Procedures for Submission of Rules Under the Horseracing Integrity and Safety Act, 54819-54826 [2021-21306]

Agencies

• FEDERAL TRADE COMMISSION

[Federal Register Volume 86, Number 190 (Tuesday, October 5, 2021)]
[Rules and Regulations]
[Pages 54819-54826]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-21306]


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FEDERAL TRADE COMMISSION

16 CFR Part 1


Procedures for Submission of Rules Under the Horseracing 
Integrity and Safety Act

AGENCY: Federal Trade Commission.

ACTION: Final rule.

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SUMMARY: The Federal Trade Commission (``FTC'' or ``Commission'') is 
issuing rules pursuant to the Horseracing Integrity and Safety Act 
(``Act'') to provide procedures for the Horseracing Integrity and 
Safety Authority (``Authority'') to submit its proposed rules and 
proposed rule modifications to the Commission for review.

DATES: These rule revisions are effective on October 5, 2021.

FOR FURTHER INFORMATION CONTACT: Austin King (202-326-3166), Associate 
General Counsel for Rulemaking, Office of the General Counsel, Federal 
Trade Commission, 600 Pennsylvania Avenue NW, Washington, DC 20580.

SUPPLEMENTARY INFORMATION: The Horseracing Integrity & Safety Act,\1\ 
enacted on December 27, 2020, directs the Federal Trade Commission to 
oversee the activities of a private, self-regulatory organization 
called the Horseracing Integrity and Safety Authority.
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    \1\ 15 U.S.C. 3051 through 3060.
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    Section 4(a) of the Act, 15 U.S.C. 3053(a), requires the Authority 
to submit to the Commission, in accordance with such rules as the 
Commission may prescribe under Section 553 of Title 5, United States 
Code, any proposed rule, or proposed modification to a rule, of the 
Authority relating to: (1) The bylaws of the Authority; (2) a list of 
permitted and prohibited medications, substances, and methods, 
including allowable limits of permitted medications, substances, and 
methods; (3) laboratory standards for accreditation and protocols; (4) 
standards for racing surface quality maintenance; (5) racetrack safety 
standards and protocols; (6) a program for injury and fatality data 
analysis; (7) a program of research and education on safety, 
performance, and anti-doping and medication control; (8) a description 
of safety, performance, and anti-doping and medication control rule 
violations applicable to covered horses and covered persons; (9) a 
schedule of civil sanctions for violations; (10) a process or 
procedures for disciplinary hearings; and (11) a formula or methodology 
for determining the assessments described in 15 U.S.C. 3052(f).
    Accordingly, the Commission is adding a new subpart S to part 1 of 
its Rules of Practice, to provide procedures for the Authority to file 
its proposed rules and proposed modifications to existing rules with 
the Commission for review.

I. Section 1.140--Definitions

    Section 1.140 defines relevant terms used in the proposed 
regulations. Each definition is based on a corresponding definition 
contained in Section 2 of the Act, 15 U.S.C. 3051, except as otherwise 
noted below.
    The definition of ``HISA Guidance'' derives from Section 5(g)(1) of 
the Act, 15 U.S.C. 3054(g)(1), which states the Authority may issue 
guidance that ``sets forth an interpretation of an existing rule, 
standard, or procedure of the Authority'' or a ``policy or practice 
with respect to the administration or enforcement of such an existing 
rule, standard, or procedure'' and ``relates solely to the 
administration of the Authority; or any other matter, as specified by 
the Commission, by rule, consistent with the public interest and the 
purposes of this subsection [15 U.S.C. 3054(g)(1)].'' The Commission is 
adopting this definition and adding that HISA Guidance does not have 
the force of law, to distinguish HISA Guidance from a proposed 
modification to a rule.
    The Act does not contain definitions for ``proposed rule'' or 
``proposed modification.'' However, because these terms are used 
frequently throughout the regulations, the Commission is defining them 
for clarity. ``Proposed rule'' is defined as any rule proposed by the 
Authority pursuant to the Act. ``Proposed rule modification'' or 
``modification'' is defined as any proposed modification to a rule, 
proposed rule change, or any interpretation or statement of policy or 
practice relating to an existing rule of the Authority that is not HISA 
Guidance and would have the force of law if

[[Page 54820]]

approved as a final rule. A proposed modification is distinguished from 
HISA Guidance in that a modification would have the force of law if 
approved and must therefore be approved by the Commission pursuant to 
Section 4(b)(2) of the Act, 15 U.S.C. 3053(b)(2). HISA Guidance need 
not be approved by the Commission but takes effect upon submission to 
the Commission pursuant to Section 5(g)(3) of the Act, 15 U.S.C. 
3054(g)(3).

