[Congressional Record Volume 149, Number 81 (Wednesday, June 4, 2003)]
[House]
[Pages H4895-H4899]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




               SPORTS AGENT RESPONSIBILITY AND TRUST ACT

  Mr. STEARNS. Mr. Speaker, I move to suspend the rules and pass 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, as amended.
  The Clerk read as follows:

                                H.R. 361

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Sports Agent Responsibility 
     and Trust Act''.

     SEC. 2. DEFINITIONS.

       As used in this Act, the following definitions apply:
       (1) Agency contract.--The term ``agency contract'' means an 
     oral or written agreement in which a student athlete 
     authorizes a person to negotiate or solicit on behalf of the 
     student athlete a professional sports contract or an 
     endorsement contract.
       (2) Athlete agent.--The term ``athlete agent'' means an 
     individual who enters into an agency contract with a student 
     athlete, or directly or indirectly recruits or solicits a 
     student athlete to enter into an agency contract, and does 
     not include a spouse, parent, sibling, grandparent, or 
     guardian of such student athlete, any legal counsel for 
     purposes other than that of representative agency, or an 
     individual acting solely on behalf of a professional sports 
     team or professional sports organization.
       (3) Athletic director.--The term ``athletic director'' 
     means an individual responsible for administering the 
     athletic program of an educational institution or, in the 
     case that such program is administered separately, the 
     athletic program for male students or the athletic program 
     for female students, as appropriate.
       (4) Commission.--The term ``Commission'' means the Federal 
     Trade Commission.
       (5) Endorsement contract.--The term ``endorsement 
     contract'' means an agreement under which a student athlete 
     is employed or receives consideration for the use by the 
     other party of that individual's person, name, image, or 
     likeness in the promotion of any product, service, or event.
       (6) Intercollegiate sport.--The term ``intercollegiate 
     sport'' means a sport played at the collegiate level for 
     which eligibility requirements for participation by a student 
     athlete are established by a national association for the 
     promotion or regulation of college athletics.
       (7) Professional sports contract.--The term ``professional 
     sports contract'' means an agreement under which an 
     individual is employed, or agrees to render services, as a 
     player on a professional sports team, with a professional 
     sports organization, or as a professional athlete.
       (8) State.--The term ``State'' includes a State of the 
     United States, the District of Columbia, Puerto Rico, the 
     United States Virgin Islands, or any territory or insular 
     possession subject to the jurisdiction of the United States.
       (9) Student athlete.--The term ``student athlete'' means an 
     individual who engages in, is eligible to engage in, or may 
     be eligible in the future to engage in, any intercollegiate 
     sport. An individual who is permanently ineligible to 
     participate in a particular intercollegiate sport is not a 
     student athlete for purposes of that sport.

     SEC. 3. REGULATION OF UNFAIR AND DECEPTIVE ACTS AND PRACTICES 
                   IN CONNECTION WITH THE CONTACT BETWEEN AN 
                   ATHLETE AGENT AND A STUDENT ATHLETE.

       (a) Conduct Prohibited.--It is unlawful for an athlete 
     agent to--
       (1) directly or indirectly recruit or solicit a student 
     athlete to enter into an agency contract, by--
       (A) giving any false or misleading information or making a 
     false promise or representation; or
       (B) providing anything of value to a student athlete or 
     anyone associated with the student athlete before the student 
     athlete enters into an agency contract, including any 
     consideration in the form of a loan, or acting in the 
     capacity of a guarantor or co-guarantor for any debt;
       (2) enter into an agency contract with a student athlete 
     without providing the student athlete with the disclosure 
     document described in subsection (b); or
       (3) predate or postdate an agency contract.
       (b) Required Disclosure by Athlete Agents to Student 
     Athletes.--
       (1) In general.--In conjunction with the entering into of 
     an agency contract, an athlete agent shall provide to the 
     student athlete, or, if the student athlete is under the age 
     of 18, to such student athlete's parent or legal guardian, a 
     disclosure document that meets the requirements of this 
     subsection. Such disclosure document is separate from and in 
     addition to any disclosure which may be required under State 
     law.
       (2) Signature of student athlete.--The disclosure document 
     must be signed by the student athlete, or, if the student 
     athlete is under the age of 18, by such student athlete's 
     parent or legal guardian, prior to entering into the agency 
     contract.
       (3) Required language.--The disclosure document must 
     contain, in close proximity to the signature of the student 
     athlete, or, if the student athlete is under the age of 18, 
     the signature of such student athlete's parent or legal 
     guardian, a conspicuous notice in boldface type stating: 
     ``Warning to Student Athlete: If you agree orally or in 
     writing to be represented by an agent now or in the future 
     you may lose your eligibility to compete as a student athlete 
     in your sport. Within 72 hours after entering into this 
     contract or before the next athletic event in which you are 
     eligible to participate, whichever occurs first, both you and 
     the agent by whom you are agreeing to be represented must 
     notify the athletic director of the educational institution 
     at which you are enrolled, or other individual responsible 
     for athletic programs at such educational institution, that 
     you have entered into an agency contract.''.

