Horseracing Integrity and Safety Authority (HISA) Proposed 2024 Budget, 77582-77587 [2023-24939]
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2023.
James P. Sheesley,
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FEDERAL TRADE COMMISSION
[File No. P222100]
[FR Doc. 2023–24862 Filed 11–9–23; 8:45 am]
Horseracing Integrity and Safety
Authority (HISA) Proposed 2024
Budget
BILLING CODE 6714–01–P
AGENCY:
Federal Trade Commission.
Notice of publication of
Horseracing Integrity and Safety
Authority 2024 proposed budget;
request for public comment.
ACTION:
The Federal Trade
Commission (‘‘FTC’’ or ‘‘Commission’’)
publishes the 2024 proposed budget of
the Horseracing Integrity and Safety
SUMMARY:
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State
IA
Date closed
11/03/2023
Authority and seeks public comment on
whether the Commission should
approve, disapprove, or modify the
proposed budget.
DATES: Comments must be filed on or
before November 27, 2023.
ADDRESSES: Interested parties may file a
comment online or on paper by
following the instructions in the
Request for Comment part of the
SUPPLEMENTARY INFORMATION section.
Write ‘‘HISA 2024 Budget, Matter No.
P222100’’ on your comment and file it
online at https://www.regulations.gov by
following the instructions on the webbased form. If you prefer to file your
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comment on paper, mail your comment
to the following address: Federal Trade
Commission, Office of the Secretary,
600 Pennsylvania Avenue NW, Suite
CC–5610 (Annex H), Washington, DC
20580.
FOR FURTHER INFORMATION CONTACT: John
H. Seesel (202–326–2702), Associate
General Counsel, Office of the General
Counsel, Federal Trade Commission,
600 Pennsylvania Avenue NW,
Washington, DC 20580.
SUPPLEMENTARY INFORMATION: The
Horseracing Integrity and Safety Act,1
enacted on December 27, 2020,2 and
amended on December 29, 2022,3
directs the Federal Trade Commission to
oversee the activities of a private, selfregulatory organization called the
Horseracing Integrity and Safety
Authority (‘‘HISA’’ or the ‘‘Authority’’).
In March 2023, the Commission issued
rules setting forth the procedure
whereby the Commission approves,
disapproves, or modifies the Authority’s
proposed annual budget.4 Under these
rules, the Authority must first publish a
proposed budget on its own website and
invite public comments. See 16 CFR
1.150(b). Thereafter, the Authority must
forward the budget to the Commission,
along with any public comments
received and an assessment of those
comments. Id. The Authority’s
submission must include (a) a statement
of the vote by the Authority’s Board of
Directors approving the proposed
budget; (b) information about revenues,
including how fees are calculated and
apportioned; (c) information about
expenditures, broken down by program
area, e.g., the racetrack safety program,
the anti-doping and medication control
program, etc.; (d) sufficient information
about individual line items for the
Authority’s Board of Directors to
exercise their fiduciary duty of care; and
(e) information comparing actual
revenues and expenses against the
approved budget and explaining
variances of greater than 10 percent. 16
CFR 1.150(c).
After the Authority submits its
proposed budget and supporting
materials to the Commission, the
Commission must determine whether
‘‘the proposed budget contains
sufficient information for the members
of the Board of Directors of the
Authority to exercise their fiduciary
duty of care,’’ 16 CFR 1.150(d), and
1 Codified
2 Public
at 15 U.S.C. 3051 through 3060.
Law 116–260, 134 Stat. 1182, 3252 (Dec.
27, 2020).
3 Public Law 117–328, 136 Stat. 4459, 5231 (Dec.
29, 2022).
4 88 FR 18034 (Mar. 23, 2023); see 16 CFR 1.150
1through 1.152.
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whether the submission otherwise
comports with the submission
requirements of the Commission’s rules.
Id.; see 16 CFR 1.143. Once the
Commission makes that determination,
it publishes the Authority’s proposed
budget in the Federal Register and
invites public comment for a period of
14 days. Id. After taking into
consideration the comments submitted,
the Commission either approves or
disapproves the budget. 16 CFR
1.151(a).5 The Commission will approve
the proposed budget if ‘‘the Commission
determines that, on balance, the
proposed budget serves the goals of the
Horseracing Integrity and Safety Act in
a prudent and cost-effective manner,
utilizing commercially reasonable terms
with all outside vendors, and that its
anticipated revenues are sufficient to
meet its anticipated expenditures.’’ 16
CFR 1.151(c). The Commission may also
modify the amount of any line item. 16
CFR 1.151(d).
On September 1, 2023, the Authority
forwarded to the Commission a Notice
of Filing of HISA Budget, together with
appendices furnishing detailed
information pertinent to its 2024 budget
proposal (as required by 16 CFR
1.150(c)). The Notice of Filing of HISA
Budget is reproduced below. The
appendices to which it refers have been
collected and reproduced as a
supporting document on the docket for
this publication at https://
www.regulations.gov.
Based upon these submissions and
additional information the Authority
has provided to the Commission, the
Commission concludes that the
Authority’s proposed 2024 budget
‘‘contains sufficient information for the
members of the Board of Directors of the
Authority to exercise their fiduciary
duty of care.’’ 16 CFR 1.150(d). The
Authority’s submission also complies
with the filing procedures set forth in 16
CFR 1.143. The Commission therefore
issues this document and invites
comments from the public on the
Authority’s 2024 budget. Comments
should address the decisional criteria
set forth in 16 CFR 1.151(c) and whether
any line items should be modified. See
16 CFR 1.151(e).
You can file a comment online or on
paper. For the Commission to consider
your comment, we must receive it on or
before November 27, 2023. Write ‘‘HISA
2024 Budget, Matter No. P222100’’ on
5 16 CFR 1.151(a) provides that ‘‘[t]he
Commission will vote on the Authority’s proposed
budget no later than November 1.’’ Pursuant to 16
CFR 4.3(b)(2), the Commission hereby extends the
voting deadline to December 1, 2023, to allow the
Commission sufficient time to consider any
comments filed in response to this Notice.
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your comment. Your comment—
including your name and your state—
will be placed on the public record of
this proceeding, including the https://
www.regulations.gov website.
Postal mail addressed to the
Commission is subject to delay due to
heightened security screening. As a
result, we strongly encourage you to
submit your comments online. To make
sure the Commission considers your
online comment, you must file it at
https://www.regulations.gov, by
following the instructions on the webbased form.
If you file your comment on paper,
write ‘‘HISA 2024 Budget, Matter No.
P222100’’ on your comment and on the
envelope, and mail your comment to the
following address: Federal Trade
Commission, Office of the Secretary,
600 Pennsylvania Avenue NW, Suite
CC–5610 (Annex H), Washington, DC
20580. If possible, please submit your
paper comment to the Commission by
overnight service.
Because your comment will be placed
on the publicly accessible website at
https://www.regulations.gov, you are
solely responsible for making sure your
comment does not include any sensitive
or confidential information. In
particular, your comment should not
include any sensitive personal
information, such as your or anyone
else’s Social Security number; date of
birth; driver’s license number or other
state identification number, or foreign
country equivalent; passport number;
financial account number; or credit or
debit card number. You are also solely
responsible for making sure your
comment does not include any sensitive
health information, such as medical
records or other individually
identifiable health information. In
addition, your comment should not
include any ‘‘any trade secret or any
commercial or financial information
. . . which is privileged or
confidential.’’ 15 U.S.C. 46(f); see 16
CFR 4.10(a)(2). Your comment should
not include competitively sensitive
information such as costs, sales
statistics, inventories, formulas,
patterns, devices, manufacturing
processes, or customer names.