II. Section 1.141--Required Submissions

    The Act requires the Authority to submit proposed rules or proposed 
rule modifications on certain subjects to the Commission for approval. 
These subjects are set forth in Section 4(a) of the Act, 15 U.S.C. 
3053(a), which states the Authority must submit to the Commission, in 
accordance with such rules as the Commission may prescribe under 
Section 553 of Title 5, any proposed rule, or proposed modification to 
a rule, of the Authority relating to: (1) The bylaws of the Authority; 
(2) a list of permitted and prohibited medications, substances, and 
methods, including allowable limits of permitted medications, 
substances, and methods; (3) laboratory standards for accreditation and 
protocols; (4) standards for racing surface quality maintenance; (5) 
racetrack safety standards and protocols; (6) a program for injury and 
fatality data analysis; (7) a program of research and education on 
safety, performance, and anti-doping and medication control; (8) a 
description of safety, performance, and anti-doping and medication 
control rule violations applicable to covered horses and covered 
persons; (9) a schedule of civil sanctions for violations; (10) a 
process or procedures for disciplinary hearings; and (11) a formula or 
methodology for determining assessments described in 15 U.S.C. 3052(f). 
The Commission is adopting this language in its regulations.
    The Commission is also adding a provision that the Authority must 
submit ``any other proposed rule or modification the Act requires the 
Authority to submit to the Commission for approval.'' For instance, the 
Act requires the Authority to submit rules regarding modifications to 
baseline anti-doping standards (15 U.S.C. 3055(g)(3)(b)) and 
modifications to racetrack safety rules (15 U.S.C. 3056(c)(2)(B)(ii)). 
Section 5(c)(2) of the Act, 15 U.S.C. 3054(c)(2), requires the 
Authority to submit to the Commission for approval any rules and 
procedures under Section 5(c)(1)(A) of the Act, 15 U.S.C. 
3054(c)(1)(A), authorizing access to offices, racetrack facilities, 
other places of business, books, records, and personal property of 
covered persons used in the care, treatment, training, and racing of 
covered horses; authorizing the issuance and enforcement of subpoenas 
and subpoenas duces tecum; and authorizing other investigatory powers 
of the nature and scope exercised by State racing commissions before 
the program effective date. Such proposed rules and modifications must 
also be submitted to the Commission for approval.

III. Section 1.142--Submission of Proposed Rule or Modification

    The Act requires the Commission to evaluate the Authority's 
proposed rules and modifications to determine whether they are 
consistent with the Act and the applicable rules approved by the 
Commission. See 15 U.S.C. 3053(c)(2). To avoid delays in the rule 
review process, the Commission is requiring the Authority to submit the 
information necessary for it to evaluate the proposed rule or 
modification promptly and efficiently. Section 1.142 is designed to 
elicit the information the Commission needs to determine whether the 
proposed rule or modification is consistent with the Act and the rules 
and regulations issued thereunder.

A. Contents of Submission

    For a submission to qualify as a proposed rule or proposed 
modification to a rule under Section 4(a) of the Act, 15 U.S.C. 
3053(a), the Authority must submit a complete draft of the Federal 
Register document for its proposed or modified rule, which includes the 
text of the rule and a statement of the purpose of, and statutory basis 
for, the proposed rule or modification. The Commission's intention is 
to require the Authority to provide an explanation of its rules that 
will allow both the Commission and the public to understand the nature 
and purpose of its proposed rules or modifications--the reasons for 
adopting the proposed rule or modification; any problems the proposed 
rule or modification is intended to address and how the proposed rule 
or modification will resolve those problems; and how the proposed rule 
or modification will affect covered persons, covered horses, and 
covered horseraces.
    The Commission is also requiring the Authority to explain the 
statutory basis for its proposed rules or modifications. To evaluate a 
proposed rule or modification, the Commission must be able to 
understand why the Authority believes its proposed rule or modification 
is consistent with the Act and the applicable rules approved by the 
Commission. Evaluation of a proposed rule or modification will also be 
aided by the Authority's description of any reasonable alternatives it 
considered and the reasons it selected the proposed rule or 
modification over the alternatives.
    The Act does not give the Authority broad discretion in developing 
rules. It sets forth guardrails, in the form of baseline standards for 
anti-doping and medication control (15 U.S.C. 3055(g)(2)(A)), racetrack 
safety standards which the Authority must consider (15 U.S.C. 
3056(a)(2)), guidelines for determining funding and calculating costs 
(15 U.S.C. 3052(f)(1)(C)(ii)), a specific formula for the assessment 
and collection of fees (15 U.S.C. 3052(f)(3)(C)), who must register 
with the Authority and the conditions of registration (15 U.S.C. 
3054(d)), guidelines for establishing rule violations (15 U.S.C. 
3057(a)(2)), requisite elements of the Authority's results management 
and disciplinary program (15 U.S.C. 3057(c)(2)), guidelines for 
establishing civil sanctions (15 U.S.C. 3057(d)(2)), and more. 
Accordingly, the Authority must explain why its proposed rule or 
modification is consistent with any standards in the Act and the rules 
approved by the Commission. Because the requisite considerations for 
anti-doping and racetrack safety are the most prescriptive, this 
section specifically addresses those standards and factors. The less 
prescriptive standards and factors must also be addressed, and the 
Commission provides for this in a less prescriptive rule, as discussed 
below.
1. Anti-Doping and Medication Control Program Considerations
    When proposing a rule or modification to the horseracing anti-
doping and medication control program, the Authority must explain how 
it considered the factors in Section 6 of the Act, 15 U.S.C. 3055, 
including the unique characteristics of a breed of horse made subject 
to the Act by election of a State racing commission or breed governing 
organization for such horse pursuant to Section 5(l) of the Act, 15 
U.S.C. 3054(l), as required by Section 6(a)(2) of the Act, 15 U.S.C. 
3055(a)(2). The Authority must explain how it considered the factors in 
Section 6(b) of the Act, 15 U.S.C. 3055(b), namely that: (1) Covered 
horses should compete only when they are free from the influence of 
medications, other foreign substances, and methods that affect their 
performance; (2) covered horses that are injured or unsound should not 
train or participate in covered races, and the use