     SEC. 4. ENFORCEMENT.

       (a) Unfair or Deceptive Act or Practice.--A violation of 
     this Act shall be treated as a violation of a rule defining 
     an unfair or deceptive act or practice prescribed under 
     section 18(a)(1)(B) of the Federal Trade Commission Act (15 
     U.S.C. 57a(a)(1)(B)).
       (b) Actions by the Commission.--The Commission shall 
     enforce this Act in the same manner, by the same means, and 
     with the same jurisdiction, powers, and duties as though all 
     applicable terms and provisions of the Federal Trade 
     Commission Act (15 U.S.C. 41 et seq.) were incorporated into 
     and made a part of this Act.

     SEC. 5. ACTIONS BY STATES.

       (a) In General.--
       (1) Civil actions.--In any case in which the attorney 
     general of a State has reason to believe that an interest of 
     the residents of that State has been or is threatened or 
     adversely affected by the engagement of any athlete agent in 
     a practice that violates section 3 of this Act, the State may 
     bring a civil action on behalf of the residents of the State 
     in a district court of the United States of appropriate 
     jurisdiction to--
       (A) enjoin that practice;
       (B) enforce compliance with this Act; or
       (C) obtain damage, restitution, or other compensation on 
     behalf of residents of the State.
       (2) Notice.--
       (A) In general.--Before filing an action under paragraph 
     (1), the attorney general of the State involved shall provide 
     to the Commission--
       (i) written notice of that action; and
       (ii) a copy of the complaint for that action.
       (B) Exemption.--Subparagraph (A) shall not apply with 
     respect to the filing of an action by an attorney general of 
     a State under this subsection, if the attorney general 
     determines that it is not feasible to provide the notice 
     described in that subparagraph before filing of the action. 
     In such case, the attorney general of a State shall provide 
     notice and a copy of the complaint to the Commission at the 
     same time as the attorney general files the action.
       (b) Intervention.--
       (1) In general.--On receiving notice under subsection 
     (a)(2), the Commission shall have the right to intervene in 
     the action that is the subject of the notice.
       (2) Effect of intervention.--If the Commission intervenes 
     in an action under subsection (a), it shall have the right--
       (A) to be heard with respect to any matter that arises in 
     that action; and
       (B) to file a petition for appeal.
       (c) Construction.--For purposes of bringing any civil 
     action under subsection (a), nothing in this title shall be 
     construed to prevent an attorney general of a State from 
     exercising the powers conferred on the attorney general by 
     the laws of that State to--
       (1) conduct investigations;
       (2) administer oaths or affirmations; or
       (3) compel the attendance of witnesses or the production of 
     documentary and other evidence.
       (d) Actions by the Commission.--In any case in which an 
     action is instituted by or on behalf of the Commission for a 
     violation of section 3, no State may, during the pendency of 
     that action, institute an action under subsection (a) against 
     any defendant named in the complaint in that action.
       (e) Venue.--Any action brought under subsection (a) may be 
     brought in the district court of the United States that meets 
     applicable requirements relating to venue under section 1391 
     of title 28, United States Code.

[[Page H4896]]

       (f) Service of Process.--In an action brought under 
     subsection (a), process may be served in any district in 
     which the defendant--
       (1) is an inhabitant; or
       (2) may be found.

     SEC. 6. PROTECTION OF EDUCATIONAL INSTITUTION.