Comments containing material for
which confidential treatment is
requested must be filed in paper form,
must be clearly labeled ‘‘Confidential,’’
and must comply with 16 CFR 4.9(c). In
particular, the written request for
confidential treatment that accompanies
the comment must include the factual
and legal basis for the request and must
identify the specific portions of the
comment to be withheld from the public
record. See 16 CFR 4.9(c). Your
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comment will be kept confidential only
if the General Counsel grants your
request in accordance with the law and
the public interest. Once your comment
has been posted publicly at https://
www.regulations.gov, as legally required
by 16 CFR 4.9(b), we cannot redact or
remove your comment, unless you
submit a confidentiality request that
meets the requirements for such
treatment under 16 CFR 4.9(c), and the
General Counsel grants that request.
Visit the FTC website to read this
document. The FTC Act and other laws
that the Commission administers permit
the collection of public comments to
consider and use in this proceeding as
appropriate. The Commission will
consider all timely and responsive
public comments it receives on or before
November 27, 2023. For information on
the Commission’s privacy policy,
including routine uses permitted by the
Privacy Act, see https://www.ftc.gov/
site-information/privacy-policy.
The text that follows is the Notice of
Filing of HISA Budget that the
Authority submitted to the Commission.
The appendices to which it refers have
been collected and reproduced as a
supporting document on the docket for
this publication at https://
www.regulations.gov.
khammond on DSKJM1Z7X2PROD with NOTICES
Notice of Filing of HISA Budget
Pursuant to the Horseracing Integrity
and Safety Act of 2020 6 (the ‘‘Act’’) and
the Federal Trade Commission’s (the
‘‘Commission’’) Procedures for
Oversight of the Horseracing Integrity
and Safety Authority’s Annual Budget,7
notice is hereby given that on
September 1, 2023, the Horseracing
Integrity and Safety Authority (‘‘HISA’’
or the ‘‘Authority’’) filed with the
Commission the Authority’s proposed
2024 budget. This Notice of Filing of
HISA Budget (the ‘‘Notice’’) provides
the contents of the submission as set
forth in 16 CFR part 1 subpart U.
I. Information Concerning Rule
1.150(b). The Authority’s proposed 2024
budget was posted on the HISA website
(hisaus.org) on August 17, 2023. The
Authority did not receive any comments
regarding the budget.
II. Information Concerning Rule
1.150(b)(1). The Authority’s 2024 budget
was approved by the Authority’s Board
of Directors by a vote of 8 to 0 and
therefore satisfies the requirements of 15
U.S.C. 3052(f)(1)(C)(iii).
III. Information Concerning Rule
1.150(b)(2). Using the Assessment
Methodology Rule approved by the
6 15
7 16
U.S.C. 3051 through 3060.
CFR part 1 subpart U.
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Commission, the Authority calculated
the following:
• 2024 Assessments by State
(attached as Appendix 6).
• 2024 Assessments by Track
(attached as Appendix 7).
Appendix 6 and Appendix 7 display
the estimated amount required from
each state racing commission as
calculated under the Assessment
Methodology Rule.
The 2024 HISA Budget includes the
following revenue line items:
• Racetrack Safety Fine Income—this
consists of fines levied for violations of
Racetrack Safety rules.
• ADMC Fine Income—this consists
of fines paid for violations of the equine
medication rules.
• Lab Test Income—this consists of
the money paid to HISA to cover the
cost of B Sample testing, claimed horse
testing, and clearance testing.
• Other Revenue—this consists of
payments made by certain racetracks to
reimburse HISA for paying for the cost
of Racetrack Safety rules compliance
(there is an offsetting expense).
• In-Kind Contributions—this
consists of the value of in-kind
contributions received (there is an
offsetting expense).
Please note that no loans are
contemplated to be procured by HISA in
2024.
IV. Information Concerning Rule
1.150(b)(3) & (b)(4). The Act recognizes
that the establishment of a national set
of uniform standards for racetrack safety
and medication control will enhance the
safety and integrity of horseracing. The
2024 budget allows the Authority to
implement the horseracing anti-doping
and medication control program and the
racetrack safety program for Covered
Horses, Covered Persons and Covered
Horseraces. Pursuant to the Authority’s
Conflict of Interest Policy, ‘‘HISA
Representatives involved in
procurement have a special
responsibility to adhere to principles of
fair competition in the purchase of
products and services by selecting
vendors based exclusively on standard
commercial considerations, such as
quality, cost, availability, service and
reputation, and not on the receipt of
special favors.’’ In addition, the Conflict
of Interest Policy requires:
• Transactions to be supported by
appropriate documentation;
• No entry be made in our books and
records that intentionally hides or
disguises the nature of any transaction
or of any of our liabilities, or
misclassifies any transactions as to
accounts or accounting periods;
• HISA Representatives comply with
our system of internal controls; and
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• No cash or other assets be
maintained for any purpose in any
unrecorded or ‘‘off-the-books’’ fund.
In addition, the Conflict of Interest
Policy requires that:
• No HISA Representative may take
or authorize any action that would
cause our financial records or financial
disclosures to fail to comply with
generally accepted accounting
principles or other applicable laws,
rules, and regulations; and
• All HISA Representatives must
cooperate fully with our finance staff, as
well as our independent public
accountants and legal counsel, and
respond to their questions with candor
and provide them with complete and
accurate information to help ensure that
our records are accurate and complete.
Any HISA Representative who
becomes aware of any departure from
these standards has a responsibility to
report his or her knowledge promptly to
the CEO or Chair of the Board.
The 2024 HISA Summary budget
(Appendix 1) is a compilation of the
following departmental budgets:
Racetrack Safety (Appendix 2); AntiDoping and Medication Control
(‘‘ADMC’’) (Appendix 3); HIWU
(Appendix 3a) Technology (Appendix
4); and Administration (Appendix 5). A
summary of these departmental budgets
is set forth below:
1. The 2024 Racetrack Safety budget
funds the implementation of the
Racetrack Safety Program as set forth in
Rule Series 2000 and as approved by
order of the Commission dated March 3,
2022. The budget consists of the
following items:
a. Salaries/Payroll Taxes/Employee
Benefits. The salaries provide for
staffing to support and monitor the
Racetrack Safety program, including
those persons necessary to oversee the
following components of the program:
i. Administration
ii. Data Analysis
iii. Track Accreditation Services
iv. Research
v. Stewards’ & State Racing Commission
Liaison
vi. Jockey Health & Welfare
vii. Education
Salary levels for each position are
based on market rates, while Employee
Benefits consist primarily of a HISA
contribution to cover a portion of
employee health insurance and a 401(k)
match that is consistent with market
practice. The salaries budget provides
for nine racetrack safety employees. As
of August 31, 2023, the Racetrack Safety
Program has seven employees. For all
employees of the Authority, the CEO
and the CFO, both of whom are
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individuals who do not have a conflict
of interest with regard to the hiring of
other open positions, review and
document compensation based on
industry norms for similar positions
prior to setting and to offering other
open positions. Where needed, the CFO
and the CEO rely upon an outside
search agency to help determine
compensation for other open positions.