[[Page 54821]]

of medications, other foreign substances, and treatment methods that 
mask or deaden pain in order to allow injured or unsound horses to 
train or race should be prohibited; (3) rules, standards, procedures, 
and protocols regulating medication and treatment methods for covered 
horses and covered races should be uniform and uniformly administered 
nationally; (4) to the extent consistent with chapter 57A of title 15, 
consideration should be given to international anti-doping and 
medication control standards of the International Federation of 
Horseracing Authorities and the Principles of Veterinary Medical Ethics 
of the American Veterinary Medical Association; (5) the administration 
of medications and treatment methods to covered horses should be based 
on an examination and diagnosis that identifies an issue requiring 
treatment for which the medication or method represents an appropriate 
component of treatment; (6) the amount of therapeutic medication a 
covered horse receives should be the minimum necessary to address the 
diagnosed health concerns identified during the examination and 
diagnostic process; and (7) the welfare of covered horses, the 
integrity of the sport, and the confidence of the betting public 
require full disclosure to regulatory authorities regarding the 
administration of medications and treatments to covered horses.
    In addition, Section 6(g)(2)(A) of the Act, 15 U.S.C. 
3055(g)(2)(A), provides that certain baseline anti-doping and 
medication control rules must constitute the initial rules of the 
horseracing anti-doping and medication control program and, except as 
exempted pursuant to Section 6(e) and (f) of the Act, 15 U.S.C. 3055(e) 
and (f), remain in effect at all times after the program effective 
date. Such baseline anti-doping and medication control rules include: 
(1) The lists of permitted and prohibited substances (including drugs, 
medications, and naturally occurring substances and synthetically 
occurring substances) in effect for the International Federation of 
Horseracing Authorities, including the International Federation of 
Horseracing Authorities International Screening Limits for urine, dated 
May 2019, and the International Federation of Horseracing Authorities 
International Screening Limits for plasma, dated May 2019; (2) the 
World Anti-Doping Agency International Standard for Laboratories 
(version 10.0), dated November 12, 2019; (3) the Association of Racing 
Commissioners International out-of-competition testing standards, Model 
Rules of Racing (version 9.2); and (4) the Association of Racing 
Commissioners International penalty and multiple medication violation 
rules, Model Rules of Racing (version 6.2). In the case of a conflict 
among the rules, Section 6(g)(2)(B) of the Act, 15 U.S.C. 
3055(g)(2)(B), provides that the most stringent rule shall apply. 
Accordingly, the Commission is requiring the Authority to state whether 
a proposed rule adopts the baseline standards identified in Section 
6(g)(2)(A) of the Act, 15 U.S.C. 3055(g)(2)(A). If there is a conflict 
in any baseline standards identified in Section 6(g)(2)(A) of the Act, 
15 U.S.C. 3055(g)(2)(A), the Authority must identify the conflict and 
state whether the standard it adopted is the most stringent standard. 
Under Section 6(g)(3)(C) of the Act, 15 U.S.C. 3055(g)(3)(C), ``[t]he 
Authority shall not approve any proposed modification that renders an 
anti-doping and medication control rule less stringent than the 
baseline anti-doping and medication control rules . . . without the 
approval of the anti-doping and medication control enforcement 
agency.'' Thus, for a proposed rule modification, the Authority must 
explain whether the modification renders an anti-doping and medication 
control rule less stringent than the baseline anti-doping and 
medication control rules described in Section 6(g)(2)(A) of the Act, 15 
U.S.C. 3055(g)(2)(A), and state whether the anti-doping and medication 
control enforcement agency has approved of the change.
2. Racetrack Safety Program Considerations
    Section 7 of the Act, 15 U.S.C. 3056, requires the Authority to 
consider certain factors when developing the racetrack safety program. 
Accordingly, when proposing a rule or modification to any rule 
regarding its racetrack safety program, the Authority must explain how 
the proposed rule or modification meets the requirements in Section 
7(b) of the Act, 15 U.S.C. 3056(b), which provides that the horseracing 
safety program must include the following: (1) A set of training and 
racing safety standards and protocols taking into account regional 
differences and the character of differing racing facilities; (2) a 
uniform set of training and racing safety standards and protocols 
consistent with the humane treatment of covered horses, which may 
include lists of permitted and prohibited practices or methods (such as 
crop use); (3) a racing surface quality maintenance system that takes 
into account regional differences and the character of differing racing 
facilities (which may include requirements for track surface design and 
consistency and established standard operating procedures related to 
track surface, monitoring, and maintenance, such as standardized 
seasonal assessment, daily tracking, and measurement); (4) a uniform 
set of track safety standards and protocols, that may include rules 
governing oversight and movement of covered horses and human and equine 
injury reporting and prevention; (5) programs for injury and fatality 
data analysis, that may include pre- and post-training and race 
inspections, use of a veterinarian's list, and concussion protocols; 
(6) the undertaking of investigations at racetrack and non-racetrack 
facilities related to safety violations; (7) procedures for 
investigating, charging, and adjudicating violations and for the 
enforcement of civil sanctions for violations; (8) a schedule of civil 
sanctions for violations; (9) disciplinary hearings, which may include 
binding arbitration, civil sanctions, and research; (10) management of 
violation results; (11) programs relating to safety and performance 
research and education; and (12) an evaluation and accreditation 
program that ensures racetracks in the United States meet the standards 
described in the elements of the Horseracing Safety Program.
    The Authority must also consider the safety standards in Section 
7(a)(2) of the Act, 15 U.S.C. 3056(a)(2), which provide that in the 
development of the horseracing safety program for covered horses, 
covered persons, and covered horseraces, the Authority and the 
Commission must take into consideration existing safety standards, 
including the National Thoroughbred Racing Association Safety and 
Integrity Alliance Code of Standards, the International Federation of 
Horseracing Authority's International Agreement on Breeding, Racing, 
and Wagering, and the British Horseracing Authority's Equine Health and 
Welfare program. The Commission is therefore requiring the Authority to 
explain how it considered and whether it adopted any of the standards 
in Section 7(a)(2) of the Act,15 U.S.C. 3056(a)(2). If any horseracing 
safety standards in Section 7(a)(2) of the Act, 15 U.S.C. 3056(a)(2), 
were considered but not adopted or were modified, the Authority must 
explain why it decided not to adopt or why it decided to modify such 
standard.
3. Other Considerations
    The Commission is incorporating the specific anti-doping and 
racetrack safety standards into this section because they are the most 
prescriptive and extensive, but this should not be read as an