       (a) Notice Required.--Within 72 hours after entering into 
     an agency contract or before the next athletic event in which 
     the student athlete may participate, whichever occurs first, 
     the athlete agent and the student athlete shall each inform 
     the athletic director of the educational institution at which 
     the student athlete is enrolled, or other individual 
     responsible for athletic programs at such educational 
     institution, that the student athlete has entered into an 
     agency contract, and the athlete agent shall provide the 
     athletic director with notice in writing of such a contract.
       (b) Civil Remedy.--
       (1) In general.--An educational institution has a right of 
     action against an athlete agent for damages caused by a 
     violation of this Act.
       (2) Damages.--Damages of an educational institution may 
     include and are limited to actual losses and expenses 
     incurred because, as a result of the conduct of the athlete 
     agent, the educational institution was injured by a violation 
     of this Act or was penalized, disqualified, or suspended from 
     participation in athletics by a national association for the 
     promotion and regulation of athletics, by an athletic 
     conference, or by reasonable self-imposed disciplinary action 
     taken to mitigate actions likely to be imposed by such an 
     association or conference.
       (3) Costs and attorneys fees.--In an action taken under 
     this section, the court may award to the prevailing party 
     costs and reasonable attorneys fees.
       (4) Effect on other rights, remedies and defenses.--This 
     section does not restrict the rights, remedies, or defenses 
     of any person under law or equity.

     SEC. 7. LIMITATION.

       Nothing in this Act shall be construed to prohibit an 
     individual from seeking any remedies available under existing 
     Federal or State law or equity.

     SEC. 8. SENSE OF CONGRESS.

       It is the sense of Congress that States should enact the 
     Uniform Athlete Agents Act of 2000 drafted by the National 
     Conference of Commissioners on Uniform State Laws, to protect 
     student athletes and the integrity of amateur sports from 
     unscrupulous sports agents. In particular, it is the sense of 
     Congress that States should enact the provisions relating to 
     the registration of sports agents, the required form of 
     contract, the right of the student athlete to cancel an 
     agency contract, the disclosure requirements relating to 
     record maintenance, reporting, renewal, notice, warning, and 
     security, and the provisions for reciprocity among the 
     States.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Florida (Mr. Stearns) and the gentleman from Tennessee (Mr. Gordon) 
each will control 20 minutes.
  The Chair recognizes the gentleman from Florida (Mr. Stearns).


