example, the
bill would prohibit sports agents from soliciting such a
contract by making false promises or offering gifts. These new
rules would be enforced by the Federal Trade Commission (FTC)
through civil penalties and by the states.
CBO estimates that enacting H.R. 361 would not have a
significant impact on the federal budget. Based on information
from the FTC, CBO expects that enforcement of the bill would
occur mostly at the state level. Therefore, CBO expects that
any increase in civil penalties resulting from the enactment of
H.R. 361 would be insignificant. (Such penalties are recorded
in the budget as revenues). Similarly, we estimate that
implementing H.R. 361 would increase the FTC's costs by less
than $500,000 annually, assuming the availability of
H.R. 361 contains no intergovernmental mandates as defined
in the Unfunded Mandates Reform Act (UMRA) and would impose no
costs on state, local, or tribal governments.
H.R. 361 would impose private-sector mandates as defined by
UMRA on certain sports agents and student athletes. The bill
would prohibit a sports agent from providing anything of value
to a student athlete or anyone associated with the athlete
before entering into a contract. An agent also would be
required to provide a student athlete with a specific
disclosure document before entering into an agency contract and
could not predate or postdate such a contract. The bill would
require a student athlete, or the athlete's parents or legal
guardian if the student is under the age of 18, to sign the
disclosure document prior to entering into an agency contract.
In addition, the bill would require the sports agent and
student athlete to each inform the student's educational
institution within a specific time frame that the athlete has
entered into an agency contract. Based on information from
government sources, CBO estimates that the direct cost of those
mandates would fall well below the annual threshold established
by UMRA for private-sector mandates ($117 million in 2003,
adjusted annually for inflation).
The CBO staff contacts for this estimate are Ken Johnson
(for federal costs), Victoria Heid Hall (for the state and
local impact), and Paige Piper/Bach (for the private-sector
impact). The estimate was approved by Peter H. Fontaine, Deputy
Assistant Director for Budget Analysis.
FEDERAL MANDATES STATEMENT
The Committee adopts as its own the estimate of Federal
mandates prepared by the Director of the Congressional Budget
Office pursuant to section 423 of the Unfunded Mandates Reform
ADVISORY COMMITTEE STATEMENT
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
CONSTITUTIONAL AUTHORITY STATEMENT
Pursuant to clause 3(d)(1) of Rule XIII of the Rules of the
House of Representatives, the Committee finds that the
Constitutional authority for this legislation is provided in
Article I, section 8, clause 3, which grants Congress the power
to regulate commerce with foreign nations, among the several
States, and with the Indian tribes.
APPLICABILITY TO LEGISLATIVE BRANCH
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.
SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION
Section 1. Short title
Section 1 designates the legislation as the ``Sports Agents
Trust and Responsibility Act.''
Section 2. Definitions
Section 2 provides definitions for terms incorporated
throughout H.R. 361.
Section 3. Regulation of unfair and deceptive acts and practices in
connection with the contact between an athlete agent and a
Section 3 provides for the regulation of conduct between an
athlete agent and a student athlete. Subsection (a) defines
prohibited conduct for an athlete agent to engage in order to
solicit or recruit a student athlete to enter into an agency
contract. The legislation makes it unlawful for the athlete
agent to give materially false or misleading information, to
make materially false promises or representations, or to
provide anything of value to the student athlete or anyone
associated with the student athlete before he or she signs an
agency contract. Additionally, an athlete agent is prohibited
from entering into an agency contract with the student athlete
without providing the student the written disclosure proscribed
by the Act and from either predating or postdating the
Subsection (b) proscribes the terms of the disclosure
requirements the athlete agent must provide to the student
athlete, or to the student athlete's parent or guardian, and
requires the signature of the student athlete, or the student
athlete's parent or guardian, prior to entering into the agency
Subsection (b)(3) provides the required language of the
Section 4. Enforcement
Section 4 authorizes the FTC to treat a violation of the
Act as a violation of FTC rules defining an unfair and
deceptive act or practice under section 18(a)(1)(B) of the FTC
Act. This section authorizes the FTC to enforce the Act in the
same manner and with the same powers and duties it has under
the FTC Act.
Section 5. Actions by states
Section 5 provides the authority and parameters for a state
to bring civil action against a violator of the Act. A state
attorney general may bring civil action against any person in
practice that violates any regulation of the Commission
prescribed under section 3 of this Act in Federal district
court in order to: (1) enjoin that practice; (2) enforce
compliance with the regulation; (3) obtain damage, restitution,
or other compensation; or (4) obtain other relief as the court
may consider appropriate.
An attorney of the state filing an action under this Act
must first provide a written notice of the action and a copy of
the complaint to the FTC, unless it is not feasible in which
case it must be provided to the FTC at the same time as the
action is filed.
Subsection (b) provides the FTC with the authority to
intervene in any action brought by a state under this Act. If
the Commission intervenes, it maintains the right to be heard
and the right to file a petition for appeal.
Subsection (c) provides that an action brought under
subsection (a) by an attorney general shall not prevent the
attorney general from exercising the powers provided by any
other laws of the state.
Subsection (d) stipulates that no state may institute an
action under subsection (a) while an action instituted by or on
behalf of the Commission is pending.
Subsection (e) provides that an action brought by an
attorney general of a state under subsection (a) may be brought
in a district court of the United States that meets the venue
Subsection (f) provides the terms under which process may
be served in an action brought under subsection (a).
Section 6. Protection of the educational institution
Section 6 provides safeguards and remedies for educational
Subsection (a) provides for written notification by the
student athlete, and the athlete agent, to the athletic
director or appropriate individual responsible for athletic
programs of the educational institution. The notification that
an agency contract has been entered into must be within 72
hours after entering into the contract or before the next
athletic contest in which the student athlete may participate,
whichever occurs first.
Subsection (b) provides an educational institution with
civil remedy, including a right of action against an athlete
agent for damages resulting from a violation of this Act.
Section 7. Sense of Congress
Section 7 expresses the sense of Congress that the States
should enact the Uniform Athlete Agent Act of 2000 to protect
student athletes and the integrity of amateur sports from
unscrupulous sports agents.
CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
This legislation does not amend any existing Federal