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[House Report 108-24]
[From the U.S. Government Publishing Office]

108th Congress                                            Report 108-24
                        HOUSE OF REPRESENTATIVES
 1st Session                                                     Part 2

======================================================================

 
               SPORTS AGENT RESPONSIBILITY AND TRUST ACT

                                _______
                                

                  June 2, 2003.--Ordered to be printed

                                _______
                                

 Mr. Sensenbrenner, from the Committee on the Judiciary, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 361]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on the Judiciary, 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, reports 
favorably thereon with an amendment and recommends that the 
bill as amended do pass.

                                CONTENTS

                                                                   Page
The Amendment....................................................     1
Purpose and Summary..............................................     4
Background and Need for the Legislation..........................     4
Hearings.........................................................     5
Committee Consideration..........................................     5
Vote of the Committee............................................     6
Committee Oversight Findings.....................................     6
New Budget Authority and Tax Expenditures........................     6
Congressional Budget Office Cost Estimate........................     6
Performance Goals and Objectives.................................     8
Constitutional Authority Statement...............................     8
Section-by-Section Analysis and Discussion.......................     8
Changes in Existing Law Made by the Bill, as Reported............     9
Markup Transcript................................................     9

    The amendment is as follows:
    Strike all after the enacting clause and insert the 
following:

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.
    (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.

                          Purpose and Summary

    The purpose of H.R. 361, the ``Sports Agent Responsibility 
and Trust Act,'' is 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 (FTC). It provides 
for a cause of action for economic damages to be sought by 
either the FTC, the attorney general for the State of 
occurrence, or the educational institution harmed.

                Background and Need for the Legislation

    The multi-million dollar value of professional athlete 
salaries, signing bonuses, and endorsement contracts has 
produced a proliferation of questionable ethical practices by 
some sports agents. Unscrupulous agents, or their 
representatives, are willing to break the rules in order to 
sign promising student athletes to a representational contract 
because the fees that accompany the representation of a 
professional athlete are considerable, and the agent will risk 
little in comparison to the athlete or school.
    Motivated largely by financial gain, unscrupulous agents 
have gone to extreme measures with promising student athletes 
with even a remote chance of becoming a professional athlete. 
However, whether a college athlete will succeed professionally 
is highly speculative. It has been estimated that an National 
Collegiate Athletic Association (NCAA) athlete has little more 
than a 1-percent chance of making a professional team, even in 
a backup role.\1\ These agents, or their associates--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 
him or her, unrealistic promises, and even pressuring the 
athlete through intimidation and threats. In some cases, these 
agents have made secret payments to student athletes or their 
families, and then blackmailed them into signing a contract 
with the threat that they would disclose the violation of 
collegiate rules thus jeopardizing the student's competitive 
eligibility. These acts go unpunished due to disparate, 
ineffective, or in some cases, a complete absence of State 
laws.
---------------------------------------------------------------------------
    \1\ NCAA Online, Estimated Probability of Competing in Athletics 
Beyond the High School Interscholastic Level (Visited May 13, 2003) 
/www.ncaa.org/research/prob--of--competing/>.
---------------------------------------------------------------------------
    A student athlete entering into an oral or written agency 
contract generally forfeits collegiate eligibility.\2\ In 
addition, the college or university may 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 
revenue.
---------------------------------------------------------------------------
    \2\ Id., NCAA Regulations Related to Agents and Other Amateurism 
Provisions, Sub II (Visited May 13, 2003) /www1.ncaa.org/
membership/enforcement/agents/agentPacket#Bylaws>.
---------------------------------------------------------------------------
    Currently, there is no Federal law that directly addresses 
the actions of these agents, although a majority of the States 
do regulate--in varying degrees--athlete agents and their 
conduct. Most recently, the National Conference of 
Commissioners on Uniform State Laws passed the Uniform 
Athlete's Agent Act (UAAA) in 2000 addressing the conduct, 
practices, and registration of athlete agents. 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.