                             General Leave

  Mr. STEARNS. Mr. Speaker, I ask unanimous consent that all Members 
may have 5 legislative days within which to revise and extend their 
remarks and include extraneous material on H.R. 361, as amended.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Florida?
  There was no objection.
  Mr. STEARNS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I rise in support of H.R. 361, the Sports Agent Trust 
and Responsibility Act.
  Mr. Speaker, this legislation is sponsored by my friend and colleague 
on the Committee on Energy and Commerce, the gentleman from Tennessee 
(Mr. Gordon), for whom this has been a long-standing concern. 
Additionally, our colleague, the gentleman from Nebraska (Mr. Osborne), 
also has firsthand experience in dealing with the problem in this bill 
in his prior career and is a major cosponsor.
  The Subcommittee on Commerce, Trade and Consumer Protection held 
hearings on this legislation last year and heard from many experts 
regarding the problems facing promising student athletes in this 
country. My colleagues and I on the Committee on Energy and Commerce 
agree there is a problem and that this bill, H.R. 361, is a responsible 
and necessary legislative solution. We passed the legislation out of 
our committee unanimously in the 107th Congress.
  For my colleagues who may be unaware of the nature of the problem, 
let me briefly explain this afternoon. I am sure the gentleman from 
Tennessee (Mr. Gordon) and the gentleman from Nebraska (Mr. Osborne) 
will also amplify my comments on how destructive this behavior can be 
to the student athletes, their families, and to the schools.
  I share their concern that student athletes are often targeted by 
unscrupulous agents who suffer little or no consequence for their 
continued deception. In today's multibillion dollar professional sports 
industry, collegiate athletes with even the slightest potential of 
becoming a highly paid professional athlete often find themselves in 
the cross hairs of sports agents. Because the odds of an athlete making 
it to the professional ranks is very, very low, the financial reward 
for those who do make it can be extraordinary, and the financial 
windfall to an agent representing the athlete is highly significant.
  For an agent who may not be an established name in the business, 
success for this agent may be dependent upon either signing a superstar 
or playing the simple percentages and representing multiple promising 
athletes in hopes of at least one making it to the professional 
leagues.
  Unfortunately, Mr. Speaker, the agents looking to make a quick buck 
are often the same ones who do not have the athlete's best interest in 
mind. While the reputable agents respect the athletes, and, of course, 
they follow the rules, the unscrupulous agents have been reported to 
take extreme measures to sign the athlete with little regard for the 
consequences to the athlete. Why do they do this? For those agents 
lacking any integrity, the financial payout can be very, very large; 
and there are few, if any, consequences to dissuade them.
  While we do not currently have a Federal remedy to address these 
problems, many of our States do. They have recognized the problem and 
have varying State laws to address the behavior of these sports agents. 
Because the inconsistency of the State laws has prevented meaningful 
enforcement, the States recently approved a uniform State athlete agent 
act in the Year 2000. More than a dozen States have since enacted the 
law, and it is working its way through many other State legislatures.
  As promising as this sounds, it is a long process that does not 
guarantee that all of the States will adopt it. While this may not 
sound significant to my colleagues, the law can only be completely 
effective if it is enforced uniformly in every State in this Nation.
  The States deserve credit for addressing this problem. Yet, Mr. 
Speaker, the reality is that there is still a gaping hole that this 
legislation will finally fill. Not only does this legislation provide 
the Federal Trade Commission with the authority to enforce the act, but 
it also provides the States with the authority to bring civil action 
against violators in the Federal courts. Additionally, the legislation 
requires a new disclosure to the student athlete, and, finally, places 
a measure of responsibility on the agent himself so that there should 
be no misunderstanding regarding the signing of a contract.
  Mr. Speaker, this legislation provides a Federal remedy to a problem 
that many of us did not know about, but it is no less deserving of a 
cure this afternoon. H.R. 361 provides a measured response. I urge my 
colleagues to support it.
  Mr. Speaker, I reserve the balance of my time.
  Mr. GORDON. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I intend to make a few brief remarks in support of H.R. 
361, the Sports Agent Responsibility and Trust Act, or SPARTA. The 
combination of a patchwork of weak State laws and the lure of big money 
has made student athletes an irresistible target for certain 
unscrupulous sports agents willing to break the rules concerning 
amateur athletics. Such agents use any means necessary to convince a 
student athlete who has even a remote chance of playing professional 
sports to drop out of school and go pro early, including deceptive 
information about their chances in the draft, secret payments to their 
friends and families, lavish gifts, and sometimes even blackmail.
  This kind of elicit behavior can quickly cost student athletes their 
scholarships and eligibility to play college sports. The school may 
face substantial fines and other economic losses.
  The only person not held accountable is the sports agent. 
Unfortunately, under the current patchwork of State sports agent laws, 
the agents face little or no consequences for damages they have caused.

[[Page H4897]]