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invitation to dispense with the less-prescriptive guardrails set forth 
in the Act. To the extent the Act requires the Authority to consider 
any factors or standards not specifically referenced in this section, 
the Authority must explain whether and how it considered those factors 
when proposing a rule or modification. For instance, when proposing a 
civil sanctions rule or modification pursuant to Section 8(d)(1) of the 
Act, 15 U.S.C. 3057(d)(1), the Authority must explain how the rule or 
modification meets the requirements of Section 8(d)(2) of the Act, 15 
U.S.C. 3057(d)(2).

B. Supporting Documentation

    The Commission is requiring the Authority to submit any pertinent 
factual information it relied on in developing its proposed rule or 
modification. More specifically, the Authority's submission to the 
Commission must include a copy of existing standards used as a 
reference for the development of a proposed rule or modification and 
any scientific data, studies, or analysis underlying the development of 
the proposed rule or modification. The Commission anticipates 
receiving, for instance, a copy of the lists of permitted and 
prohibited substances in effect for the International Federation of 
Horseracing Authorities, including the International Federation of 
Horseracing Authorities International Screening Limits for urine, dated 
May 2019, and any other rules and standards referenced in Section 
6(g)(2)(A) of the Act, 15 U.S.C. 3055(g)(2)(A) when the Authority's 
baseline rules for anti-doping are submitted. For organizational 
purposes, supporting documentation must be attached as exhibits, and 
each exhibit must clearly identify the proposed rule or modification it 
supports.

C. Redline Document for Proposed Rule Modification

    To enable the Commission to quickly and easily identify the 
substance of a proposed rule modification, the Commission is requiring 
the Authority to provide a redline document of the existing rule, 
marked with the proposed changes.

D. Timing of Submission

    Section 4(c)(1) of the Act, 15 U.S.C. 3053(c)(1) provides for a 60-
day timeframe between the Commission's publication of the Authority's 
proposed rule or modification in the Federal Register for public 
comment and the date the Commission must approve or disapprove the 
Authority's proposed rule or modification. To ensure it has sufficient 
time for review, the Commission is requiring the Authority to provide 
the information it needs to evaluate the Authority's proposed rule or 
modification at least 90 days in advance of the date the Authority 
proposes having its proposed rule or modification published in the 
Federal Register for public comment. This will give the Commission 
additional time to evaluate the Authority's proposed rule or 
modification. It should be noted this 90-day timeframe serves as a 
minimum, not a maximum, timeframe. The Secretary may shorten the 
timeframe if the Authority demonstrates that a shorter timeframe is 
necessary to meet statutory deadlines.

E. Conclusory Statements and Failure To Provide Requisite Analysis

    The Authority must provide an adequate basis for the Commission's 
review of its rules. The Commission seeks to understand the Authority's 
analysis of the information it relied on to determine whether a 
proposed rule or modification was warranted and if so, what provisions 
the rule should contain. To this end, the information required under 
this section must be sufficiently detailed and contain sufficient 
analysis to support a Commission finding that a proposed rule or 
modification satisfies the statutory requirements. A mere assertion or 
conclusory statement that a proposed rule or modification is consistent 
with the requirements of the Act, for instance, is insufficient. If the 
Authority fails to describe and justify the proposed rule or 
modification in the manner described in this section, or fails to 
submit the information required by this section, the Commission may not 
have sufficient information to make an affirmative finding that the 
proposed rule or modification is consistent with the Act and the 
applicable rules approved by the Commission.