The Authority plans to do a
compensation comparison in 2023 using
comparability data and provide ongoing
oversight to all staffing processes and
payroll.
b. Meetings. This includes the travel,
meals, and materials to support the
following annual meetings:
i. Equine Safety Directors
ii. Track Superintendents
iii. Racetrack Safety Committee
These meetings are necessary to
promote safety for both horses and
riders.
c. Travel. This category covers the
business travel and meal expenses for
all of the employees previously listed in
Salaries (section a) of this department
(excluding the travel and meal expenses
for the Meetings described in section b.
and the Track Accreditation Services
travel set forth in section f.). Travel to
Covered Racetracks by Authority
employees is often necessary to ensure
that Covered Horseraces are run as
safely as possible.
d. Supplies. This primarily consists of
materials to be used in various
Continuing Education programs
provided and overseen by HISA. These
programs ensure that trainers, jockeys,
veterinarians, and stewards are
educated in methods and procedures
that promote the health and safety of
horses and riders.
e. Professional Services. Several
independent contractors and external
service provider companies will partner
with HISA on a part-time basis to
provide and/or augment services in the
following areas:
i. Data Analysis
ii. Research
iii. Statistical Analysis
iv. Jockey Concussion Tracking
v. National Medical Director
Pay rates are based on market rates for
similar positions. All of these
independent contractor relationships
will increase the knowledge base and/or
education level of participants in
Covered Horseraces.
f. Track Accreditation Services. The
Racetrack Safety rules require that
tracks be accredited, and the rules
mandate site visits to determine the
extent of compliance with the rules.
This category includes the costs of
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compensating teams of independent
contractors to perform these site visits,
and the costs of covering the travel and
meal expenses for this team. It is
expected that the accreditation site
visits will be conducted by teams of
three to four individuals. The costs
included in this category were originally
estimated based on the historical costs
of site inspections performed by the
National Thoroughbred Racing
Association’s Safety & Integrity
Alliance, and have been adjusted based
on the actual cost of accreditation site
visits in 2023. On-site track visits will
ensure that track facilities meet the
safety requirements set forth in the
Racetrack Safety rules.
g. Track Surface Testing. This
category includes the cost of pre-meet
track surface testing of tracks that run
Covered Horseraces. Testing is
performed to ensure that track surfaces
are safe for horses/jockeys to run on.
This testing is performed by the Racing
Surfaces Testing Laboratory.
2. The 2024 Anti-Doping and
Medication Control budget supports the
implementation of the ADMC Protocol.
The budget consists of the following
items:
a. Travel. This line item covers the
business travel and meal expenses that
are expected to be incurred by HISA
personnel to support and achieve the
goals of the ADMC Program.
b. Supplies. This line item sets forth
the cost of materials utilized by the
Authority to support and achieve the
goals of the ADMC Program, including
services such as continuing education.
c. Professional Services. Several
independent contractors will partner
with HISA on a part-time basis to
provide and/or augment services in the
following areas:
i. Arbitration—this covers the fees to
be paid to arbitrators who preside over
appeals of positive anti-doping tests.
ii. Independent Adjudication Panel
(IAP)—this covers the fees paid to
members of the IAP, who hear appeals
of positive tests for controlled
medication.
iii. Furosemide Study—this covers the
fees to be paid in 2023 for the
furosemide study that is required by the
Act.
d. Horseracing Integrity and Welfare
Unit (HIWU). The Act requires that
HISA contract with an independent
enforcement agency to oversee the
components of the ADMC Program.
HIWU, a division of Drug Free Sport,
LLC (‘‘DFS’’), has been retained by the
Authority as the independent
enforcement agency. The HIWU line
items in the ADMC budget consist of the
following:
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i. Salaries/Payroll Taxes/Employee
Benefits. All HIWU employees are
employed by DFS. The salaries account
for a staff (expected to total 44 full-time
individuals) that will carry out all of the
responsibilities of the enforcement
agency, including those persons
necessary to oversee and complete the
following components of the program:
1. Testing Operations
2. Testing Strategy
3. Compliance & Policy
4. Collection Personnel Recruitment,
Training, & Certification
5. Support Line Management
6. Science
7. Laboratory Accreditation
8. Equine Medical Resources
9. Intelligence and Strategy
10. Investigative Operations
11. Education
12. Communications & Outreach
13. Legal
14. Litigation
15. Results Management
16. Information Technology
17. Human Resources
18. Finance
HIWU shares staff with DFS in the
areas of Information Technology,
Finance and Human Resources. This
arrangement produces cost savings,
obviating the need for HIWU to retain
full-time employees to provide these
services.
ii. Rent. HIWU has procured 3,000 sq.
ft. of office space for its employees.
HIWU is paying $30/sq.ft., which is
consistent with market rates in the
Kansas City area. The cost of basic office
equipment is also included in this
category.
iii. Office Expense. This consists of
common office expenses such as
utilities and maintenance costs and is
based on historical costs for similar
businesses.
iv. Telecommunications. This consists
of the cost of office phones, mobile
phone service at $65/month/employee
(a commercially reasonable rate), and
portable hot-spot wi-fi services to be
used in test barns.
v. Travel. This is the travel expense
necessary for full-time employees to
perform functions such as meetings
with State Racing Commissions and
track associations, training and
continuing education sessions with
sample collection personnel, arbitration
hearings, laboratory visits, meetings
with HISA personnel, and participation
in industry meetings and conventions.
Travel expenses include airfare, hotel
rooms, rental cars, fuel costs, mileage
for personal vehicles used for business
purposes, parking, and meals. The
amounts for each expense component
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were based on estimated market average
costs.
vi. Supplies. This consists of drug
testing supplies needed for sample
collections and sample collection
personnel training.
vii. Professional Services. This
consists largely of consulting fees paid
to experts in the areas of:
1. Results Management
2. Investigations and State Racing
Commission Relations
3. Laboratory Accreditation
The guidance provided by these
subject matter experts will result in a
safer sport run on a more level playing
field.
viii. Technology. This consists of the
cost of all software, hardware, licenses
and continued technological
development needed to perform HIWU’s
work.
ix. Insurance. The expense consists of
the cost of all of HIWU’s insurance
policies, including liability insurance
with an Umbrella policy, cyber-risk
insurance, property insurance, and
workers’ compensation insurance.
x. Resources and Education. This
includes Training and Continuing
Education, registration fees for industry
conferences, accounting fees for state
tax filings, and dues and subscriptions
to industry publications. All of these are
necessary for HIWU to properly conduct
its business.
xi. Taxes—Other. Estimated taxes
based on the historical experience of
HIWU’s sister companies. These taxes
are minimal in amount and are
commercially reasonable.
xii. ADMC Collection Costs. This
includes wages paid to sample
collection personnel in all states that
conduct Covered Horseraces. The wage
amounts were based on rates paid to
sample collection personnel in each
state prior to HIWU assuming these
sample collection functions.
Additionally, to cover travel expenses
specifically related to sample collection,
this includes airfare, hotel rooms, rental
cars, fuel costs, mileage for personal
vehicles used for business purposes,
parking, and meals. The amounts for
each expense component were based on
estimated market average costs.
xiii. Management Fees. This is the
profit amount to HIWU for
administering the program. It is a
negotiated amount of 8% of the total
expenses incurred for services they
provide directly and 4% for everything
else.
e. Lab Testing. Once the samples to be
tested have been collected by HIWU
personnel, they are shipped to one of six
accredited laboratories located in the
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17:12 Nov 09, 2023
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United States. All of the laboratories
have many years of experience in the
testing of blood, urine, and hair samples
taken from thoroughbred racehorses.
HIWU has conducted extensive
negotiations with each of these
laboratories in order to ensure that
competent testing is performed at the
lowest price possible. One way HIWU
has successfully reduced costs is by
utilizing only six laboratories to perform
testing, instead of the nine laboratories
previously used by various state racing
commissions across the country. This
allows the six laboratories to spread
their fixed costs (salaried employees,
testing equipment, etc.) over a larger
number of samples, resulting in a lower
charge per test.
It is important to note that the ADMC
Collection Costs and Lab Testing line
items represent 55.2% of the total
budget of the Authority.
