Notice2022-24609
HISA Assessment Methodology Rule Modification
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
November 10, 2022
Effective
January 9, 2023
Issuing agencies
Federal Trade Commission
Abstract
The Horseracing Integrity and Safety Act of 2020 recognizes a self-regulatory nonprofit organization, the Horseracing Integrity and Safety Authority, which is charged with developing proposed rules on a variety of subjects. Those proposed rules and proposed rule modifications take effect only if approved by the Federal Trade Commission. The proposed rules and rule modifications must be published in the Federal Register for public comment. Thereafter, the Commission has 60 days from the date of publication to approve or disapprove the proposed rule or rule modification. The Authority submitted to the Commission a proposed rule modification on Assessment Methodology on October 20, 2022. The Office of the Secretary of the Commission determined that the proposal complied with the Commission's rule governing such submissions. This document publicizes the Authority's proposed rule modification's text and explanation, and it seeks public comment on whether the Commission should approve or disapprove the proposed rule modification.
Full Text
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<title>Federal Register, Volume 87 Issue 217 (Thursday, November 10, 2022)</title>
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[Federal Register Volume 87, Number 217 (Thursday, November 10, 2022)]
[Notices]
[Pages 67915-67919]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-24609]
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FEDERAL TRADE COMMISSION
[File No. P222100]
HISA Assessment Methodology Rule Modification
AGENCY: Federal Trade Commission.
ACTION: Notice of Horseracing Integrity and Safety Authority (HISA)
proposed rule modification; request for public comment.
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SUMMARY: The Horseracing Integrity and Safety Act of 2020 recognizes a
self-regulatory nonprofit organization, the Horseracing Integrity and
Safety Authority, which is charged with developing proposed rules on a
variety of subjects. Those proposed rules and proposed rule
modifications take effect only if approved by the Federal Trade
Commission. The proposed rules and rule modifications must be published
in the Federal Register for public comment. Thereafter, the Commission
has 60 days from the date of publication to approve or disapprove the
proposed rule or rule modification. The Authority submitted to the
Commission a proposed rule modification on Assessment Methodology on
October 20, 2022. The Office of the Secretary of the Commission
determined that the proposal complied with the Commission's rule
governing such submissions. This document publicizes the Authority's
proposed rule modification's text and explanation, and it seeks public
comment on whether the Commission should approve or disapprove the
proposed rule modification.
DATES: If approved, the HISA proposed rule modification would take
effect upon approval, and the Commission must approve or disapprove the
proposed rule modification January 9, 2023. Comments must be received
on or before November 25, 2022.
ADDRESSES: Interested parties may file a comment online or on paper by
following the instructions in the Comment Submissions part of the
SUPPLEMENTARY INFORMATION section below. Write ``HISA Assessment
Methodology Rule Modification'' on your comment and file your comment
online at <a href="https://www.regulations.gov">https://www.regulations.gov</a> under docket number FTC-2022-
0068. If you prefer to file your 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 B),
Washington, DC 20580.
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:
Table of Contents
I. Self-Regulatory Organization's Statement of the Background,
Purpose of, and Statutory Basis for, the Proposed Rule Modification
a. Background and Purpose
b. Statutory Basis
II. Self-Regulatory Organization's Statement of the Terms of
Substance of the Proposed Rule Modification and Discussion of
Alternatives
III. Self-Regulatory Organization's Summary of Comments Received
Pre-Submission and Its Responses to Those Comments
IV. Legal Authority
V. Effective Date
VI. Request for Comments
VII. Comment and Submissions
VIII. Communications by Outside Parities to the Commissioners or
Their Advisors
IX. Self-Regulatory Organization's Proposed Rule Language
Background
The Horseracing Integrity and Safety Act of 2020 \1\ recognizes a
self-regulatory nonprofit organization, the Horseracing Integrity and
Safety Authority, which is charged with developing proposed rules on a
variety of subjects. Those proposed rules and proposed rule
modifications take effect only if approved by the Federal Trade
Commission.\2\ The proposed rules and rule modifications must be
published in the Federal Register for public comment.\3\ Thereafter,
the Commission has 60 days from the date of publication to approve or
disapprove the proposed rule or rule modification.\4\
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\1\ 15 U.S.C. 3051 through 3060.
\2\ 15 U.S.C. 3053(b)(2).
\3\ 15 U.S.C. 3053(b)(1).