  H.R. 361 addresses this problem head on by providing baseline Federal 
remedies to protect student athletes and educational institutions, 
particularly in those States with no existing law regulating sports 
agent conduct.
  Specifically, the bill would make a number of unethical recruiting 
tactics unfair and deceptive trade practices under the Federal Trade 
Act. This includes making false or misleading promises or 
representations, providing anything of value to the student athletes or 
anyone associated with the athlete in order to entice them into an 
agency contract, failing to tell the student signing the contract that 
it will end their college eligibility, and pre-dating or post-dating 
contracts.
  The pressures on student athletes and colleges are tremendous. We 
have a responsibility to educate our student athletes and protect them 
from unscrupulous sports agents who try to trick or trap them into 
dropping out of school. This legislation will send a strong signal to 
the rotten apple agents that they will be held accountable for 
unethical recruiting practices. I urge all Members to support this 
bill.
  Finally, Mr. Speaker, let me give my sincere thanks to the gentleman 
from the State and University of Nebraska (Mr. Osborne). The gentleman 
has brought a unique perspective to this bill and persuasiveness that 
has helped us get this passed.
  Also I want to thank the subcommittee chairman from the Committee on 
Energy and Commerce, the gentleman from Florida (Mr. Stearns), for 
expediting this procedure and helping us move through his committee, as 
well as the ranking member, the gentleman from New York (Mr. Towns).
  I also want to thank the gentleman from Louisiana (Chairman Tauzin) 
and the ranking member, the gentleman from Michigan (Mr. Dingell), for 
their help. Certainly with joint jurisdiction with the Committee on the 
Judiciary, the gentleman from Wisconsin (Chairman Sensenbrenner) should 
be thanked for his help; as well as the subcommittee chairman, the 
gentleman from Utah (Mr. Cannon); the ranking member, the gentleman 
from North Carolina (Mr. Watt); and the ranking member, the gentleman 
from Michigan (Mr. Conyers).
  Finally, let me thank a diligent member of my staff, Dana 
Lichtenberg, who has done an outstanding job with her tenaciousness in 
moving this bill forward, and also a friend of mine from home, Ken 
Shipp. Coach Shipp came by my office a few years ago on the Square in 
Murfreesboro and told me about this problem; and, like so many things, 
I get my best advice from home, and so I thank Coach Shipp for his 
advice.
  Mr. Speaker, I reserve the balance of my time.
  Mr. STEARNS. Mr. Speaker, I yield 4 minutes to the gentleman from 
Wisconsin (Mr. Sensenbrenner), the distinguished chairman of the 
Committee on the Judiciary.
  Mr. SENSENBRENNER. Mr. Speaker, I rise in support of H.R. 361. This 
legislation, which is known as the SPARTA Act, is important for the 
sports industry, which in recent years has become ever more just so 
that, an industry. The thrill of pure athletic accomplishment has been 
overwhelmed as a motivating incentive by the desire for economic gain. 
While understandable, we cannot allow this desire to lead to the abuse 
of individuals, the public and private universities and colleges, and 
the system itself.
  We as Americans love sports. Who does not enjoy sitting back on a 
relaxing weekend watching their favorite college and professional 
sports teams performing? In Wisconsin, every Sunday during the fall we 
watch the Green Bay Packers with the intensity and caring of a mother 
bear watching her cubs. We have dedicated a month to an American 
tradition called March Madness and watch some of the most athletically 
gifted students in the Nation compete in the drama which can have only 
one victor at the day's end.