3. The 2024 Technology budget
supports the building of all IT systems
needed to properly and efficiently
manage the Racetrack Safety and ADMC
programs. The budget consists of the
following items:
a. Salaries/Payroll Taxes/Employee
Benefits. This contemplates nine HISA
full-time employees in areas including
programming, field support, internal
support, external support, project
administration, and third-party
developer coordination. Salary levels for
each position are based on market rates,
while Employee Benefits consist
primarily of a HISA contribution to
cover a portion of employee health
insurance and a 401(k) match that is
consistent with market practice. As of
August 31, 2023, the Technology
department has five employees.
b. Travel. This includes the costs of
travel by IT employees to racetracks to
meet with customers/users, to
Lexington, Kentucky for HISA meetings,
and to training seminars and technology
summit meetings. Participation by IT
employees in these meetings and
seminars will result in a more efficient
program that better meets the needs of
the constituents.
c. Supplies. This includes the
purchase of laptops for all HISA
employees, the provision of
workstations for those employees
located in the Lexington office, and the
hardware/software/3rd-party services
needed for image processing. These
items are necessary for HISA to
efficiently perform its duties under the
Act.
d. Technology. This item includes the
costs of cloud computing and other
specialized applications that together
form the foundation of HISA’s
technology system. For example (and
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most significantly), this category
includes the cost of Amazon Web
Services, as well as relationships with
other vendors relating to the HISA
website and technology systems. In
order to be as cost-effective as possible,
HISA has chosen not to invest in
centralized computing assets. This
keeps costs low and increases flexibility
as HISA is engaged in expanding its
staff and infrastructure.
e. Professional Services. This item
budgets for outsourced technology
delivery provided by third-party system
integrators and software factories. Given
the need for cost-effective, round-theclock services, the necessary software
and technology systems were procured
internationally from development
resources in the US, Europe, and Asia;
this allowed for the implementation of
a 24-hour code and test development
cycle. This is the most cost-effective
method of building and maintaining
technology systems/portals to facilitate
program reporting to and monitoring by
HISA.
4. The 2024 Administration budget
consists of the general and
administrative staff and expenditures
that are needed to conduct HISA’s
business. This budget consists of:
a. Salaries/Payroll Taxes/Employee
Benefits. This includes executive-level
personnel (the CEO and CFO), plus
employees in Legal, Communications,
Operations/Compliance, and
Administrative Services. Salary levels
for each position are based on market
rates, while Employee Benefits consist
primarily of a HISA contribution to
cover a portion of employee health
insurance and a 401(k) match that is
consistent with market practice. As of
August 31, 2023, six employees make
up the Administration Department. The
Administration Department has not
filled all of its budgeted positions.
b. Board/Committee Travel. This
consists of travel, hotel, and meal
expenses for the one annual board
meeting that is held with in-person
attendance by the board members.
c. Rent. HISA currently contemplates
that, in order to be as cost-efficient as
possible, it will not rent a stand-alone
office and will instead continue its
office-sharing arrangement with the
National Thoroughbred Racing
Association.
d. Phones. This is the cost of an office
phone system in HISA’s corporate
office, necessary for HISA to conduct its
business.
e. Meetings. This is the cost of
miscellaneous meetings of HISA’s
corporate staff as are necessary for HISA
to conduct its business.
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Federal Register / Vol. 88, No. 217 / Monday, November 13, 2023 / Notices
f. Travel. This includes airfare, car
rental, mileage, and meals for HISA’s
corporate staff in the course of traveling
to Covered Racetracks, industry
meetings, HISA meetings (strategic
planning summits, board meetings, etc.),
and meetings with industry
stakeholders. Travel to these events
allows HISA’s corporate staff to conduct
its business more efficiently and to
perform its duties under the Act.
g. Interest. This includes the interest
expected to be charged on the loans that
HISA procured to fund its initial
operations.
h. Bank Fees. This includes the cost
of bank fees and credit card fees. These
fees are minimal and are necessary to
efficiently and effectively conduct
business.
i. Supplies. This includes the cost of
all office supplies, including printer/
copier paper, printer/copier ink and
toner, postage, shipping, and other
miscellaneous office supplies.
j. Accounting Services. This consists
of the cost of a contract bookkeeping
service that will book accounting
entries, produce financial statements,
manage and process Accounts
Receivable, manage and process
Accounts Payable, and draft/file HISA’s
annual IRS Form 990. Contracting this
work out to a company with expertise
in these areas is much more costeffective than if HISA were to hire staff
to perform these functions in-house.
Additionally, this includes the
estimated cost of an annual independent
audit of HISA.
k. Public Relations Services. This is
the cost of a contract public relations
service to manage HISA’s website, issue
press releases, assist with the
production and distribution of
information to industry stakeholders,
and provide continuing education
information for industry stakeholders.
The public relations firm that HISA is
working with has many years of
expertise in P/R for thoroughbred racing
enterprises. The firm can perform the
aforementioned tasks more efficiently
and effectively than if HISA were to hire
staff to perform these tasks in-house.
l. Legal. This includes the cost of
outside legal counsel for the creation,
management, and updating of Racetrack
Safety and ADMC rules as well as the
cost of outside counsel that is working
on the various lawsuits in which HISA
is a party. Doing all of these tasks
requires a decentralized group of
lawyers with varied skill sets. At
present, it is much more efficient and
effective to utilize outside counsel than
for HISA to hire a large in-house legal
team to handle these issues.
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17:12 Nov 09, 2023
Jkt 262001
m. Insurance. This includes the
following insurance policies for HISA:
i. Directors & Officers insurance.
ii. Workers’ Compensation insurance.
All these policies were competitively
shopped by a broker to get the lowest
rate possible.
n. Payroll Services. This includes all
costs of HISA’s relationship with
Resource Management, Inc. (RMI), a
Professional Employer Organization
(PEO). RMI provides Human Resources
administration (handbook and policy
management resources, new employee
onboarding, labor law assistance, etc.),
benefits management, compliance
services (workers’ compensation claims
management and annual reporting,
unemployment claims management,
etc.) and payroll administration (payroll
processing, W2 management, vacation
tracking, etc.). The relationship with
RMI allows these functions to be
performed in a more cost-effective
manner than if HISA hired employees to
perform those functions.
o. Professional Services. This account
consists of:
i. Consulting fees to assist HISA with
board and executive functions.
ii. $300,000 contingency fund set
aside for unexpected expenses.
These items will ensure that HISA has
high quality employees who are welltrained to properly serve its
constituents.
Please note that the 2024 HISA budget
contemplates the repayment of $1.25M
of loans; it does not assume that any
funding shortfall will be incurred.
V. Information Concerning Rule
1.150(b)(5). Attached as Appendix 8 is
a comparison of the approved HISA
2023 Budget to actual revenues and
expenditures. A variance has been
calculated for each line item, and a
narrative explanation has been provided
for all variances >10% and at least
$100,000.
Conclusion
The budget furthers the purpose of the
Act in that it allocates the funding
necessary for the successful
implementation by HISA of the
requirements of the Act. The budget has
been carefully analyzed and is narrowly
tailored to the various regulatory
activities of HISA as contemplated by
the Act.
By direction of the Commission.
April J. Tabor,
Secretary.
[FR Doc. 2023–24939 Filed 11–9–23; 8:45 am]
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GENERAL SERVICES
ADMINISTRATION
[Notice–PBS–2023–04; Docket No. 2023–
0002; Sequence No. 23]
Notice of Intent To Prepare an
Environmental Impact Statement and
Notice of Public Scoping Meeting and
Comment Period
Office of Public Buildings
Service (PBS), General Services
Administration (GSA)
ACTION: Notice of intent; notice of public
scoping meeting and comment period.