                                Hearings

    On May 15, 2003, the Subcommittee on Commercial and 
Administrative Law held a hearing on H.R. 361, at which 
Congressman Bart Gordon, Congressman Tom Osborne, and sports 
agent Scott Boras testified. In addition, written testimony was 
provided by the National Collegiate Athletic Association.

                        Committee Consideration

    On May 15, 2003, the Subcommittee on Commercial and 
Administrative Law marked up the bill and ordered it favorably 
reported with an amendment to the full Committee. The 
amendment, offered by Chairman Cannon, made clarifying 
revisions to the bill. This amendment, which was adopted by 
voice vote, does the following: (1) clarifies the right of an 
individual student athlete to have available legal counsel 
outside of the realm of representative agency; (2) gives 
additional emphasis to the provision on the use of loans or co-
signing of debts for the student athlete or those associated 
with him in anticipation of future agency representation of 
that athlete; (3) strikes overly broad language relating to 
court remedies; and (4) specifies that the bill does not 
prohibit an individual from seeking any remedies available to 
them under existing State law or equity. Mr. Cannon's amendment 
was adopted by voice vote.
    On May 21, 2003, the Committee met in open session and 
ordered favorably reported the bill H.R. 361, with amendment, 
by voice vote, a quorum being present. At the full Committee 
markup, Mr. Watt offered an amendment that clarified that 
nothing in the bill prohibits an individual from seeking any 
remedy under Federal law. Mr. Watt's amendment was adopted by 
voice vote.

                         Vote of the Committee

    In compliance with clause 3(b) of the rule XIII of the 
Rules of the House of Representatives, the Committee notes that 
no rollcall votes occurred during the Committee's consideration 
of H.R. 361.

                      Committee Oversight Findings

    In compliance with clause 3(c)(1) of rule XIII of the Rules 
of the House of Representatives, the Committee reports that the 
findings and recommendations of the Committee, based on 
oversight activities under clause 2(b)(1) of rule X of the 
Rules of the House of Representatives, are incorporated in the 
descriptive portions of this report.

               New Budget Authority and Tax Expenditures

    Clause 3(c)(2) of House rule XIII is inapplicable because 
this legislation does not provide new budgetary authority or 
increased tax expenditures.

               Congressional Budget Office Cost Estimate

    In compliance with clause 3(c)(3) of rule XIII of the Rules 
of the House of Representatives, the Committee sets forth, with 
respect to the bill, H.R. 361, the following estimate and 
comparison prepared by the Director of the Congressional Budget 
Office under section 402 of the Congressional Budget Act of 
1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                      Washington, DC, May 28, 2003.
Hon. F. James Sensenbrenner, Jr., Chairman,
Committee on the Judiciary,
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 Julie 
Middleton (for Federal costs), who can be reached at 226-2860, 
Victoria Heid Hall and Gregory Waring (for the state and local 
impact), who can be reached at 225-2330, and Paige Piper/Bach 
(for the private-sector impact), who can be reached at 226-
2940.
            Sincerely,
                                       Douglas Holtz-Eakin.

Enclosure

cc:
        Honorable John Conyers, Jr.
        Ranking Member
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 
appropriated funds.
    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).
    On January 31, 2003, CBO transmitted a cost estimate for 
H.R. 361 as ordered reported by the House Committee on Energy 
and Commerce on January 29, 2003. The two versions of the bill 
are similar, and the cost estimates are identical.
    The CBO staff contacts for this estimate are Julie 
Middleton (for Federal costs), who can be reached at 226-2860, 
Victoria Heid Hall and Gregory Waring (for the State and local 
impact), who can be reached at 225-2330, and Paige Piper/Bach 
(for the private-sector impact), who can be reached at 226-
2940. The estimate was approved by Peter H. Fontaine, Deputy 
Assistant Director for Budget Analysis.

                    Performance Goals and Objectives

    H.R. 361 does not authorize funding. Therefore, clause 
3(c)(4) of rule XIII of the Rules of the House of 
Representatives is inapplicable.

                   Constitutional Authority Statement

    Pursuant to clause 3(d)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee finds the authority for 
this legislation in article I, section 8, of the Constitution.