F. Public Comments

    Section 4(d)(2) of the Act, 15 U.S.C. 3053(d)(2), provides the 
``Commission shall publish in the Federal Register any [ ] proposed 
rule, standard, or procedure and provide an opportunity for public 
comment.'' However, the Act gives the Commission only a total of 60 
days after publication to approve or disapprove a proposed rule or 
modification once it has been published in the Federal Register. Given 
that the Commission and the Authority will need time to review 
comments, the Act functionally provides for a much more limited comment 
period of approximately 30 days or less. To ensure the public has an 
adequate opportunity to review and understand the Authority's rules, 
ask questions, and provide comments, the Commission is encouraging the 
Authority to make its proposed rules publicly available and solicit 
public comments in advance of providing any submissions to the 
Commission. To avoid delays in Commission approval of its rules, the 
Authority should not wait until its proposed rule is published in the 
Federal Register to solicit its own public comments.
    In a March 21, 2021 letter \2\ to the Acting Chairwoman, Rebecca 
Kelly Slaughter, the Act's sponsors stated ``[t]he relationship between 
the [Commission] and the Authority is closely modeled on the enduring 
and effective relationship between the Securities and Exchange 
Commission (SEC) and Financial Industry Regulatory Authority (FINRA), a 
private self-regulatory organization.'' As part of its own rulemaking 
process, the FINRA Board of Governors may authorize the publication of 
its own Regulatory Notice soliciting comments on a rule proposal prior 
to its submission to the SEC.\3\ If FINRA decides to issue a Regulatory 
Notice soliciting public comment on a proposal, the comment period 
typically is open for one to two months.\4\ All comments become part of 
FINRA's ``official record'' of the rule proposal, and since December 1, 
2003, FINRA has posted all comment letters on its website.\5\ Depending 
on the comments received in response to the Regulatory Notice and any 
changes made to the proposal, FINRA staff will either return to the 
FINRA Board with a revised proposal or will file the rule proposal with 
the SEC for notice and comment.\6\ Soliciting comments, as FINRA does, 
in advance of submitting any proposed rules or modifications to the 
Commission would benefit both the Authority, the regulated community, 
and the Commission. It would provide transparency and enable the 
Authority to resolve any issues with its rules prior to their 
submission to the Commission.
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    \2\ See Letter from Senator Mitch McConnell to Acting Chairwoman 
Rebecca Kelly Slaughter (Mar. 23, 2021) (on file with the Federal 
Trade Commission).
    \3\ See FINRA Rulemaking process, https://www.finra.org/rules-guidance/rulemaking-process (last visited July 9, 2021).
    \4\ Id.
    \5\ Id.
    \6\ Id.
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    If public comments are solicited, the Commission is requiring the 
Authority to attach, as an exhibit to its submission under Sec.  1.142, 
a copy of the comments. The Commission encourages the Authority to make 
such comments publicly available on its own website. In

[[Page 54823]]

addition, the Authority's draft Federal Register document must include 
a summary of the substance of all comments received and the Authority's 
written response to all significant issues raised in such comments. 
This advance resolution of comments will greatly facilitate the process 
of review of any proposed rules or modifications the Authority submits 
to the Commission.

IV. Section 1.143--Submissions to the Secretary

    This section provides guidance for the Authority when submitting 
documents to the Secretary of the Commission.
    All rule submissions made pursuant to Sec.  1.142 and 15 U.S.C. 
3053(a), rate increases which must be reported to the Commission under 
15 U.S.C. 3052(f)(1)(C)(iv), or HISA Guidance which must be submitted 
to the Commission under 15 U.S.C. 3054(g)(2), must be emailed to the 
Secretary of the Commission at [email protected]. The subject 
line of the email must state: ``HISA Rule Submission,'' ``HISA Rate 
Increase Submission,'' or ``HISA Guidance Submission'' as applicable. 
This will enable the Secretary to easily identify submissions from the 
Authority and route them to the appropriate office.
    To facilitate Commission review, documents must be organized and 
sent in a format that will facilitate the submission of documents to 
the Office of the Federal Register. Except for supporting documentation 
submitted pursuant to Sec.  1.142(b) (existing standards used as a 
reference for the development of the proposed rule or modification, and 
scientific data, studies, or analysis underlying the development of the 
proposed rule or modification) and copies of public comments submitted 
pursuant to Sec.  1.142(f), all documents submitted to the Secretary 
must be in a word processing format. This will enable the Commission to 
more easily make modifications to Federal Register documents, provide 
feedback on rule text, and draft orders. For organizational purposes, 
the Commission is requiring submissions with more than one attachment 
to contain a table of contents in the body of the email with a brief 
description of each item. The Authority must also provide the contact 
information for a person on the staff of the Authority responsible for 
responding to questions from the Commission. To facilitate submissions 
to the Office of the Federal Register, the Commission is requiring that 
the Authority's draft Federal Register documents follow the relevant 
format and editorial requirements for regulatory documents in the 
Office of Federal Register's Document Drafting Handbook, 1 CFR parts 
18, 21, and 22. Specifically, draft Federal Register documents must 
contain proper preamble captions and content; state the purpose of, and 
basis for, the proposed rule or modification; set forth regulatory 
text, headings, and authority citations; use correct numbering, 
structure, and amendatory language; and conform to style and formatting 
established by the Office of the Federal Register and Government 
Publishing Office (see, specifically, section 2.17 (proposed rules) of 
the Office of the Federal Register's Document Drafting Handbook).
    If a document filed with the Secretary contains confidential 
information, the Secretary must be so informed, and a request for 
confidential treatment must be submitted in accordance with 16 CFR 4.9. 
Filings submitted electronically on or before 5:30 p.m. Eastern Time, 
on a business day, will be deemed filed on that business day, and all 
filings submitted after 5:30 p.m. Eastern Time, will be deemed filed on 
the next business day. This section also provides the Secretary of the 
Commission may reject a document for filing that fails to comply with 
the Commission's rules for filing in this section or Sec.  1.142. 
Finally, if the conditions in this section and Sec.  1.142 have been 
satisfied, the Commission will publish the proposed rules or 
modifications in the Federal Register for public comment.