AGENCY:
GSA intends to prepare an
Environmental Impact Statement (EIS)
which will be prepared in order to
analyze potential environmental
impacts from the proposed
modernization of the Bridge of the
Americas Land Port of Entry (LPOE) in
El Paso, Texas.
DATES: Public Scoping—The public
scoping period will begin November 13,
2023.
Meeting Date—An initial public
scoping meeting will be held on
Wednesday December 13, 2023, from 6
p.m. to 8 p.m. central standard time
(CST), where GSA will meet with
governmental and public stakeholders
to explain the project and obtain input
on the scoping of the project. The
meeting will be an informal open house,
where visitors may come, receive
information, and provide written
comments. There will be a brief opening
statement and review of the project.
Interested parties are encouraged to
provide written comments regarding the
scope of the proposed EIS. Written
comments pertaining to this initial
public scoping meeting must be
received by Tuesday, January 16, 2024,
in order to be considered during
preparation of the Draft EIS.
ADDRESSES: The initial public scoping
meeting will be held at the Hilos De
Plata Senior Center, 4451 Delta Dr., El
Paso, Texas 79905.
Written comments may be sent to
GSA BOTA.NEPAcomments@gsa.gov, or
the address in the FOR FURTHER
INFORMATION CONTACT section.
FOR FURTHER INFORMATION CONTACT:
Karla R. Carmichael, NEPA Program
Manager, Environmental, Fire and
Safety & Health Branch, GSA/PBS,
Facilities Management and Services
Programs Division, Greater Southwest
Region 7, 819 Taylor St., Fort Worth, TX
76102 or via telephone at 817–822–
1372.
SUMMARY:
SUPPLEMENTARY INFORMATION:
BILLING CODE 6750–01–P
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77587
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Agencies
[Federal Register Volume 88, Number 217 (Monday, November 13, 2023)]
[Notices]
[Pages 77582-77587]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-24939]
=======================================================================
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FEDERAL TRADE COMMISSION
[File No. P222100]
Horseracing Integrity and Safety Authority (HISA) Proposed 2024
Budget
AGENCY: Federal Trade Commission.
ACTION: Notice of publication of Horseracing Integrity and Safety
Authority 2024 proposed budget; request for public comment.
-----------------------------------------------------------------------
SUMMARY: The Federal Trade Commission (``FTC'' or ``Commission'')
publishes the 2024 proposed budget of the Horseracing Integrity and
Safety Authority and seeks public comment on whether the Commission
should approve, disapprove, or modify the proposed budget.
DATES: Comments must be filed on or before November 27, 2023.
ADDRESSES: Interested parties may file a comment online or on paper by
following the instructions in the Request for Comment part of the
SUPPLEMENTARY INFORMATION section. Write ``HISA 2024 Budget, Matter No.
P222100'' on your comment and file it online at https://www.regulations.gov by following the instructions on the web-based
form. If you prefer to file your
[[Page 77583]]
comment on paper, mail your comment to the following address: Federal
Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW,
Suite CC-5610 (Annex H), Washington, DC 20580.
FOR FURTHER INFORMATION CONTACT: John H. Seesel (202-326-2702),
Associate General Counsel, Office of the General Counsel, Federal Trade
Commission, 600 Pennsylvania Avenue NW, Washington, DC 20580.
SUPPLEMENTARY INFORMATION: The Horseracing Integrity and Safety Act,\1\
enacted on December 27, 2020,\2\ and amended on December 29, 2022,\3\
directs the Federal Trade Commission to oversee the activities of a
private, self-regulatory organization called the Horseracing Integrity
and Safety Authority (``HISA'' or the ``Authority''). In March 2023,
the Commission issued rules setting forth the procedure whereby the
Commission approves, disapproves, or modifies the Authority's proposed
annual budget.\4\ Under these rules, the Authority must first publish a
proposed budget on its own website and invite public comments. See 16
CFR 1.150(b). Thereafter, the Authority must forward the budget to the
Commission, along with any public comments received and an assessment
of those comments. Id. The Authority's submission must include (a) a
statement of the vote by the Authority's Board of Directors approving
the proposed budget; (b) information about revenues, including how fees
are calculated and apportioned; (c) information about expenditures,
broken down by program area, e.g., the racetrack safety program, the
anti-doping and medication control program, etc.; (d) sufficient
information about individual line items for the Authority's Board of
Directors to exercise their fiduciary duty of care; and (e) information
comparing actual revenues and expenses against the approved budget and
explaining variances of greater than 10 percent. 16 CFR 1.150(c).
---------------------------------------------------------------------------
\1\ Codified at 15 U.S.C. 3051 through 3060.
\2\ Public Law 116-260, 134 Stat. 1182, 3252 (Dec. 27, 2020).
\3\ Public Law 117-328, 136 Stat. 4459, 5231 (Dec. 29, 2022).
\4\ 88 FR 18034 (Mar. 23, 2023); see 16 CFR 1.150 1through
1.152.
---------------------------------------------------------------------------
After the Authority submits its proposed budget and supporting
materials to the Commission, the Commission must determine whether
``the proposed budget contains sufficient information for the members
of the Board of Directors of the Authority to exercise their fiduciary
duty of care,'' 16 CFR 1.150(d), and whether the submission otherwise
comports with the submission requirements of the Commission's rules.
Id.; see 16 CFR 1.143. Once the Commission makes that determination, it
publishes the Authority's proposed budget in the Federal Register and
invites public comment for a period of 14 days. Id. After taking into
consideration the comments submitted, the Commission either approves or
disapproves the budget. 16 CFR 1.151(a).\5\ The Commission will approve
the proposed budget if ``the Commission determines that, on balance,
the proposed budget serves the goals of the Horseracing Integrity and
Safety Act in a prudent and cost-effective manner, utilizing
commercially reasonable terms with all outside vendors, and that its
anticipated revenues are sufficient to meet its anticipated
expenditures.'' 16 CFR 1.151(c). The Commission may also modify the
amount of any line item. 16 CFR 1.151(d).
---------------------------------------------------------------------------
\5\ 16 CFR 1.151(a) provides that ``[t]he Commission will vote
on the Authority's proposed budget no later than November 1.''
Pursuant to 16 CFR 4.3(b)(2), the Commission hereby extends the
voting deadline to December 1, 2023, to allow the Commission
sufficient time to consider any comments filed in response to this
Notice.
---------------------------------------------------------------------------
On September 1, 2023, the Authority forwarded to the Commission a
Notice of Filing of HISA Budget, together with appendices furnishing
detailed information pertinent to its 2024 budget proposal (as required
by 16 CFR 1.150(c)). The Notice of Filing of HISA Budget is reproduced
below. The appendices to which it refers have been collected and
reproduced as a supporting document on the docket for this publication
at https://www.regulations.gov.
Based upon these submissions and additional information the
Authority has provided to the Commission, the Commission concludes that
the Authority's proposed 2024 budget ``contains sufficient information
for the members of the Board of Directors of the Authority to exercise
their fiduciary duty of care.'' 16 CFR 1.150(d). The Authority's
submission also complies with the filing procedures set forth in 16 CFR
1.143. The Commission therefore issues this document and invites
comments from the public on the Authority's 2024 budget. Comments
should address the decisional criteria set forth in 16 CFR 1.151(c) and
whether any line items should be modified. See 16 CFR 1.151(e).
You can file a comment online or on paper. For the Commission to
consider your comment, we must receive it on or before November 27,
2023. Write ``HISA 2024 Budget, Matter No. P222100'' on your comment.
Your comment--including your name and your state--will be placed on the
public record of this proceeding, including the https://www.regulations.gov website.