                              {time}  1430

  However, even with all this talent, only 1 percent of the NCAA 
athletes make it to the professional level, and then often only in a 
back-up role. For those who do make it to the big leagues, the rewards 
are great.
  Athlete agents want to reap this reward, as well. As a result, some 
agents deploy questionable tactics in a generally unregulated field. 
They send runners to befriend these athletes and give them money and 
other enticements, and support the friends and family of the athlete 
with money and gifts.
  This is done in consideration of an agreement for future 
representation, which is illegal by NCAA standards and causes the 
athlete to lose their collegiate eligibility. In many States, the 
penalty to the agent is nothing.
  Mr. Speaker, the Uniform Athlete Agents Act, which addresses this 
situation, has been adopted by over 20 States. However, given the 
nature of intercollegiate sports, State boundaries are crossed 
constantly. Agents can forum-shop by waiting in a State that has not 
adopted the UAAA and wait for the visiting team to arrive before 
approaching college stars.
  Because of this unique situation, this Federal solution is necessary. 
Geographic loopholes must be closed so that agents will comply with the 
modest guidelines set forth for recruitment by the NCAA.
  Mr. Speaker, this bill deserves the full support of the House, and I 
urge its adoption.
  Mr. GORDON. Mr. Speaker, I yield 2 minutes to the gentlewoman from 
Texas (Ms. Jackson-Lee).
  (Ms. JACKSON-LEE of Texas asked and was given permission to revise 
and extend her remarks.)
  Ms. JACKSON-LEE of Texas. Mr. Speaker, let me first of all give much 
applause to the gentleman from Tennessee (Mr. Gordon) for a very 
thoughtful, but very important legislative initiative. I am very proud 
as a member of the Committee on the Judiciary to have had an 
opportunity to have had oversight and jurisdiction over this 
legislation. I am also grateful for the response of the gentleman from 
Florida (Chairman Stearns) in bringing this legislation to the floor.
  Let me speak from a personal perspective, I guess, because I have an 
11th grader whose almost every waking moment deals with what is 
happening on the basketball court. I work very hard as a parent to 
ensure that his academics are safe and secure.
  We realize that America loves sports, young people love sports, but 
particularly in rural and inner-city communities many of our young 
people find their way out of poverty by seeking opportunities in a 
sports arena. I remember being with a family just a few weeks ago who 
was praying that their young man would be able to get into a certain 
college, and they were prayerful that his future would be great in some 
sports arena.
  So this bill, I say to the gentleman from Tennessee (Mr. Gordon), is 
extremely important because what it does is it provides an even playing 
field for the innocent youngster, the young person whose parents are 
hopeful that their lives will be different than the lives of their 
parents, struggling every day to work and provide resources for the 
family.
  The unscrupulous will be charged and the Federal Government, which I 
believe should be the major problem-solver of this Nation, will be 
right in the midst. We will not blame and see the headlines of the 
young people who may have gotten a car or may have been somewhere where 
they should not have been, while the other guy, who continues to have 
his fabulous rings and fancy cars, the sports agent, of which I do not 
label all of them, goes without penalty.
  Let me give a compliment to many sports agents that I know who work 
very hard to speak accurately to the families, and work with the young 
people. But I believe this legislation will set a litmus test to ensure 
that we balance these hopes and dreams and aspirations, these goals for 
these young people, and the right thing to do.
  So I applaud this legislation and I rise enthusiastically to support 
it. I know it will make life better for those who are trying to make 
life better for themselves.
  Mr. STEARNS. Mr. Speaker, I yield 5 minutes to the gentleman from 
Nebraska (Mr. Osborne), who has actually run premier athletic programs 
and has run multiple national college football championships at the 
University of Nebraska. If anyone knows about this problem of 
unscrupulous sports agents, the gentleman from Nebraska would know 
that.

[[Page H4898]]