V. Section 1.144--Approval or Disapproval of Proposed Rules or 
Modifications

    Section 4(c)(1) of the Act, 15 U.S.C. 3053(c)(1) provides, ``Not 
later than 60 days after the date on which a proposed rule or 
modification is published in the Federal Register, the Commission shall 
approve or disapprove the proposed rule or modification.'' In addition, 
Section 4(c)(2) of the Act, 15 U.S.C. 3053(c)(2), provides ``[t]he 
Commission shall approve a proposed rule or modification if the 
Commission finds that the proposed rule or modification is consistent 
with [ ] this chapter; and [ ] applicable rules approved by the 
Commission.'' Accordingly, Sec.  1.144 provides the Commission will 
approve or disapprove a proposed rule or modification by issuing an 
order within 60 days of the date the proposed rule or modification was 
published in the Federal Register for public comment. The Commission 
will approve a proposed rule or modification if it finds such proposed 
rule or modification is consistent with the Act and the applicable 
rules approved by the Commission. Further, a proposed rule or 
modification will not take effect unless it has been approved by the 
Commission.
    Because these rule revisions relate solely to agency procedure and 
practice, publication for notice and comment is not required under the 
Administrative Procedure Act. 5 U.S.C. 553(b).\7\
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    \7\ For this reason, the requirements of the Regulatory 
Flexibility Act are also inapplicable. 5 U.S.C. 601(2), 604(a). 
Likewise, the amendments do not modify any FTC collections of 
information within the meaning of the Paperwork Reduction Act. 44 
U.S.C. 3501 et seq.
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List of Subjects in 16 CFR Part 1

    Administrative practice and procedure.

    For the reasons set forth in the preamble, the Federal Trade 
Commission amends title 16, chapter I, subchapter A of the Code of 
Federal Regulations as follows:

PART 1--GENERAL PROCEDURES

0
1. The authority citation for part 1 continues to read as follows:

    Authority: 15 U.S.C. 46; 15 U.S.C. 57a; 5 U.S.C. 552; 5 U.S.C. 
601 note.


0
2. Add subpart S to read as follows:

Subpart S--Procedures for Submissions Under the Horseracing 
Integrity and Safety Act

Sec.
1.140 Definitions.
1.141 Required submissions.
1.142 Submission of proposed rule or modification.
1.143 Submissions to the Secretary.
1.144 Approval or disapproval of proposed rules and proposed rule 
modifications.

    Authority: 15 U.S.C. 3053.


Sec.  1.140  Definitions.

    When used in relation to the Horseracing Integrity and Safety Act, 
15 U.S.C. 3051 through 3060, and this subpart--
    Act means the Horseracing Integrity and Safety Act, 15 U.S.C. 3051 
through 3060.
    Breeder means a person who is in the business of breeding covered 
horses.
    Commission means the Federal Trade Commission.
    Covered horse means any Thoroughbred horse, or any other horse made 
subject to the Act by election of the applicable State racing 
commission or the breed governing organization for such horse under 15 
U.S.C. 3054(l), during the period--
    (1) Beginning on the date of the horse's first timed and reported 
workout at a racetrack that participates in covered horseraces or at a 
training facility; and

[[Page 54824]]

    (2) Ending on the date on which the Authority receives written 
notice that the horse has been retired.
    Covered horserace means any horserace involving covered horses that 
has a substantial relation to interstate commerce, including any 
Thoroughbred horserace that is the subject of interstate off-track or 
advance deposit wagers.
    Covered persons means all trainers, owners, breeders, jockeys, 
racetracks, veterinarians, persons (legal and natural) licensed by a 
State racing commission and the agents, assigns, and employees of such 
persons and other horse support personnel who are engaged in the care, 
training, or racing of covered horses.
    HISA Guidance means Horseracing Integrity and Safety Authority 
(Authority) guidance issued under 15 U.S.C. 3054(g)(1), which does not 
have the force of law.
    Horseracing anti-doping and medication control program means the 
anti-doping and medication program established under 15 U.S.C. 3055(a).
    Horseracing Integrity and Safety Authority or Authority means the 
private, independent, self-regulatory, nonprofit corporation recognized 
for purposes of developing and implementing a horseracing anti-doping 
and medication control program and a racetrack safety program for 
covered horses, covered persons, and covered horseraces.
    Interstate off-track wager has the meaning given such term in 
Section 3 of the Interstate Horseracing Act of 1978, 15 U.S.C. 3002.
    Jockey means a rider or driver of a covered horse in covered 
horseraces.
    Owner means a person who holds an ownership interest in one or more 
covered horses.
    Proposed rule means any rule proposed by the Authority pursuant to 
the Act.
    Proposed rule modification or modification means:
    (1) Any proposed modification to a rule or proposed rule change; or
    (2) Any interpretation or statement of policy or practice relating 
to an existing rule of the Authority that is not HISA Guidance and 
would have the force of law if approved as a final rule.
    Racetrack means an organization licensed by a State racing 
commission to conduct covered horseraces.
    Racetrack safety program means the program established under 15 
U.S.C. 3056(a).
    State racing commission means an entity designated by State law or 
regulation that has jurisdiction over the conduct of horseracing within 
the applicable State.
    Trainer means an individual engaged in the training of covered 
horses.
    Training facility means a location that is not a racetrack licensed 
by a State racing commission that operates primarily to house covered 
horses and conduct official timed workouts.
    Veterinarian means a licensed veterinarian who provides veterinary 
services to covered horses.
    Workout means a timed running of a horse over a predetermined 
distance not associated with a race or its first qualifying race, if 
such race is made subject to the Act by election under 15 U.S.C. 
3054(l) of the horse's breed governing organization or the applicable 
State racing commission.