               Section-by-Section Analysis and Discussion

    Section 1 provides that this Act may be cited as the 
``Sports Agent Responsibility and Trust Act.''
    Section 2 defines terms used within the bill. Of special 
note is the definition of ``athlete agent,'' which is limited 
to those who are representing the athlete under an agency 
contract, and is not meant to deter other legal counsel or 
assistance.
    Section 3 defines conduct prohibited by an athlete agent. 
Prohibited acts include giving false or misleading information; 
providing anything of value to the athlete or anyone associated 
with the athlete before entering into a representative 
contract; requiring disclosure at the time of signing into the 
contract that the athlete may forfeit NCAA eligibility as a 
result of the signing of the contract; and the predating or 
postdating of the contract.
    Section 4 defines a violation of this Act as an unfair or 
deceptive act or practice, and as such, a violation enforceable 
under the Federal Trade Commission guidelines relating to such 
a violation.
    Section 5 gives an attorney general of a State where this 
action occurs standing to enforce this Act. The attorney 
general may file a civil action on behalf of the inhabitants of 
the State to enjoin the actions, enforce compliance with this 
act, and obtain damages, restitution, or other compensation on 
behalf of the residents of the State.
    Section 6 gives protection to educational institutions 
which are damaged as a result of the conduct this act seeks to 
prevent. If proper notice, which should occur within 72 hours 
after signing an agency agreement or the next athletic event 
which the student athlete may participate in (whichever occurs 
first), is not given to the individual in charge of that 
university's athletic program, a violation of this act occurs. 
After such violation, the educational institution is given a 
civil remedy for the damages the institution suffered as a 
result of the non-disclosure.
    Section 7 states that nothing in this act is meant to 
prohibit an individual from seeking any remedies available to 
them under existing State law or equity. Mr. Watt's amendment, 
which was adopted by the full Committee, extended this 
provision to existing Federal remedies.
    Section 8 expresses the sense of Congress that States 
should enact the UAAA as drafted by the Uniform Conference of 
Commissioners on Uniform State Laws.

         Changes in Existing Law Made by the Bill, as Reported

    In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, the Committee notes H.R. 361 
makes no changes to existing law.

                           Markup Transcript

                            BUSINESS MEETING

                        WEDNESDAY, MAY 21, 2003

                  House of Representatives,
                                Committee on the Judiciary,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10:01 a.m., in 
Room 2141, Rayburn House Office Building, Hon. F. James 
Sensenbrenner, Jr. (Chairman of the Committee) presiding.
    [Intervening business.]
    Chairman Sensenbrenner. The next item on the agenda is H.R. 
361, the ``Sports Agent Responsibility and Trust Act.'' The 
Chair recognizes the gentleman from Utah, Mr. Cannon, the 
Chairman of the Subcommittee on Commercial and Administrative 
Law, for a motion.
    Mr. Cannon. The Subcommittee on Commercial and 
Administrative Law favorably reports the bill H.R. 361 with a 
single amendment in the nature of a substitute and urges--or 
moves its adoption by the full Committee.
    Chairman Sensenbrenner. Without objection, the bill will be 
considered as read and open for amendment at any point.
    [The bill, H.R. 361, follows:]
      
      

  

    Chairman Sensenbrenner. And the Subcommittee amendment in 
the nature of a substitute, which the Members have before them, 
will be considered as read, considered as the original text for 
purposes of amendment, and open for amendment at any point.
    [The amendment in the nature of a substitute follows:]
      
      

  