Postal mail addressed to the Commission is subject to delay due to
heightened security screening. As a result, we strongly encourage you
to submit your comments online. To make sure the Commission considers
your online comment, you must file it at https://www.regulations.gov,
by following the instructions on the web-based form.
If you file your comment on paper, write ``HISA 2024 Budget, Matter
No. P222100'' on your comment and on the envelope, and mail your
comment to the following address: Federal Trade Commission, Office of
the Secretary, 600 Pennsylvania Avenue NW, Suite CC-5610 (Annex H),
Washington, DC 20580. If possible, please submit your paper comment to
the Commission by overnight service.
Because your comment will be placed on the publicly accessible
website at https://www.regulations.gov, you are solely responsible for
making sure your comment does not include any sensitive or confidential
information. In particular, your comment should not include any
sensitive personal information, such as your or anyone else's Social
Security number; date of birth; driver's license number or other state
identification number, or foreign country equivalent; passport number;
financial account number; or credit or debit card number. You are also
solely responsible for making sure your comment does not include any
sensitive health information, such as medical records or other
individually identifiable health information. In addition, your comment
should not include any ``any trade secret or any commercial or
financial information . . . which is privileged or confidential.'' 15
U.S.C. 46(f); see 16 CFR 4.10(a)(2). Your comment should not include
competitively sensitive information such as costs, sales statistics,
inventories, formulas, patterns, devices, manufacturing processes, or
customer names.
Comments containing material for which confidential treatment is
requested must be filed in paper form, must be clearly labeled
``Confidential,'' and must comply with 16 CFR 4.9(c). In particular,
the written request for confidential treatment that accompanies the
comment must include the factual and legal basis for the request and
must identify the specific portions of the comment to be withheld from
the public record. See 16 CFR 4.9(c). Your
[[Page 77584]]
comment will be kept confidential only if the General Counsel grants
your request in accordance with the law and the public interest. Once
your comment has been posted publicly at https://www.regulations.gov,
as legally required by 16 CFR 4.9(b), we cannot redact or remove your
comment, unless you submit a confidentiality request that meets the
requirements for such treatment under 16 CFR 4.9(c), and the General
Counsel grants that request.
Visit the FTC website to read this document. The FTC Act and other
laws that the Commission administers permit the collection of public
comments to consider and use in this proceeding as appropriate. The
Commission will consider all timely and responsive public comments it
receives on or before November 27, 2023. For information on the
Commission's privacy policy, including routine uses permitted by the
Privacy Act, see https://www.ftc.gov/site-information/privacy-policy.
The text that follows is the Notice of Filing of HISA Budget that
the Authority submitted to the Commission. The appendices to which it
refers have been collected and reproduced as a supporting document on
the docket for this publication at https://www.regulations.gov.
Notice of Filing of HISA Budget
Pursuant to the Horseracing Integrity and Safety Act of 2020 \6\
(the ``Act'') and the Federal Trade Commission's (the ``Commission'')
Procedures for Oversight of the Horseracing Integrity and Safety
Authority's Annual Budget,\7\ notice is hereby given that on September
1, 2023, the Horseracing Integrity and Safety Authority (``HISA'' or
the ``Authority'') filed with the Commission the Authority's proposed
2024 budget. This Notice of Filing of HISA Budget (the ``Notice'')
provides the contents of the submission as set forth in 16 CFR part 1
subpart U.
---------------------------------------------------------------------------
\6\ 15 U.S.C. 3051 through 3060.
\7\ 16 CFR part 1 subpart U.
---------------------------------------------------------------------------
I. Information Concerning Rule 1.150(b). The Authority's proposed
2024 budget was posted on the HISA website (hisaus.org) on August 17,
2023. The Authority did not receive any comments regarding the budget.
II. Information Concerning Rule 1.150(b)(1). The Authority's 2024
budget was approved by the Authority's Board of Directors by a vote of
8 to 0 and therefore satisfies the requirements of 15 U.S.C.
3052(f)(1)(C)(iii).
III. Information Concerning Rule 1.150(b)(2). Using the Assessment
Methodology Rule approved by the Commission, the Authority calculated
the following:
2024 Assessments by State (attached as Appendix 6).
2024 Assessments by Track (attached as Appendix 7).
Appendix 6 and Appendix 7 display the estimated amount required
from each state racing commission as calculated under the Assessment
Methodology Rule.
The 2024 HISA Budget includes the following revenue line items:
Racetrack Safety Fine Income--this consists of fines
levied for violations of Racetrack Safety rules.
ADMC Fine Income--this consists of fines paid for
violations of the equine medication rules.
Lab Test Income--this consists of the money paid to HISA
to cover the cost of B Sample testing, claimed horse testing, and
clearance testing.
Other Revenue--this consists of payments made by certain
racetracks to reimburse HISA for paying for the cost of Racetrack
Safety rules compliance (there is an offsetting expense).
In-Kind Contributions--this consists of the value of in-
kind contributions received (there is an offsetting expense).
Please note that no loans are contemplated to be procured by HISA
in 2024.
IV. Information Concerning Rule 1.150(b)(3) & (b)(4). The Act
recognizes that the establishment of a national set of uniform
standards for racetrack safety and medication control will enhance the
safety and integrity of horseracing. The 2024 budget allows the
Authority to implement the horseracing anti-doping and medication
control program and the racetrack safety program for Covered Horses,
Covered Persons and Covered Horseraces. Pursuant to the Authority's
Conflict of Interest Policy, ``HISA Representatives involved in
procurement have a special responsibility to adhere to principles of
fair competition in the purchase of products and services by selecting
vendors based exclusively on standard commercial considerations, such
as quality, cost, availability, service and reputation, and not on the
receipt of special favors.'' In addition, the Conflict of Interest
Policy requires:
Transactions to be supported by appropriate documentation;
No entry be made in our books and records that
intentionally hides or disguises the nature of any transaction or of
any of our liabilities, or misclassifies any transactions as to
accounts or accounting periods;
HISA Representatives comply with our system of internal
controls; and
No cash or other assets be maintained for any purpose in
any unrecorded or ``off-the-books'' fund.
In addition, the Conflict of Interest Policy requires that:
No HISA Representative may take or authorize any action
that would cause our financial records or financial disclosures to fail
to comply with generally accepted accounting principles or other
applicable laws, rules, and regulations; and
All HISA Representatives must cooperate fully with our
finance staff, as well as our independent public accountants and legal
counsel, and respond to their questions with candor and provide them
with complete and accurate information to help ensure that our records
are accurate and complete.
Any HISA Representative who becomes aware of any departure from
these standards has a responsibility to report his or her knowledge
promptly to the CEO or Chair of the Board.
