October 2004 Management Council Agenda Sup. No. 31

NCAA GOVERNMENT RELATIONS REPORT

(September 2004)

1. Congressional Outlook. With control of the White House, the U.S. Senate and the U.S. House of Representatives at stake during the November 2 elections, it is unlikely that Congress will advance many bills prior to their target recess date of October 8, 2004. During the remaining days of the 108^th Congress, matters likely to receive consideration include bills addressing appropriations, intelligence overhaul, federal debt limit increase, defense authorization and surface transportation. In order to provide Congress with an opportunity to finish any remaining business, it is likely that a post election session will be held in November 2004.

Most state legislatures have adjourned for the year. We do not expect any additional action on NCAA related issues in the states this year.

2. NCAA Enforcement and Reinstatement Processes. On May 11, 2003, Representative Spencer Bachus (R-AL) requested an oversight hearing before the House Judiciary Committee to investigate the NCAA’s enforcement process and to determine whether appropriate due process is provided. Chairman James Sensenbrenner (R-WI) agreed to let the Judiciary Subcommittee on the Constitution hold an oversight hearing titled “Due Process and the NCAA” on September 14, 2004.

Testifying before the subcommittee were: Josephine (Jo) Potuto, vice chair of the NCAA Committee on Infractions; Jeremy Bloom, U.S. Olympic skier and former University of Colorado football student-athlete and David Ridpath, faculty at Mississippi State University. Gary R. Roberts, deputy dean and sports law program director, Tulane Law School, was also scheduled to testify, however, inclement weather prevented him from participating in the hearing.

The hearing explored several aspects of the Committee on Infractions and student-athlete reinstatement procedures. Members of the subcommittee inquired about the absence of open hearings and the lack of an impartial fact-finder. Members also questioned the Committee on Infractions representative about the organization’s failure to adopt all of the recommendations forwarded by the Lee Commission Report which analyzed its enforcement procedures in the early 1990’s. In conclusion, several subcommittee members questioned whether it was appropriate for Congress to intervene in the rule making of a private membership organization.

On July 23, 2004, Senator Shelby (R-AL) requested a similar oversight hearing before the Senate Judiciary Committee. The request is currently pending.

3. State and Federal Regulation of Athlete Agents. The unscrupulous acts of athlete agents can have a detrimental impact on student-athletes, athletic teams and universities. To curb these abuses, the NCAA has worked to seek adoption of legislation aimed at protecting student-athletes and member institutions from the improper conduct of athlete agents.

a. State Efforts. At the urging of the NCAA and its member institutions, the National Conference of Commissioners on Uniform State Laws (NCCUSL) drafted a model law to provide a uniform system for regulating athlete agents. The Uniform Athlete Agent Act (UAAA) governs the relationships between student-athletes, athlete agents and academic institutions and is designed to protect student athletes and their academic institutions from unscrupulous agent conduct.

The NCAA and NCCUSL have been successful in conveying the importance of this model act to state legislators. To date, the UAAA has been adopted by thirty states, the Virgin Islands and the District of Columbia. The NCAA and NCCUSL will continue to work toward passage of the UAAA in remaining states.

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. Also, 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. SPARTA will serve 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 on June 4, 2003, and its companion bill was passed by the Senate on September 9, 2004. The legislation will now go to the President for his signature. Congressman Gordon has asked the NCAA to assist in educating its members and state government officials regarding the importance of enforcing the new law.

4. Controlled Substances. The NCAA continues to update its efforts to ensure that the health and safety of student-athletes remains paramount. The grave health risks caused by harmful substances used in an attempt to enhance one’s performance coupled with the risk to a student-athlete’s eligibility have further highlighted the need for additional regulation. In recognition of this need, the NCAA and the Committee on Competitive Safeguards and Medical Aspects of Sports continue to support legislative efforts aimed at preventing the sale and consumption of dangerous dietary substances.

H.R. 3866, the Anabolic Steroid Control Act of 2004, 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 passed by the House on June 3, 2004. Similar legislation in the form of S. 2195 is scheduled for a markup by the Senate Judiciary Committee.

5. Gambling. Gambling on collegiate athletics jeopardizes the integrity of athletic contests and can put student-athletes in perilous situations by making them easy targets for unscrupulous gamblers looking to ensure the outcome of athletic contests. To protect student-athletes from potential harms, the NCAA has continued to support legislative efforts that would address this issue.

a. Internet Gambling. H.R. 2143, The Unlawful Internet Gambling Funding Prohibition Act, would 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 on June 10, 2003, but has been stalled in the Senate.

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

b. Sports Wagering: Several state legislatures continue to display an interest in studying the feasibility of sports wagering. In 2004, Delaware and New Jersey both examined this issue in an attempt to meet budget challenges despite public, political and legal obstacles. The government relations staff will continue to monitor this matter for any future developments.

6. Hiring of Minorities in Intercollegiate Athletics. A strategy forum was held during the Congressional Black Caucus Foundation Annual Legislative Conference, which focused on the low number of minority football coaches, athletic directors and conference commissioners within the NCAA. The forum was hosted by Representative Julia Carson (D-IN) and Representative Donald Payne (D-NJ) served as the convener. Floyd Keith, executive director, Black Coaches Association (BCA); Stan Wilcox, associate commissioner, Big East Conference, President of the BCA; Eugene Marshall, director of athletics, Ramapo College, former chairman of the NCAA Minorities Opportunities Interest Committee (MOIC); Richard Lapchick, Devos Sports Management Program, University of Central Florida; and Robert Vowels, Southwestern Athletic Conference commissioner, chairman of the MOIC participated as panelists.

During the forum, panelists explored and sought solutions to the perceived lack of fair search and hiring processes for football coaches, athletic directors and conference commissioners. Many of the panelists were encouraged by the willingness of the NCAA national office to support various initiatives to increase diversity within collegiate athletics.

NCAA government relations staff will continue to monitor this issue and will provide information to Congressional Members who have a great interest in this area.

7. Terrorism Insurance. Since September 11, 2001, several insurers and reinsurers have determined that terrorism is not an insurable risk and are withdrawing themselves from the market. Insurers point out that their experience with major terrorist events has been so limited, and the potential for losses so large, that setting an actuarially sound price for such coverage is virtually impossible.

The Terrorism Risk Insurance Act (TRIA) was enacted in 2002 to provide support for insurance companies in the event of a terrorist attack. The law requires insurers to offer coverage against terrorism but ensures that the federal government will pay 90 percent of catastrophic losses that exceed specified amounts. With the law scheduled to expire December 31, 2005, the insurance and real estate industries have been pushing Congress to act on legislation that would extend TRIA through 2007.

Following a two-month stalemate, the House Financial Services Committee will mark up legislation HR 4634 on September 29, 2004. The bill would extend the federal backstop for insurance coverage against damage resulting from terrorism. However, it remains unlikely that the Senate will act on similar legislation this year.

NCAA government relations staff will continue to monitor movement in this area and the anticipated results of a study conducted by the Treasury Department, which examines the effectiveness of TRIA.