    Chairman Sensenbrenner. The Chair recognizes the gentleman 
from Utah, Mr. Cannon, to strike the last word.
    Mr. Cannon. Thank you, Mr. Chairman.
    The Subcommittee held a hearing on this bill on May 15th 
and reported the bill the same day. The Subcommittee adopted an 
amendment of a substitute with bipartisan support, clarifying a 
number of matters within the bill as well as specifically 
preserving the right of student athletes to seek individual 
redress from any contractual violations under existing State 
law or equity.
    Mr. Chairman, this is an important piece of legislation and 
one which deserves the Committee's full support. H.R. 361 will 
address the interaction of sports agents with student athletes. 
It will give guidelines for sports agents to adhere to in the 
recruitment and allow the Federal Trade Commission or the 
attorney general of the State of occurrence to go after agents 
who do not adhere to the guidelines. Set out in this bill--that 
is, the guidelines set out in this bill.
    In addition, it provides a cause of action for educational 
institutions against a sport agent whose actions result in 
making a player ineligible for collegiate competition. In an 
all too common sequence of unethical conduct, such agents often 
fail to properly notify the university, thus causing sanctions, 
forfeitures, or other penalties to the university for which it 
has no fault.
    This bill is patterned after language in the Uniform 
Athlete Agents Act, which has been adopted by over 20 States. 
The need for a Federal solution is clear when one considers the 
interstate nature of collegiate athletics. Currently there is 
nothing to stop an unscrupulous sports agent from victim 
shopping--or victim forum shopping by waiting to approach star 
athletes in States with no appropriate enforcement tools, 
States where those actions can occur without fear of 
retribution or redress.
    This bill does not indict the conduct of all sports agents. 
Not all are the Bob Sugars, as depicted in the movie ``Jerry 
Maguire.'' The bill seeks to protect the often guileless 
student athlete from real-life consequences of dealing with the 
unscrupulous. H.R. 361 was originally referred to the Committee 
on Energy and Commerce, which reported this legislation by 
voice vote on January 29th. The Committee on Judiciary received 
a sequential referral, which expires on June 1.
    Again, I urge the Committee to support this bill. Thank 
you, Mr. Chairman.
    Chairman Sensenbrenner. In the absence of Mr. Watt, does 
any Member of the minority wish to make an opening statement? 
If not, without objection, all Members may enter opening 
statements in the record at this point.
    Are there amendments?
    Ms. Jackson Lee. Mr. Chairman?
    Chairman Sensenbrenner. Does Mr. Watt have an opening 
statement he'd like to make?
    Mr. Watt. No, I don't have an opening statement. I have an 
amendment, though.
    Chairman Sensenbrenner. Okay.
    Mr. Watt. Whenever you get to that point.
    Chairman Sensenbrenner. We're at that point now. The clerk 
will report the Watt amendment.
    The Clerk. Mr. Chairman, I don't have a Watt amendment.
    Mr. Watt. Right here.
    Chairman Sensenbrenner. The clerk will forbear.
    The clerk will now report the Watt amendment.
    The Clerk. Amendment to the amendment in the nature of a 
substitute to H.R.----
    Mr. Watt. Mr. Chairman, I ask unanimous consent that the 
amendment be considered as read.
    The Clerk.--361 offered by Mr.----
    Chairman Sensenbrenner. Without objection, the amendment is 
considered as read.
    [Mr. Watt's amendment follows:]
    