\4\ 15 U.S.C. 3053(c)(1).
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Pursuant to Section 3053(a) of the Horseracing Integrity and Safety
Act of 2020 and Commission Rule 1.142, notice is hereby given that, on
October 20, 2022, the Horseracing Integrity and Safety Authority
(``HISA'' or the ``Authority'') filed with the Federal Trade Commission
an Enforcement proposed rule modification and supporting documentation
as described in Items I, II, III, and IX below, which Items have been
prepared by the Authority. The Office of the Secretary of the
Commission determined that the filing complied with the Commission's
rule governing such submissions.\5\ The Commission publishes this
notice to solicit comments on the proposed rule modification from
interested persons.
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\5\ 16 CFR 1.140 through 1.144; see also Fed. Trade Comm'n,
Procedures for Submission of Rules Under the Horseracing Integrity
and Safety Act, 86 FR 54819 (Oct. 5, 2021), <a href="https://www.federalregister.gov/documents/2021/10/05/2021-21306/procedures-for-submission-of-rules-under-the-horseracing-integrity-and-safety-act">https://www.federalregister.gov/documents/2021/10/05/2021-21306/procedures-for-submission-of-rules-under-the-horseracing-integrity-and-safety-act</a>.
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I. Self-Regulatory Organization's Statement of the Background, Purpose
of, and Statutory Basis for, the Proposed Rule Modification
a. Background and Purpose
The Horseracing Integrity and Safety Act of 2020 (``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 Assessment Methodology rule is
established in the Rule 8500 Series, the ``Assessment Methodology
Rule'' filed by the Authority with the Commission earlier this year.
The Rule 8500 Series was published in the Federal Register on February
18, 2022,\6\ and subsequently approved by the Commission by Order dated
April 1, 2022.\7\
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\6\ See Fed. Trade Comm'n, Notice of HISA Assessment Methodology
Proposed Rule (``Notice''), 87 FR 9349 (Feb. 18, 2022), <a href="https://www.federalregister.gov/documents/2022/02/18/2022-03717/hisa-assessment-methodology-rule">https://www.federalregister.gov/documents/2022/02/18/2022-03717/hisa-assessment-methodology-rule</a>.
\7\ See Fed. Trade Comm'n, Order Approving the Assessment
Methodology Rule Proposed by the Horseracing Integrity & Safety
Auth. (Apr. 1, 2022), <a href="https://www.ftc.gov/system/files/ftc_gov/pdf/Order%20re%20HISA%20Assessment%20Methodology.pdf">https://www.ftc.gov/system/files/ftc_gov/pdf/Order%20re%20HISA%20Assessment%20Methodology.pdf</a>.
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The Authority proposes to modify the Rule 8500 Series and to
supplement it with additional provisions. The proposed rule
modifications are described in detail in Item II of this Notice. The
modifications are intended to address suggested changes and potential
problems in interpreting and implementing the rule by amending dates
specified in the rule, providing a True-Up Calculation based on actual
rather than projected starts and purse starts, providing alternative
calculation methods should a court enjoin the enforcement of Rule 8500
based on the use of Projected Purse Starts, and addressing the scenario
of a State racing commission's electing to remit fees after the initial
election date to remit fees.
The proposed modifications are consistent with the requirements of
the Act in that they further the purpose of properly and equitably
allocating the costs of the Authority's operations to the States or
Covered Persons involved with Covered Horseraces, as mandated by 15
U.S.C. 3052(f). The cost allocations ensure that the Authority is
adequately funded and able to implement the provisions of the Act.
Successful implementation of the Act affects Covered Persons, Covered
Horses, and
[[Page 67916]]
Covered Horseraces by ensuring that the horseracing anti-doping and
medication control program and the racetrack safety program operate to
enhance the safety and integrity of horseracing and all its human and
equine participants.
The Act requires that the Authority provide to each State racing
commission an estimated amount required from the State to ``(i) to fund
the State's proportionate share of the horseracing anti-doping and
medication control program and the racetrack safety program for the
next calendar year; and (ii) to liquidate the State's proportionate
share of any loan or funding shortfall in the current calendar year and
any previous calendar year.'' \8\ A state's proportionate share is to
be based on the annual budget of the Authority, ``the projected amount
of covered racing starts for the year in each State'' and shall ``take
into account other sources of Authority revenue.'' \9\
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\8\ 15 U.S.C. 3052(f)(1)(C)(i).
