State and Federal Regulation of Athlete Agents

NCAA GOVERNMENT RELATIONS REPORT

[Detailed Report, July 2004]

1. Congressional Overview.

There are a limited number of working days left for the members of the 108^th Congress. The Congress will begin its summer recess on July 23 and return in September after the Labor Day holiday. This schedule will allow members to attend either the Democratic or Republican national conventions. They are scheduled to adjourn in early October to allow Members to get to their home districts to campaign for the November 2 elections. Due to partisan pressure, few new legislative accomplishments are expected this session. An enormous amount of time has been spent on various issues involving the war in Iraq, and committee schedules have been impacted. The Presidential campaign will drive the public discourse on a variety of issues leading up to November 2. Most state legislatures have adjourned for the year, as well, with only nine state legislatures still in session.

2. State and Federal Regulation of Athlete Agents.

a. State Efforts: The NCAA government relations staff has worked to address the harm caused by the unscrupulous acts of athlete agents by educating state legislators on the importance of adopting the Uniform Athlete Agent Act (UAAA). The NCAA, in conjunction with the National Conference of Commissioners on Uniform State Laws (NCCUSL), has continued to seek passage of the UAAA as a way to remedy the negative impact that improper athlete agent activity can have on student-athletes and institutions of higher education. The UAAA greatly helps in these efforts by establishing uniform athlete agent registration procedures and imposing criminal, civil and/or administrative penalties against unscrupulous agents.

The NCAA and NCCUSL have been successful in conveying the importance of this model act to state legislators. To date, 30 jurisdictions have adopted the UAAA. A listing of the jurisdictions that have adopted the UAAA is attached. The UAAA has also been passed by the Missouri and South Carolina legislatures and has been sent to their respective governors for signature. Additionally, the UAAA is being actively considered in Illinois. To provide interested individuals with adequate information regarding the UAAA, NCAA staff has revised and updated its Athlete Agent Web page in an effort to accurately track UAAA legislation and simplify the search process for visitors.

Plan of action: The NCAA has worked with NCCUSL to develop a strategic plan for passage of the UAAA in remaining states. NCAA staff will continue to focus much of its attention in the states on this effort.

b. Federal Efforts: The Sports Agent Responsibility and Trust Act (H.R. 361) was introduced by Representative Bart Gordon (D-TN) to address concerns with unscrupulous athlete agents. SPARTA prohibits athlete agents from attempting to lure student-athletes into signing representation contracts by making false promises or misleading statements and from providing anything of value to the athlete. Additionally, the bill includes a ?Sense of Congress? section which lends its support to passage of the important registration requirements in the UAAA and does not preempt or conflict with the UAAA. Instead, SPARTA serves as a ?federal backstop? in those states that have not yet passed the state model law.

H.R. 361 was passed by the House of Representatives June 4, 2003. A similar bill was introduced by Senator Ron Wyden, June 3, 2003, and has not yet been scheduled for a hearing.

Plan of action: NCAA staff will continue to educate federal legislators on the importance of passage of athlete agent registration legislation.

3. Sports Wagering.

Sports wagering in any form may threaten the integrity of athletics contests, jeopardizes the welfare of student-athletes by making them easy targets for unscrupulous gamblers looking to ensure the outcome of an athletics contest and sends a dangerous message to youth, amateur athletes and college students generally. Due to the threat of potential harm to the intercollegiate athletics community, the NCAA has continued to support legislative efforts that would address this matter.

4. Internet Gambling.

Internet gambling poses a significant challenge to the NCAA and the intercollegiate athletics community due to the unique aspects of this medium, which allows gamblers and gambling entities to circumvent United States law. The NCAA supported the efforts of Representative Spencer Bachus (R-AL), who introduced the Unlawful Internet Gambling Funding Prohibition Act (H.R. 2143) to combat this problem. H.R. 2143 will require designated payment systems to establish policies and procedures to identify Internet gambling transactions and prevent the acceptance of credit cards or other bank instruments by the online gambling entity. H.R. 2143 was passed by the House June 10, 2003.

Senator Jon Kyl (R-AZ) sponsored a similar version of the legislation (S. 627), which contains civil and criminal penalties. S. 627 was unanimously approved by the Committee on Banking, Housing and Urban Affairs July 31, 2003. The bill has yet to be considered by the full Senate.

Plan of action: The NCAA and a large coalition that includes professional sports leagues, family values associations, law enforcement, the financial services industry and others will advocate passage of the strongest legislation combating the problem of Internet gambling. NCAA staff will continue to monitor these bills, although movement is not likely during the remainder of this congressional session.

5. Sports Wagering.

The Student Athlete Protection Act (H.R. 1451) was introduced by Representative Tom Osborne March 26, 2003. The bill would amend the federal judicial code to prohibit high school and college sports gambling in all states, including states where such gambling was permitted prior to 1991. This legislation has been referred to the House Committee on the Judiciary.

The Amateur Sports Integrity Act was introduced by Senator John McCain May 6, 2003. The act would amend the Ted Stevens Olympic and Amateur Sports Act to prohibit gambling on a competitive game at the Summer or Winter Olympics or in which high school or college athletes participate. The legislation has been referred to the Committee on Commerce, Science, and Transportation.