    
    Chairman Sensenbrenner. The gentleman from North Carolina 
is recognized for 5 minutes.
    Mr. Watt. I thank the Chairman, and I apologize to the 
Chairman for being in and out. But there are two markups going 
on. Fortunately, they're all in the same hall, and I'm trying 
to run back and forth.
    The question came up in the Subcommittee about whether 
individuals have a cause of action under this bill as opposed 
to just the FTC and universities who may be adversely impacted 
by the acts of agents. And Mr. Cannon clarified that partially 
in his amendment to the bill which was passed in the 
Subcommittee during our Subcommittee consideration. 
Unfortunately, Mr. Cannon's amendment makes it explicit that 
whatever individual rights a person has under State law or 
equity are protected, but he didn't--his amendment didn't make 
reference to Federal law. And I'm not sure that there are 
causes of action under the Federal law other than with the FTC. 
But after looking at this quite extensively, I thought--and I 
think everybody agrees--that we should not be wiping out any 
individual causes of action that individual claimants might 
have as a result of passing this legislation, which is designed 
to advance accountability on the part of sports agents.
    And so this simply makes it clear that if there are other 
potential Federal causes of action other than under this bill, 
individual student athletes would have the right to pursue them 
also, and I will yield to Mr. Cannon if he is trying to get me 
to yield.
    Mr. Cannon. Thank you. I was actually just wanting to let 
you finish before I asked a question.
    I'm not sure whether or not to oppose or accept the 
amendment. I can't think of anything--a Federal action that 
exists now that would favor students. Do you have something in 
mind when you----
    Mr. Watt. No, I don't. But I guess, in effect, what we're 
saying is if there is any individual cause of action under 
Federal law, we don't want to foreclose that. We're not 
creating a cause of action, but we want to make it explicit 
that we're not foreclosing the cause of action.
    Mr. Cannon. If the gentleman would yield further, it is my 
sense that what we're doing with this section is to not limit, 
and I don't have a sense of the implications of adding Federal, 
except to suggest that we don't want to--we don't want to 
federalize more than we're trying to--we're trying to be very 
narrow in what we're doing with this and not expand Federal 
actions or causes of action.
    Mr. Watt. And I absolutely agree with the gentleman, and if 
the gentleman will take a look at his language that he inserted 
at the Subcommittee level with the amendment that you offered, 
on page 10 you say, ``Nothing in this Act shall be construed to 
prohibit an individual from seeking any remedies available 
under existing State law or equity.''
    All we're doing is applying the same thing to any remedies 
that might----
    Chairman Sensenbrenner. Will the gentleman yield?
    Mr. Watt.--exist under Federal law.
    Chairman Sensenbrenner. Will the gentleman yield?
    Mr. Watt. I'm happy to yield to the Chairman.
    Chairman Sensenbrenner. I think the amendment is a logical 
one, and I'm particularly concerned if ``Federal'' is left out 
that a diversity suit against a sports agent that did not 
reside in the State where the student or the educational 
institution resided would end up being precluded from going 
into Federal court. So I think the gentleman's amendment is a 
constructive addition.
    Mr. Watt. Well, I thank the gentleman, and the gentleman 
knows----
    Mr. Cannon. Would the gentleman----
    Mr. Watt.--support getting all these things into Federal 
court. So----
    Mr. Cannon. Would the gentleman yield for a further 
question?
    Mr. Watt. Yes, I will yield to Mr. Cannon.
    Mr. Cannon. We're about to----
    Mr. Watt. I was saying that facetiously, of course, Mr. 
Chairman.
    Mr. Cannon. We're about to mark up a class action lawsuit. 
Does the gentleman anticipate that this will have any effect on 
class actions?
    Mr. Watt. No, sir. I don't think so. These are individual 
actions that we're dealing with.
    Chairman Sensenbrenner. If the gentleman will yield 
further, it might have an effect on class actions if there are 
a whole lot of athletes that are----
    Mr. Watt. Right, that could possibly be. But we're still--
hope springs eternal that the next bill will be defeated.
    Chairman Sensenbrenner. The gentleman's time has expired. 
The question----
    Mr. Cannon. Mr. Chairman, I'm willing to accept the 
gentleman's amendment and would like to go on record saying 
that.
    Chairman Sensenbrenner. The question is on adoption of the 
amendment offered by the gentleman from North Carolina, Mr. 
Watt. Those in favor will say aye. Opposed, no.
    The ayes appear to have it. The ayes have it, and the 
amendment is agreed to.
    Are there further amendments? If there are no further 
amendments, the Chair notes the presence of a reporting quorum. 
Those in favor of reporting the bill favorably will say aye. 
Opposed, no.
    The ayes appear to have it. The ayes have it, and the 
motion to report favorably is agreed to.
    Without objection, the bill will be reported favorably to 
the House in the form of a single amendment in the nature of a 
substitute as amended, incorporating the amendments offered 
here today. Without objection--adopted here today, excuse me. 
Without objection, the Chairman is authorized to move to go to 
conference pursuant to House rules. Without objection, the 
staff is directed to make any technical and conforming changes, 
and all Members will be given 2 days as provided by House rules 
in which to submit additional, dissenting, supplemental, or 
minority views.

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