\9\ Id. 3052(f)(1)(C)(ii).
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If a State racing commission does elect to remit fees pursuant to
15 U.S.C. 3052(f)(2), then the Authority is required to ``not less
frequently than monthly, calculate the applicable fee per racing start
multiplied by the number of racing starts in the State during the
preceding month.'' \10\ This calculation is required to be allocated
equitably ``among covered persons involved with covered horseraces
pursuant to such rules as the Authority may promulgate'' and collected
``according to such rules as the Authority may promulgate.'' \11\
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\10\ Id. 3052(f)(3)(A).
\11\ Id. 3052(f)(3)(B).
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With the review, input and ultimate approval of the Authority's
Board of Directors, the proposed rule modification to the Rule 8500
Series enhances the procedures for the Assessment Methodology Rule
promulgated by the Authority.
b. Statutory Basis
The Horseracing Integrity and Safety Act of 2020, 15 U.S.C. 3051
through 3060.
II. Self-Regulatory Organization's Statement of the Terms of Substance
of the Enforcement Proposed Rule Modification and Discussion of
Alternatives
Rule 8520(a), as originally filed with the Commission, did not
address the scenario of a State racing commission's electing to remit
fees after the initial election date to remit fees. The Authority now
proposes to add the following language to Rule 8520(a): ``If a State
racing commission elects to remit fees pursuant to 15 U.S.C. 3052(f)(2)
for any subsequent calendar year, the State racing commission shall
notify the Authority in writing on or before 30 days from the receipt
of the estimated amount provided to the State racing commission
pursuant to Rule 8520(b). A State racing commission may be permitted to
pay a portion of the estimated amount provided to the State racing
commission pursuant to Rule 8520(b). In such case, the remaining
portion of the estimated amount provided to the State racing commission
pursuant to Rule 8520(b) shall be paid pursuant to Rule 8520(e).'' With
this revision, Rule 8520(a) allows a State racing commission to elect
to remit fees pursuant to 15 U.S.C. 3052(f)(2) for any year that it
elects to do so. In addition, the revision permits a State racing
commission to pay a portion of the estimated amount provided to the
State racing commission pursuant to Rule 8520(b). These modifications
afford State racing commissions broader flexibility in their payment
options.
As noted below, several commentators suggested that the dates set
forth in the proposed modification were confusing. These comments were
accepted by the Authority, and a change is proposed to Rule 8520(b) and
Rule 8520(e)(4). Rule 8520(b) would now state: ``Not later than
November 1, 2022, and not later than November 1 of each year thereafter
. . . .'' Rule 8520(e)(4) would now state: ``Not later than December
10, 2022, and not later than December 10 each year thereafter . . . .''
These changes provide greater clarity to the deadlines set forth in
Assessment Methodology. New language was also added in Rule 8520(e) to
account for partial payments under Rule 8520(a). These changes make
clear that the payments made under Rule 8520(e) shall take into account
any partial payments made by State racing commissions.
Rule 8520(f) is a new subsection. The Act and the Assessment
Methodology rule necessarily base the annual assessments on Projected
Starts and Projected Purse Starts. This new subsection requires the
Authority to ``true-up'' the projected start and purse start amounts
with the actual numbers for these amounts. Rule 8520(f) requires the
Authority to calculate the actual number of starts in covered
horseraces for the previous calendar year and the actual total amount
of purses for covered horseraces for the previous calendar year and
apply such amounts to the calculations set forth in Rule 8520(c),
instead of the projected amounts utilized in the calculation of the
estimated amount provided to the State racing commission pursuant to
Rule 8520(b) for the relevant calendar year (the ``True-Up
Calculation''). The current year allocations are then equitably
adjusted to account for any differences between the estimated amount
provided to the state racing Commission pursuant to Rule 8520(b) for
the previous year and the True-Up Calculation. The remainder of Rule
8520(f) addresses a comment posted on <a href="https://www.regulations.gov">https://www.regulations.gov</a>
during the notice-and-comment period for the Assessment Methodology
rule. This new provision allows State racing commissions, horsemen's
organizations, and Racetracks to object to the Equibase numbers. The
Authority has been in discussion with industry stakeholders since April
of this year concerning the True-Up Calculation, and the calculation is
consistent with the goals and purposes of the Act. It is self-evident
that the assessments should ultimately be based on actual numbers
instead of projected numbers.