The 2024 HISA Summary budget (Appendix 1) is a compilation of the
following departmental budgets: Racetrack Safety (Appendix 2); Anti-
Doping and Medication Control (``ADMC'') (Appendix 3); HIWU (Appendix
3a) Technology (Appendix 4); and Administration (Appendix 5). A summary
of these departmental budgets is set forth below:
1. The 2024 Racetrack Safety budget funds the implementation of the
Racetrack Safety Program as set forth in Rule Series 2000 and as
approved by order of the Commission dated March 3, 2022. The budget
consists of the following items:
a. Salaries/Payroll Taxes/Employee Benefits. The salaries provide
for staffing to support and monitor the Racetrack Safety program,
including those persons necessary to oversee the following components
of the program:
i. Administration
ii. Data Analysis
iii. Track Accreditation Services
iv. Research
v. Stewards' & State Racing Commission Liaison
vi. Jockey Health & Welfare
vii. Education
Salary levels for each position are based on market rates, while
Employee Benefits consist primarily of a HISA contribution to cover a
portion of employee health insurance and a 401(k) match that is
consistent with market practice. The salaries budget provides for nine
racetrack safety employees. As of August 31, 2023, the Racetrack Safety
Program has seven employees. For all employees of the Authority, the
CEO and the CFO, both of whom are
[[Page 77585]]
individuals who do not have a conflict of interest with regard to the
hiring of other open positions, review and document compensation based
on industry norms for similar positions prior to setting and to
offering other open positions. Where needed, the CFO and the CEO rely
upon an outside search agency to help determine compensation for other
open positions. The Authority plans to do a compensation comparison in
2023 using comparability data and provide ongoing oversight to all
staffing processes and payroll.
b. Meetings. This includes the travel, meals, and materials to
support the following annual meetings:
i. Equine Safety Directors
ii. Track Superintendents
iii. Racetrack Safety Committee
These meetings are necessary to promote safety for both horses and
riders.
c. Travel. This category covers the business travel and meal
expenses for all of the employees previously listed in Salaries
(section a) of this department (excluding the travel and meal expenses
for the Meetings described in section b. and the Track Accreditation
Services travel set forth in section f.). Travel to Covered Racetracks
by Authority employees is often necessary to ensure that Covered
Horseraces are run as safely as possible.
d. Supplies. This primarily consists of materials to be used in
various Continuing Education programs provided and overseen by HISA.
These programs ensure that trainers, jockeys, veterinarians, and
stewards are educated in methods and procedures that promote the health
and safety of horses and riders.
e. Professional Services. Several independent contractors and
external service provider companies will partner with HISA on a part-
time basis to provide and/or augment services in the following areas:
i. Data Analysis
ii. Research
iii. Statistical Analysis
iv. Jockey Concussion Tracking
v. National Medical Director
Pay rates are based on market rates for similar positions. All of
these independent contractor relationships will increase the knowledge
base and/or education level of participants in Covered Horseraces.
f. Track Accreditation Services. The Racetrack Safety rules require
that tracks be accredited, and the rules mandate site visits to
determine the extent of compliance with the rules. This category
includes the costs of compensating teams of independent contractors to
perform these site visits, and the costs of covering the travel and
meal expenses for this team. It is expected that the accreditation site
visits will be conducted by teams of three to four individuals. The
costs included in this category were originally estimated based on the
historical costs of site inspections performed by the National
Thoroughbred Racing Association's Safety & Integrity Alliance, and have
been adjusted based on the actual cost of accreditation site visits in
2023. On-site track visits will ensure that track facilities meet the
safety requirements set forth in the Racetrack Safety rules.
g. Track Surface Testing. This category includes the cost of pre-
meet track surface testing of tracks that run Covered Horseraces.
Testing is performed to ensure that track surfaces are safe for horses/
jockeys to run on. This testing is performed by the Racing Surfaces
Testing Laboratory.
2. The 2024 Anti-Doping and Medication Control budget supports the
implementation of the ADMC Protocol. The budget consists of the
following items:
a. Travel. This line item covers the business travel and meal
expenses that are expected to be incurred by HISA personnel to support
and achieve the goals of the ADMC Program.
b. Supplies. This line item sets forth the cost of materials
utilized by the Authority to support and achieve the goals of the ADMC
Program, including services such as continuing education.
c. Professional Services. Several independent contractors will
partner with HISA on a part-time basis to provide and/or augment
services in the following areas:
i. Arbitration--this covers the fees to be paid to arbitrators who
preside over appeals of positive anti-doping tests.
ii. Independent Adjudication Panel (IAP)--this covers the fees paid
to members of the IAP, who hear appeals of positive tests for
controlled medication.
iii. Furosemide Study--this covers the fees to be paid in 2023 for
the furosemide study that is required by the Act.
d. Horseracing Integrity and Welfare Unit (HIWU). The Act requires
that HISA contract with an independent enforcement agency to oversee
the components of the ADMC Program. HIWU, a division of Drug Free
Sport, LLC (``DFS''), has been retained by the Authority as the
independent enforcement agency. The HIWU line items in the ADMC budget
consist of the following:
i. Salaries/Payroll Taxes/Employee Benefits. All HIWU employees are
employed by DFS. The salaries account for a staff (expected to total 44
full-time individuals) that will carry out all of the responsibilities
of the enforcement agency, including those persons necessary to oversee
and complete the following components of the program:
1. Testing Operations
2. Testing Strategy
3. Compliance & Policy
4. Collection Personnel Recruitment, Training, & Certification
5. Support Line Management
6. Science
7. Laboratory Accreditation
8. Equine Medical Resources
9. Intelligence and Strategy
10. Investigative Operations
11. Education
12. Communications & Outreach
13. Legal
14. Litigation
15. Results Management
16. Information Technology
17. Human Resources
18. Finance
HIWU shares staff with DFS in the areas of Information Technology,
Finance and Human Resources. This arrangement produces cost savings,
obviating the need for HIWU to retain full-time employees to provide
these services.
ii. Rent. HIWU has procured 3,000 sq. ft. of office space for its
employees. HIWU is paying $30/sq.ft., which is consistent with market
rates in the Kansas City area. The cost of basic office equipment is
also included in this category.
iii. Office Expense. This consists of common office expenses such
as utilities and maintenance costs and is based on historical costs for
similar businesses.
iv. Telecommunications. This consists of the cost of office phones,
mobile phone service at $65/month/employee (a commercially reasonable
rate), and portable hot-spot wi-fi services to be used in test barns.
v. Travel. This is the travel expense necessary for full-time
employees to perform functions such as meetings with State Racing
Commissions and track associations, training and continuing education
sessions with sample collection personnel, arbitration hearings,
laboratory visits, meetings with HISA personnel, and participation in
industry meetings and conventions. Travel expenses include airfare,
hotel rooms, rental cars, fuel costs, mileage for personal vehicles
used for business purposes, parking, and meals. The amounts for each
expense component
[[Page 77586]]
were based on estimated market average costs.
vi. Supplies. This consists of drug testing supplies needed for
sample collections and sample collection personnel training.
vii. Professional Services. This consists largely of consulting
fees paid to experts in the areas of:
1. Results Management
2. Investigations and State Racing Commission Relations
3. Laboratory Accreditation
The guidance provided by these subject matter experts will result
in a safer sport run on a more level playing field.
viii. Technology. This consists of the cost of all software,
hardware, licenses and continued technological development needed to
perform HIWU's work.
ix. Insurance. The expense consists of the cost of all of HIWU's
insurance policies, including liability insurance with an Umbrella
policy, cyber-risk insurance, property insurance, and workers'
compensation insurance.
x. Resources and Education. This includes Training and Continuing
Education, registration fees for industry conferences, accounting fees
for state tax filings, and dues and subscriptions to industry
publications. All of these are necessary for HIWU to properly conduct
its business.
xi. Taxes--Other. Estimated taxes based on the historical
experience of HIWU's sister companies. These taxes are minimal in
amount and are commercially reasonable.
xii. ADMC Collection Costs. This includes wages paid to sample
collection personnel in all states that conduct Covered Horseraces. The
wage amounts were based on rates paid to sample collection personnel in
each state prior to HIWU assuming these sample collection functions.