  Mr. OSBORNE. Mr. Speaker, I thank the chairman for yielding time to 
me, and I appreciate his help very much.
  I would also like to thank the gentleman from Tennessee (Mr. Gordon) 
and his staff for all the work they have put in; the gentleman from 
Louisiana (Chairman Tauzin) and the gentleman from Wisconsin (Chairman 
Sensenbrenner) and their staffs; and also Lisa Knott from my staff. 
Many people have cooperated.
  As has been mentioned, currently only 20 States have comprehensive 
laws regulating sports agents; 17 States have no laws at all. My State, 
Nebraska, is one of those. Thirteen States have a patchwork of laws 
governing sports agents.
  Here is the problem. I will use primarily a football illustration, 
because that is what I understand the best. As of April, 2002, the 
National Football League Players Association reported 1,200 certified 
agents to represent NFL players. The problem is that of those 1,200, 
only 400 had clients, so we have 800 people who say they are agents and 
they have nobody to represent.
  There are also several hundred other agents who are not even 
certified by the National Football League who also call themselves 
agents. So if they call themselves agents and do not have a client, 
they are pretty desperate. What these guys do is, they will go after 
undergraduates, and they will sometimes be very unscrupulous in doing 
so. There are some good agents, but many are not. So here are some of 
the things that happen.
  They will offer an undergraduate athlete cars, clothes, cash, 
sometimes even drugs, to sign an agency contract. Of course, 
immediately this renders the student athlete ineligible.
  They promise an athlete that he will be drafted higher. The National 
Football League tells them they will be drafted in the fourth round, 
and the agent says, that is a lot of baloney. I will get you a personal 
trainer, I will get you a nutritionist, we will go to California, we 
will work hard, you are going to get bigger, faster, stronger, you are 
going to be a first-round pick, and you are going to make $6 million 
just to sign your name.
  Of course, that is totally untrue. They cannot get a player drafted 
higher because of the agent's activities. So the player drops out of 
school at that point, and he gets a nutritionist, and nothing happens.
  They use runners, as has been mentioned. These are usually former 
players. These are student athletes in the school. Sometimes they are 
simply students in the school. The player has no idea that he is 
dealing with somebody who represents an agent. So the runner takes him 
out to dinner and gets him obligated.
  They sometimes threaten athletes with physical harm.
  Lastly, they often tell a student athlete they will predate or 
postdate a contract so they will not jeopardize their eligibility, 
which is absolutely untrue. The minute they verbally agree to a 
contract or sign it, no matter whether it is predated or postdated, 
they are ineligible. These are some of the problems.
  With these problems in mind, the gentleman from Tennessee (Mr. 
Gordon) and I have introduced H.R. 361, which has been referred to 
previously as SPARTA. It makes it illegal for sports agents to entice 
student athletes with false or misleading information, promises, or 
representations.
  SPARTA requires the agent to inform the undergraduate athlete and his 
school in writing that the player has signed an agency contract and is 
ineligible. What often happens is a school does not know that they have 
got a guy out there playing who is ineligible, that he has already 
signed a contract, so this forces the agent to let the school know in 
writing that he has a player under contract and that player is 
ineligible.
  Under SPARTA, sports agents who engage in illegal recruiting will be 
fined up to $11,000 per incident per day. The Committee on Energy and 
Commerce passed this legislation by voice vote. The Committee on the 
Judiciary passed SPARTA by voice vote. So this legislation is 
bipartisan and it is noncontroversial.
  I urge my colleagues to support this legislation. I do not know any 
college athletic director, coach, reputable athlete, or most reputable 
agents themselves who would oppose this legislation.
  Again, I want to thank my colleague, the gentleman from Tennessee 
(Mr. Gordon), all those involved, and urge passage of this, what I 
think is a very important Federal backstop, very important legislation.
  Mr. GORDON. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, let me once again thank the gentleman from Nebraska (Mr. 
Osborne) for his efforts. To just elaborate a little on his comments, 
this legislation has been endorsed by virtually every organization that 
is affected in the country, by the American Football Coaching 
Association, the Black Coaches Association, the Knight Foundation 
Commission on Intercollegiate Athletics, the National Association of 
Basketball Coaches, the National Association of College Directors of 
Athletics, the NCAA, the Junior College Athletic Association, the Big 
12, the Big East, the Pac-10, the Sunbelt Conference, and coaches and 
athletic departments all across the country.
  Mr. Speaker, I reserve the balance of my time.
  Mr. STEARNS. Mr. Speaker, I yield 4 minutes to the gentleman from 
Utah (Mr. Cannon).
  Mr. CANNON. Mr. Speaker, I rise in support of H.R. 361.
  This bill is important for all of the reasons that have already been 
discussed. An athletic agent is in a unique position in that while he 
stands to gain from his relationship with the student athlete, that 
student athlete client shoulders much of the risk when rules are not 
followed.
  H.R. 361 evens the responsibilities and will help to act as a 
deterrent for agents who would otherwise not play by the rules of the 
game.
  H.R. 361 will prohibit an athlete agent from recruiting or soliciting 
a student athlete to enter into an agency contract through the use of 
false or misleading information, or by the provision of anything of 
value to the athlete or those associated with him.
  In addition, the bill would require the contract between the agent 
and the student athlete to have a conspicuous notice in bold typeface 
stating that the agreement for agent representation may result in the 
termination of the student athlete's eligibility to compete in 
collegiate sports.
  Violations of this act may be addressed by the Federal Trade 
Commission or the attorney general of the State of occurrence. The FTC 
may pursue an action as an unfair or deceptive act or practice. States 
are authorized to commence civil actions against the agent who is in 
violation of this act and seek remedies, including enjoining the 
practice, enforcing compliance, obtaining damages, restitution, or 
other compensation on behalf of the State's residents.
  In addition, this bill allows for educational institutions to seek 
damages in the event that a university athletic director is not 
informed of a new contractual relationship within 72 hours, either of 
the signing or the first event that the athlete is eligible to 
participate in.
  Failure to so instruct may allow the ineligible athlete to compete, 
thus causing exposure for the institution to be liable or penalized 
under sanctions, fines, forfeitures, or disqualifications. The bill 
allows the institution to file suit against the agent for his failure 
to disclose, and to seek compensation for those damages which the 
educational institution suffered.
  At the subcommittee, with the support of the gentleman from Tennessee 
(Mr. Gordon) and the gentleman from Nebraska (Mr. Osborne), working 
with the minority and with the distinguished ranking subcommittee 
member, the gentleman from North Carolina (Mr. Watt), I offered an 
amendment in the nature of a substitute which made this bill better.
  The amendment clarified several portions of the bill to make it clear 
what behavior will and will not be tolerated. The amendment clarified 
that the only representation to be prohibited is that of an agent, and 
should not otherwise prohibit or discourage an athlete from seeking 
legal representation.
  Further, the amendment included a specific ban on the giving of loans 
or acting as guarantor or co-guarantor for anything of value to the 
athlete or those associated with those athletes. This subterfuge is 
currently a common way of skirting NCAA rules.