Rule 8520(g) is a new subsection. Certain states and stakeholders
have objected to the use of Projected Purse Starts in Assessment
Methodology. If an injunction enjoins the enforcement of the Rule 8500
Series based on the use of Projected Purse Starts in Assessment
Methodology, Rule 8520(g) requires the applicable States, Racetrack,s
and Covered Persons, as the case may be, to pay the allocation due from
each State pursuant to 15 U.S.C. 3052(f)(1)(C) and 15 U.S.C.
3052(f)(3)(A)-(C) proportionally by the applicable State's respective
percentage of Projected Starts. Rule 8520(g) operates as a savings
clause and ensures that Assessment Methodology will continue to operate
during any court challenges.
All the changes proposed in the Assessment Methodology proposed
rule modification are intended to enhance the Rule 8500 Series in a
manner that is consistent with the Act. The modifications have been
crafted to address specific issues in the most precise manner possible,
and no reasonable alternatives presented themselves for consideration.
The proposed rules are carefully tailored to the unique character of
horseracing and to the organizational structure of the Authority.
III. Self-Regulatory Organization's Summary of Comments Received Pre-
Submission and Its Responses to Those Comments
As encouraged by the Commission's procedural rule, the Authority,
before finalizing this submission to the Commission, made a draft of
the
[[Page 67917]]
Assessment Methodology proposed rule modification available to the
public for review and comment on the HISA website, <a href="https://www.hisausregs.org/">https://www.hisausregs.org/</a>. On September 19, 2022, and September 24, 2022,
Authority representatives shared a draft of the proposed rule
modification with interested stakeholders for input. Those interested
stakeholders included: Racing Officials Accreditation Program; Racing
Medication and Testing Consortium (Scientific Advisory Committee);
Water Hay Oats Alliance; National Thoroughbred Racing Association; The
Jockey Club; The Jockeys' Guild; Thoroughbred Racing Association;
Arapahoe Park; Colonial Downs; Thoroughbred Owners of California;
California Horse Racing Board; National Horsemen's Benevolent and
Protective Association; Thoroughbred Owners and Breeders Association;
Kentucky Thoroughbred Association; American Association of Equine
Practitioners; American Veterinary Medical Association; Stronach Racing
Group (5 thoroughbred racetracks); Churchill Downs (6 thoroughbred
racetracks); Keeneland; and Del Mar. On September 19, 2022, the rule
modification proposal was made available to the public for review and
comment on the HISA website at <a href="https://www.hisaus.org/">https://www.hisaus.org/</a>. Available on
the docket at <a href="https://www.regulations.gov">https://www.regulations.gov</a> is Exhibit A, which includes
copies of all comments received concerning the rule modification
proposal.
Comments on the Assessment Methodology proposed rule modification
were received from seven groups in the horseracing industry: Racing
Officials Accreditation Program, the American Association of Equine
Practitioners, the Washington Horse Racing Commission, Oregon Racing
Commission, Oklahoma Horse Racing Commission, American Veterinary
Medical Association, and the National HBPA, Inc. The first four of
these commenters had no specific suggested changes to the proposed
modifications. The Oklahoma Commission and American Veterinary Medical
Association both suggested that the retention in the rule of dates that
had already occurred was confusing. As noted above, these suggestions
were adopted. The remaining commenter, National HBPA, addressed a
portion of Rule 8520(e) that had not been proposed to be modified. This
commenter also requested that horsemen's organizations be permitted to
object to the Equibase numbers. As noted above, this suggestion was
adopted. And finally, this commenter suggested that Rule 8520(g) should
be revised to establish a process to allocate an underpayment or
overpayment. The Authority declined to make this change. No process is
necessary. As set forth in the rule, if an injunction is reversed by a
court of competent jurisdiction, the Authority shall adjust the
allocation due in the current calendar year to account for the
overpayment or underpayment created using the Alternative Calculation
made during the time that the injunction was in force. This adjustment
is simply a mathematical calculation.
IV. Legal Authority
This rule modification is proposed by the Authority for approval or
disapproval by the Commission under 15 U.S.C. 3053(c)(1).
V. Effective Date
If approved by the Commission, this proposed rule modification will
take effect immediately.