Sec.  1.141  Required submissions.

    The Authority must submit to the Commission any proposed rule, or 
proposed rule modification, of the Authority relating to--
    (a) The bylaws of the Authority;
    (b) A list of permitted and prohibited medications, substances, and 
methods, including allowable limits of permitted medications, 
substances, and methods;
    (c) Laboratory standards for accreditation and protocols;
    (d) Standards for racing surface quality maintenance;
    (e) Racetrack safety standards and protocols;
    (f) A program for injury and fatality data analysis;
    (g) A program of research and education on safety, performance, and 
anti-doping and medication control;
    (h) A description of safety, performance, and anti-doping and 
medication control rule violations applicable to covered horses and 
covered persons;
    (i) A schedule of civil sanctions for violations;
    (j) A process or procedures for disciplinary hearings;
    (k) A formula or methodology for determining assessments described 
in 15 U.S.C. 3052(f); and
    (l) Any other proposed rule or modification the Act requires the 
Authority to submit to the Commission for approval.


Sec.  1.142  Submission of proposed rule or modification.

    (a) Contents of submission. In order for a submission to qualify as 
a proposed rule or proposed rule modification under 15 U.S.C. 3053(a), 
the Authority must submit to the Commission a complete draft of the 
Federal Register document for the proposed rule or proposed rule 
modification, which includes the text of the rule and a statement of 
the purpose of, and statutory basis for, the proposed rule or 
modification (``statement of basis and purpose''). The statement of 
basis and purpose must contain:
    (1) The reasons for adopting the proposed rule or modification.
    (2) Any problems the proposed rule or modification is intended to 
address and how the proposed rule or modification will resolve those 
problems.
    (3) A description of any reasonable alternatives to the proposed 
rule or modification that may accomplish the stated objective and an 
explanation of the reasons the Authority chose the proposed rule or 
modification over its alternatives.
    (4) How the proposed rule or modification will affect covered 
persons, covered horses, and covered horseraces.
    (5) Why the proposed rule or modification is consistent with the 
requirements of the Act and any rules and regulations applicable to the 
Authority, including the following:
    (i) Anti-doping and medication control program. When proposing a 
rule or modification to the horseracing anti-doping and medication 
control program, the Authority must explain how it considered the 
factors in 15 U.S.C. 3055, including:
    (A) Under 15 U.S.C. 3055(a)(2), the unique characteristics of a 
breed of horse made subject to the Act by election of a State racing 
commission or breed governing organization for such horse pursuant to 
15 U.S.C. 3054(l);
    (B) The factors listed in 15 U.S.C. 3055(b); and
    (C) The baseline anti-doping and medication control rules 
identified in 15 U.S.C. 3055(g)(2)(A). For a proposed rule, the 
Authority must state whether its proposed rule adopts the baseline 
standards identified in 15 U.S.C. 3055(g)(2)(A). If there is a conflict 
in any baseline standards identified in 15 U.S.C. 3055(g)(2)(A), the 
Authority must identify the conflict and state whether the standard it 
adopted is the most stringent standard. For a proposed rule 
modification, the Authority must explain whether the modification 
renders an anti-doping and medication control rule less stringent than 
the baseline anti-doping and medication control rules described in 15 
U.S.C. 3055(g)(2)(A), and state whether the anti-doping and medication 
control enforcement agency has approved of the change.
    (ii) Racetrack safety program. When proposing a rule or 
modification to any rule regarding the racetrack safety program 
required under 15 U.S.C. 3056(a)(1), the Authority must explain how the 
proposed rule or modification