Additionally, to cover travel expenses specifically related to sample
collection, this includes airfare, hotel rooms, rental cars, fuel
costs, mileage for personal vehicles used for business purposes,
parking, and meals. The amounts for each expense component were based
on estimated market average costs.
xiii. Management Fees. This is the profit amount to HIWU for
administering the program. It is a negotiated amount of 8% of the total
expenses incurred for services they provide directly and 4% for
everything else.
e. Lab Testing. Once the samples to be tested have been collected
by HIWU personnel, they are shipped to one of six accredited
laboratories located in the United States. All of the laboratories have
many years of experience in the testing of blood, urine, and hair
samples taken from thoroughbred racehorses. HIWU has conducted
extensive negotiations with each of these laboratories in order to
ensure that competent testing is performed at the lowest price
possible. One way HIWU has successfully reduced costs is by utilizing
only six laboratories to perform testing, instead of the nine
laboratories previously used by various state racing commissions across
the country. This allows the six laboratories to spread their fixed
costs (salaried employees, testing equipment, etc.) over a larger
number of samples, resulting in a lower charge per test.
It is important to note that the ADMC Collection Costs and Lab
Testing line items represent 55.2% of the total budget of the
Authority.
3. The 2024 Technology budget supports the building of all IT
systems needed to properly and efficiently manage the Racetrack Safety
and ADMC programs. The budget consists of the following items:
a. Salaries/Payroll Taxes/Employee Benefits. This contemplates nine
HISA full-time employees in areas including programming, field support,
internal support, external support, project administration, and third-
party developer coordination. Salary levels for each position are based
on market rates, while Employee Benefits consist primarily of a HISA
contribution to cover a portion of employee health insurance and a
401(k) match that is consistent with market practice. As of August 31,
2023, the Technology department has five employees.
b. Travel. This includes the costs of travel by IT employees to
racetracks to meet with customers/users, to Lexington, Kentucky for
HISA meetings, and to training seminars and technology summit meetings.
Participation by IT employees in these meetings and seminars will
result in a more efficient program that better meets the needs of the
constituents.
c. Supplies. This includes the purchase of laptops for all HISA
employees, the provision of workstations for those employees located in
the Lexington office, and the hardware/software/3rd-party services
needed for image processing. These items are necessary for HISA to
efficiently perform its duties under the Act.
d. Technology. This item includes the costs of cloud computing and
other specialized applications that together form the foundation of
HISA's technology system. For example (and most significantly), this
category includes the cost of Amazon Web Services, as well as
relationships with other vendors relating to the HISA website and
technology systems. In order to be as cost-effective as possible, HISA
has chosen not to invest in centralized computing assets. This keeps
costs low and increases flexibility as HISA is engaged in expanding its
staff and infrastructure.
e. Professional Services. This item budgets for outsourced
technology delivery provided by third-party system integrators and
software factories. Given the need for cost-effective, round-the-clock
services, the necessary software and technology systems were procured
internationally from development resources in the US, Europe, and Asia;
this allowed for the implementation of a 24-hour code and test
development cycle. This is the most cost-effective method of building
and maintaining technology systems/portals to facilitate program
reporting to and monitoring by HISA.
4. The 2024 Administration budget consists of the general and
administrative staff and expenditures that are needed to conduct HISA's
business. This budget consists of:
a. Salaries/Payroll Taxes/Employee Benefits. This includes
executive-level personnel (the CEO and CFO), plus employees in Legal,
Communications, Operations/Compliance, and Administrative Services.
Salary levels for each position are based on market rates, while
Employee Benefits consist primarily of a HISA contribution to cover a
portion of employee health insurance and a 401(k) match that is
consistent with market practice. As of August 31, 2023, six employees
make up the Administration Department. The Administration Department
has not filled all of its budgeted positions.
b. Board/Committee Travel. This consists of travel, hotel, and meal
expenses for the one annual board meeting that is held with in-person
attendance by the board members.
c. Rent. HISA currently contemplates that, in order to be as cost-
efficient as possible, it will not rent a stand-alone office and will
instead continue its office-sharing arrangement with the National
Thoroughbred Racing Association.
d. Phones. This is the cost of an office phone system in HISA's
corporate office, necessary for HISA to conduct its business.
e. Meetings. This is the cost of miscellaneous meetings of HISA's
corporate staff as are necessary for HISA to conduct its business.
[[Page 77587]]
f. Travel. This includes airfare, car rental, mileage, and meals
for HISA's corporate staff in the course of traveling to Covered
Racetracks, industry meetings, HISA meetings (strategic planning
summits, board meetings, etc.), and meetings with industry
stakeholders. Travel to these events allows HISA's corporate staff to
conduct its business more efficiently and to perform its duties under
the Act.
g. Interest. This includes the interest expected to be charged on
the loans that HISA procured to fund its initial operations.
h. Bank Fees. This includes the cost of bank fees and credit card
fees. These fees are minimal and are necessary to efficiently and
effectively conduct business.
i. Supplies. This includes the cost of all office supplies,
including printer/copier paper, printer/copier ink and toner, postage,
shipping, and other miscellaneous office supplies.
j. Accounting Services. This consists of the cost of a contract
bookkeeping service that will book accounting entries, produce
financial statements, manage and process Accounts Receivable, manage
and process Accounts Payable, and draft/file HISA's annual IRS Form
990. Contracting this work out to a company with expertise in these
areas is much more cost-effective than if HISA were to hire staff to
perform these functions in-house. Additionally, this includes the
estimated cost of an annual independent audit of HISA.
k. Public Relations Services. This is the cost of a contract public
relations service to manage HISA's website, issue press releases,
assist with the production and distribution of information to industry
stakeholders, and provide continuing education information for industry
stakeholders. The public relations firm that HISA is working with has
many years of expertise in P/R for thoroughbred racing enterprises. The
firm can perform the aforementioned tasks more efficiently and
effectively than if HISA were to hire staff to perform these tasks in-
house.
l. Legal. This includes the cost of outside legal counsel for the
creation, management, and updating of Racetrack Safety and ADMC rules
as well as the cost of outside counsel that is working on the various
lawsuits in which HISA is a party. Doing all of these tasks requires a
decentralized group of lawyers with varied skill sets. At present, it
is much more efficient and effective to utilize outside counsel than
for HISA to hire a large in-house legal team to handle these issues.
m. Insurance. This includes the following insurance policies for
HISA:
i. Directors & Officers insurance.
ii. Workers' Compensation insurance.
All these policies were competitively shopped by a broker to get
the lowest rate possible.
n. Payroll Services. This includes all costs of HISA's relationship
with Resource Management, Inc. (RMI), a Professional Employer
Organization (PEO). RMI provides Human Resources administration
(handbook and policy management resources, new employee onboarding,
labor law assistance, etc.), benefits management, compliance services
(workers' compensation claims management and annual reporting,
unemployment claims management, etc.) and payroll administration
(payroll processing, W2 management, vacation tracking, etc.). The
relationship with RMI allows these functions to be performed in a more
cost-effective manner than if HISA hired employees to perform those
functions.
o. Professional Services. This account consists of:
i. Consulting fees to assist HISA with board and executive
functions.
ii. $300,000 contingency fund set aside for unexpected expenses.
These items will ensure that HISA has high quality employees who
are well-trained to properly serve its constituents.
Please note that the 2024 HISA budget contemplates the repayment of
$1.25M of loans; it does not assume that any funding shortfall will be
incurred.
V. Information Concerning Rule 1.150(b)(5). Attached as Appendix 8
is a comparison of the approved HISA 2023 Budget to actual revenues and
expenditures. A variance has been calculated for each line item, and a
narrative explanation has been provided for all variances >10% and at
least $100,000.
Conclusion
The budget furthers the purpose of the Act in that it allocates the
funding necessary for the successful implementation by HISA of the
requirements of the Act. The budget has been carefully analyzed and is
narrowly tailored to the various regulatory activities of HISA as
contemplated by the Act.
By direction of the Commission.
April J. Tabor,
Secretary.
[FR Doc. 2023-24939 Filed 11-9-23; 8:45 am]
BILLING CODE 6750-01-P