VI. Request for Comments
Members of the public are invited to comment on the Authority's
proposed rule modification. The Commission requests that factual data
on which the comments are based be submitted with the comments. The
supporting documentation referred to in the Authority's filing, as well
as the written comments it received before submitting the proposed rule
modification to the Commission, are available for public inspection at
<a href="https://www.regulations.gov">https://www.regulations.gov</a> under docket number FTC-2022-0068.
The Commission seeks comments that address the decisional criteria
provided by the Act. The Act gives the Commission two criteria against
which to measure proposed rules and rule modifications: ``The
Commission shall approve a proposed rule or modification if the
Commission finds that the proposed rule or modification is consistent
with--(A) this chapter; and (B) applicable rules approved by the
Commission.'' \12\ In other words, the Commission will evaluate the
proposed rule modification for its consistency with the specific
requirements, factors, standards, or considerations in the text of the
Act as well as the Commission's procedural rule.
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\12\ 15 U.S.C. 3053(c)(2).
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Although the Commission must approve the proposed rule modification
if the Commission finds that the proposed rule modification is
consistent with the Act and the Commission's procedural rule, the
Commission may consider broader questions about the health and safety
of horses or the integrity of horseraces and wagering on horseraces in
another context: ``The Commission may adopt an interim final rule, to
take effect immediately, . . . if the Commission finds that such a rule
is necessary to protect--(1) the health and safety of covered horses;
or (2) the integrity of covered horseraces and wagering on those
horseraces.'' \13\ The Commission may exercise its power to issue an
interim final rule on its own initiative or in response to a petition
from a member from the public. If members of the public wish to provide
comments to the Commission that bear on protecting the health and
safety of horses or the integrity of horseraces and wagering on
horseraces but do not discuss whether the Authority's Enforcement
proposed rule modification is consistent with the Act or the applicable
rules, they should not submit a comment here. Instead, they are
encouraged to submit a petition requesting that the Commission issue an
interim final rule addressing the subject of interest. The petition
must meet all the criteria established in the Rules of Practice (Part
1, Subpart D); \14\ if it does, the petition will be published in the
Federal Register for public comment. In particular, the petition for an
interim final rule must ``identify the problem the requested action is
intended to address and explain why the requested action is necessary
to address the problem.'' \15\ As relevant here, the petition should
provide sufficient information for the public to comment on, and for
the Commission to find, that the requested interim final rule is
``necessary to protect--(1) the health and safety of covered horses; or
(2) the integrity of covered horseraces and wagering on those
horseraces.'' \16\
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\13\ 15 U.S.C. 3053(e).
\14\ 16 CFR 1.31; see Fed. Trade Comm'n, Procedures for
Responding to Petitions for Rulemaking, 86 FR 59851 (Oct. 29, 2021).
\15\ 16 CFR 1.31(b)(3).
\16\ 15 U.S.C. 3053(e).
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VII. Comment Submissions
You can file a comment online or on paper. For the Commission to
consider your comment, we must receive it on or before November 25,
2022. Write ``HISA Assessment Methodology Rule Modification'' on your
comment. Your comment--including your name and your State--will be
placed on the public record of this proceeding, including, to the
extent practicable, on the website <a href="https://www.regulations.gov">https://www.regulations.gov</a>.
Because of public health considerations and the Commission's
heightened security screening, postal mail addressed to the Commission
will be subject to delay. The Commission
[[Page 67918]]
strongly encourages that comments be submitted online through the
<a href="https://www.regulations.gov">https://www.regulations.gov</a> website. To ensure that the Commission
considers online comment, please follow the instructions on the web-
based form.
If you file your comment on paper, write ``HISA Assessment
Methodology Rule Modification'' 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 B), Washington, DC 20580.
Because your comment will be placed on the public record, you are
solely responsible for making sure that your comment does not include
any sensitive or confidential information. In particular, your comment
should not contain 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 ``[t]rade secret or
any commercial or financial information which . . . is privileged or
confidential''--as provided in Section 6(f) of the FTC Act, 15 U.S.C.
46(f), and FTC Rule Sec. 4.10(a)(2), 16 CFR 4.10(a)(2)--including in
particular 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 FTC Rule Sec. 4.9(c), 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 FTC Rule Sec. 4.9(c). Your
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 <a href="https://www.regulations.gov">https://www.regulations.gov</a>--
as legally required by FTC Rule Sec. 4.9(b), 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 FTC Rule
Sec. 4.9(c), and the General Counsel grants that request.