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meets the requirements in 15 U.S.C. 3056(b). The Authority must explain 
how it considered and whether it adopted the safety standards in 15 
U.S.C. 3056(a)(2). If any horseracing safety standards in 15 U.S.C. 
3056(a)(2) were considered but not adopted or were modified, the 
Authority must explain why it decided not to adopt or why it decided to 
modify such standard.
    (iii) Other rules. To the extent the Act requires the Authority to 
consider any factors or standards not specifically referenced in this 
section, the Authority must explain whether and how it considered those 
factors when proposing a rule or modification. For instance, when 
proposing a civil sanctions rule or modification pursuant to 15 U.S.C. 
3057(d)(1), the Authority must explain how the rule or modification 
meets the requirements of 15 U.S.C. 3057(d)(2).
    (6) If written comments were solicited, the Authority's draft 
Federal Register document must include a summary of the substance of 
all comments received and the Authority's written response to all 
significant issues raised in such comments.
    (7) The date that the Authority proposes for the Federal Register 
to publish its proposed rule or modification.
    (b) Supporting documentation. The Authority's submission to the 
Commission required under paragraph (a) of this section must also 
include copies of the pertinent factual information underlying the 
Authority's development of the proposed rule or modification, including 
a copy of existing standards used as a reference for the development of 
the proposed rule or modification and scientific data, studies, or 
analysis underlying the development of the proposed rule or 
modification. Supporting documentation must be attached as exhibits, 
and each exhibit must clearly identify the proposed rule or 
modification it supports.
    (c) Redline document for proposed rule modification. For proposed 
rule modifications, the Authority must also provide, in a document 
separate from the Federal Register document, a redline version of the 
existing rule that will enable the Commission to immediately identify 
any proposed changes.
    (d) Timing of submission. To qualify as a proposed rule or proposed 
modification under 15 U.S.C. 3053(a), the Authority's submission must 
provide the information in paragraphs (a), (b), and (c) of this section 
at least 90 days in advance of the proposed date for the Federal 
Register to publish a proposed rule or modification for public comment 
pursuant to 15 U.S.C. 3053(b)(1). The Secretary may waive the 90-day 
requirement in this section if the Authority demonstrates such waiver 
is necessary to meet statutory deadlines.
    (e) Conclusory statements and failure to provide requisite 
analysis. Information required to be submitted under this section must 
be sufficiently detailed and contain sufficient analysis to support a 
Commission finding that a proposed rule or modification satisfies the 
statutory requirements. For instance, a mere assertion or conclusory 
statement that a proposed rule or modification is consistent with the 
requirements of the Act is insufficient. Failure to describe and 
justify the proposed rule or modification in the manner described in 
this section or failure to submit the information required by this 
section may result in the Commission's having insufficient information 
to make an affirmative finding that the proposed rule or modification 
is consistent with the Act and the applicable rules approved by the 
Commission.
    (f) Public comments. The Authority is encouraged to solicit public 
comments on its proposed rule or modification in advance of making a 
submission to the Commission pursuant to this section. If the Authority 
solicits public comments, it must attach a copy of the comments as an 
exhibit to its submission. By soliciting public comments and addressing 
significant issues raised therein, the Authority facilitates the 
Commission's review and approval of the Authority's proposed rule or 
modification.


Sec.  1.143  Submissions to the Secretary.

    (a) Electronic submission. All rule submissions under Sec.  1.142 
and 15 U.S.C. 3053(a), rate increases that must be reported to the 
Commission under 15 U.S.C. 3052(f)(1)(C)(iv), or HISA Guidance that 
must be submitted to the Commission under 15 U.S.C. 3054(g)(2) must be 
emailed to the Secretary of the Commission at 
[email protected]. The subject line of the email must state: 
``HISA Rule Submission,'' ``HISA Rate Increase Submission,'' or ``HISA 
Guidance Submission,'' as applicable.
    (b) Format for submission of proposed rules or modifications--(1) 
Electronic format. Except for supporting documentation submitted 
pursuant to Sec.  1.142(b) and copies of comments submitted pursuant to 
Sec.  1.142(f), all documents submitted to the Secretary must be in a 
word processing format.
    (2) Table of contents. Submissions with more than one attachment 
must contain a table of contents in the body of the email with a brief 
description of each item.
    (3) Contact information. The Authority must provide the name, 
telephone number, and email address of a person on the staff of the 
Authority responsible for responding to questions and comments on the 
submission in the body of the email.
    (4) Draft Federal Register documents. Draft Federal Register 
documents must follow the relevant format and editorial requirements 
for regulatory documents under 1 CFR parts 18, 21, and 22 (see Office 
of Federal Register's Document Drafting Handbook). The Document 
Drafting Handbook specifies that draft Federal Register documents (see 
1 CFR 15.10) must:
    (i) Contain proper preamble captions and content;
    (ii) State the purpose of, and basis for, the proposed rule or 
modification;
    (iii) Set forth regulatory text, headings, and authority citations;
    (iv) Use correct numbering, structure, and amendatory language; and
    (v) Conform to the style and formatting established by the Office 
of the Federal Register and Government Publishing Office. (See, 
specifically, section 2.17 (proposed rules) of the Office of the 
Federal Register's Document Drafting Handbook.)
    (c) Confidential information. If a document filed with the 
Secretary contains confidential information, the Secretary must be so 
informed, and a request for confidential treatment must be submitted in 
accordance with 16 CFR 4.9.
    (d) Date of filing. If the conditions of this section are otherwise 
satisfied, all filings submitted electronically on or before 5:30 p.m. 
Eastern Time, on a business day, will be deemed filed on that business 
day, and all filings submitted after 5:30 p.m. Eastern Time, will be 
deemed filed on the next business day.
    (e) Authority to reject documents for filing. The Secretary of the 
Commission may reject a document for filing that fails to comply with 
the Commission's rules for filing in this section or Sec.  1.142.
    (f) Federal Register publication. If the conditions in this section 
and Sec.  1.142 have been satisfied, the Commission will publish the 
proposed rules or modifications in the Federal Register and request 
public comment on those proposed rules or modifications.


Sec.  1.144  Approval or disapproval of proposed rules and proposed 
rule modifications.

    (a) Commission decision. The Commission will approve or disapprove

[[Page 54826]]

a proposed rule or modification by issuing an order within 60 days of 
the date the proposed rule or modification was published in the Federal 
Register for public comment.
    (b) Standard of review. The Commission will approve a proposed rule 
or modification if the Commission finds that the proposed rule or 
modification is consistent with the Act and the applicable rules 
approved by the Commission. If the Commission disapproves a rule or 
modification, it will make recommendations to the Authority to modify 
the proposed rule or modification within 30 days of such disapproval.
    (c) Effect. A proposed rule or modification will not take effect 
unless it has been approved by the Commission.

    By direction of the Commission.
April J. Tabor,
Secretary.
[FR Doc. 2021-21306 Filed 10-4-21; 8:45 am]
BILLING CODE 6750-01-P