On the state side, there has been interest by a few jurisdictions to study the feasibility of sports wagering in their states. In 2003 and 2004, NCAA staff worked successfully with a coalition of the professional league to prevent the introduction of sports wagering legislation. There was great concern by some in the Delaware state legislature that with the likelihood that both Pennsylvania and Maryland would allow slot machines, Delaware would lose substantial revenue. Some legislators considered sports wagering as a means to combat the possible loss of revenue from the neighboring states. More recently, in New Jersey, the chairman of the Assembly?s Tourism and Gaming Committee held an informational hearing on the possibility of sports wagering.

Plan of action. NCAA staff will continue to monitor legislation pertaining to sports wagering. We will continue to support legislation that would prohibit legal and illegal wagering on college athletics and oppose any legislation seeking to expand sports wagering in the states.

In addition, NCAA government relations staff will work closely with the newly formed Sports Wagering task force and act as a liaison to share the survey information with elected officials.

4. Controlled Substances.

The health and safety of student athletes continues to be a priority for the NCAA and its members. The NCAA has continued to evaluate and alter its efforts to protect student athletes from the grave health risks caused by harmful substances. In conjunction with its own regulation of harmful substances in intercollegiate athletics, the NCAA has continued to support legislative efforts aimed at preventing the sale and consumption of dangerous dietary substances.

On March 1, 2004, Rep. James Sensenbrenner (R-WI), Rep. John Conyers (D-MI), Rep. John Sweeney (R-NY), Rep. Tom Osborne (R-NE) and Rep. Howard Berman (D-CA) partnered to introduce the Anabolic Steroid Control Act of 2004 (H.R. 3866). The legislation will update the list of illegal dangerous substances, simplify the process of quickly and effectively classifying new steroids as controlled substances and increase the potential penalties for individuals who traffic anabolic steroids within 1000 feet of any sports facility. H.R. 3866 was approved by the House June 3, 2004, and is currently being considered by the Senate Committee on the Judiciary.

H.R. 3866 is one of several bills that address the dangers of harmful dietary supplements. H.R. 207, the Anabolic Steroid Precursor Control and Health Education Act has been referred to several committees and is currently under consideration in the House Subcommittee on Education Reform. In the Senate, Senator Joseph Biden introduced related steroid precursor legislation, which has been referred to the Committee on the Judiciary.

To provide support for these bills and other efforts seeking to remove harmful dietary supplements from the marketplace, NCAA government relations staff has worked closely with the Committee on Competitive Safeguards and Medical Aspects of Sports, and several other organizations. The committee members have been active participants in these efforts at Congressional hearings and reviewed and commented on various drafts of the legislation. The staff was very pleased that the U.S. Food and Drug Administration published a final rule that banned the sale of dietary supplements containing ephedrine alkaloids after finding that they present an unreasonable risk of illness or injury. Additionally, on March 11, 2004, the Food and Drug Administration issued a warning to companies that manufacture, market or distribute products containing androstenedione (andro) ordering them to cease the distribution of those products.

Plan of Action: The NCAA staff will continue to work closely with members of Congress and interested organizations to advocate for legislation to address the harms of certain dietary supplements.

5. Recruiting Practices.

On March 11, 2004, the House Subcommittee on Commerce, Trade and Consumer Protection held a hearing to probe into recruiting practices nationwide following the improper use of sex and alcohol in recruiting student-athletes at the University of Colorado. Witnesses included David Berst, Vice President for Division I and the Chair of the NCAA Task Force on Recruiting; Elizabeth Hoffman, President of the University of Colorado; David Williams II, Vice Chancellor of Vanderbilt University; Representative Tom Osborne (R-NE);and Don McPherson, Executive Director, Sports Leadership Institute.

The subcommittee held a follow-up hearing May 18, 2004, to discuss the NCAA?s progress in establishing new rules governing the recruitment of student-athletes and the newly enacted NCAA academic reform legislation. Prior to the hearing, NCAA staff provided committee staff members with up to date information on NCAA academic reform proposals and recommendations from the NCAA Task Force on Recruiting. NCAA staff was encouraged by the response it received from committee staff in regard to the information.

Testifying before the subcommittee were Wally Renfro, NCAA Senior Advisor to the President and William Friday, Chairman of the Knight Foundation Commission on Intercollegiate Athletics. Former Congressman Tom McMillen sat on the panel to offer his assistance in answering any questions the committee members had. The committee members expressed support for the academic reform package and urged the NCAA to continue to work toward changes in the recruiting rules that will adequately address current problems associated with the recruitment of student-athletes.

Plan of Action: NCAA staff will continue to provide information to members of Congress and their staffs regarding efforts by the task force to update NCAA bylaws on recruiting.

6. NCAA Enforcement Process.

On May 11, 2004, Rep. Spencer Bachus (R-AL) requested that Rep. James Sensenbrenner, Chairman of the House Judiciary Committee, grant an oversight hearing to investigate the NCAA?s enforcement process. Specifically, Rep. Bachus wanted the committee to probe into whether the NCAA provides its members with sufficient safeguards to ensure that infraction proceedings provide fundamental fairness and procedural due process as required under the Constitution. Chairman Sensenbrenner subsequently granted the request of Rep. Bachus (R-AL) and ordered that a hearing before the House Subcommittee on the Constitution be allowed to examine these issues. A hearing date has not yet been determined. NCAA government relations and legal staff met with the Judiciary Committee