[[Page H4899]]

  Finally, the amendment clarified that nothing in this bill was meant 
to prohibit an individual from seeking Federal, State, or equity 
remedies under existing law, thus strengthening the student athlete's 
right to pursue a claim under existing contractual law.
  Mr. Speaker, I join with my colleagues in urging the House to give 
its full support to the adoption of H.R. 361.
  Mr. GORDON. Mr. Speaker, I yield myself the balance of my time.
  Finally, Mr. Speaker, let me just say that this bill does not 
penalize the many legitimate sports agents. This bill does not stop any 
athlete from, with full information, going pro. Also, this bill does 
not set up a national sports police.
  What it does is it deputizes the various States' attorneys general to 
follow up on the deceptive acts, and deal with these incidents or these 
problems on a local basis.
  Once again, my thanks to all the Members that have made this bill 
possible to come to the floor and possibly pass today.
  Mr. Speaker, I yield back the balance of my time.
  Mr. STEARNS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, just in conclusion, maybe just a quick history on this 
bill.
  The gentleman from Tennessee (Mr. Gordon) dropped the bill in the 
107th Congress. We had a hearing out of the subcommittee that I chair, 
the Subcommittee on Commerce, Trade, and Consumer Protection. We had 
the NCAA and we had lots of witnesses. Everybody endorsed this bill.
  I think for those who are worried that this is a Federal mandate, it 
is basically a bill to give a little bit more support to the States, 
particularly those States, perhaps in Nebraska, where they do not have 
any law, and give those State attorneys general the opportunity to 
prosecute those unscrupulous sports agents.
  I think the gentleman from Tennessee (Mr. Gordon) is to be commended 
for his hard work on this over a long period of time, and for pushing 
it forward.
  Also, I want to thank the gentleman from Louisiana (Mr. Tauzin) for 
allowing a hearing on this. Eventually we are here this afternoon. I 
wish we could have passed this in the 107th Congress, but we are here 
in the 108th Congress, and hopefully we will get this bill passed.
  Again, I commend all those who have been involved.
  Mr. DINGELL. Mr. Speaker, I am a proud cosponsor of H.R. 361, the 
``Sports Agent Responsibility and Trust Act'' (SPARTA). This 
legislation will hold unscrupulous sports agents responsible for their 
actions by authorizing the Federal Trade Commission and State attorneys 
general to enforce common sense protections for amateur athletes. I 
commend the chief sponsor of this bill, the gentleman from Tennessee, 
for his hard work on this bill.
  This legislation empowers students with the ability to decide when 
and where they become professionals and protects them from the 
underhanded tactics that have become all too common in this field. 
Under this legislation, student athletes can no longer be tricked into 
signaling contracts through the deception or bribery of a sports agent. 
And agents must clearly disclose to students that they will no longer 
be amateurs if they sign an agency contract, before they sign the 
contract.
  SPARTA enjoys wide support in the academic community and has been 
endorsed by the NCAA and over 30 colleges and universities, including 
the University of Michigan. I urge my colleagues to support this 
legislation and send a strong message to the unprincipled sports agents 
who prey on our youth.
  Mr. STEARNS. Mr. Speaker, I yield back the balance of my time.

                              {time}  1445

  The SPEAKER pro tempore (Mr. Bass). The question is on the motion 
offered by the gentleman from Florida (Mr. Stearns) that the House 
suspend the rules and pass the bill, H.R. 361, as amended.
  The question was taken; and (two-thirds having voted in favor 
thereof) the rules were suspended and the bill, as amended, was passed.
  A motion to reconsider was laid on the table.

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