Visit the FTC website to read this document and the news release
describing it. 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
25, 2022. For information on the Commission's privacy policy, including
routine uses permitted by the Privacy Act, see <a href="https://www.ftc.gov/siteinformation/privacypolicy">https://www.ftc.gov/siteinformation/privacypolicy</a>.
VIII. Communications by Outside Parties to the Commissioners or Their
Advisors
Written communications and summaries or transcripts of oral
communications respecting the merits of this proceeding, from any
outside party to any Commissioner or Commissioner's advisor, will be
placed on the public record. See 16 CFR 1.26(b)(5).
IX. Self-Regulatory Organization's Proposed Rule Language
The following language reflects the Assessment Methodology rule
with the proposed modifications incorporated. A redline version that
shows every way in which the previously approved Assessment Methodology
rule would be modified by the proposed rule modification is available
as Exhibit B on the docket at <a href="https://www.regulations.gov">https://www.regulations.gov</a>.
8500. Methodology for Determining Assessments
8510. Definitions
For purposes of this Rule 8500 Series:
(a) Annual Covered Racing Starts means, for the following calendar
year, the sum of: (i) 50 percent of the number of Projected Starts;
plus (ii) 50 percent of the number of Projected Purse Starts.
(b) Covered Horseraces has the meaning set forth in 15 U.S.C.
3051(5).
(c) Covered Persons has the meaning set forth in 15 U.S.C. 3051(6).
(d) Projected Starts means the number of starts in Covered
Horseraces in the previous 12 months as reported by Equibase, after
taking into consideration alterations in the racing calendar of the
relevant State(s) for the following calendar year.
(e) Projected Purse Starts means: (i) the total amount of purses
for Covered Horseraces as reported by Equibase (not including the
Breeders' Cup World Championships Races), after taking into
consideration alterations in purses for the relevant State(s) for the
following calendar year; divided by (ii) the Projected Starts for the
following calendar year.
(f) Racetrack has the meaning set forth in 15 U.S.C. 3051(15).
8520. Annual Calculation of Amounts Required
(a) If a State racing commission elects to remit fees pursuant to
15 U.S.C. 3052(f)(2), the State Racing Commission shall notify the
Authority in writing on or before May 2, 2022 of its decision to elect
to remit fees. If a State racing commission elects to remit fees
pursuant to 15 U.S.C. 3052(f)(2) for any subsequent calendar year, the
State racing commission shall notify the Authority in writing on or
before 30 days from the receipt of the estimated amount provided to the
State racing commission pursuant to Rule 8520(b). A State racing
commission may be permitted to pay a portion of the estimated amount
provided to the State racing commission pursuant to Rule 8520(b). In
such case, the remaining portion of the estimated amount provided to
the State racing commission pursuant to Rule 8520(b) shall be paid
pursuant to Rule 8520(e).
(b) Not later than November 1, 2022, and not later than November 1
of each year thereafter, the Authority shall determine and provide to
each State Racing Commission the estimated amount required from each
State pursuant to the calculation set forth in Rule 8520(c) below.
(c) Upon the approval of the budget for the following calendar year
by the Board of the Authority, and after taking into account other
sources of Authority revenue, the Authority shall allocate the
calculation due from each State pursuant to 15 U.S.C. 3052(f)(1)(C)(i)
proportionally by each State's respective percentage of the Annual
Covered Racing Starts. The proportional calculation for each State's
respective percentage of the Annual Covered Racing Starts shall be
calculated as follows:
(1) the total amount due from all States pursuant to 15 U.S.C.
3052(f)(1)(C)(i) shall be divided by the Projected Starts of all
Covered Horseraces; then
(2) 50 percent of the quotient calculated in (c)(1) is multiplied
by the quotient of
(i) the relevant State's percentage of the total amount of purses
for all covered horseraces as reported by Equibase (not including the
Breeders' Cup World Championships Races), after taking into
consideration alterations in
[[Page 67919]]
purses for the relevant State for the following calendar year; divided
by
(ii) the relevant State's percentage of the Projected Starts of all
covered horseraces starts; then
(3) the sum of (i) the product of the calculation in (c)(2) and 50
percent of the quotient calculated in (c)(1) is multiplied by the
Projected Starts in the applicable State. Provided however, that no
State's allocation shall exceed 10 percent of the total amount of
purses for covered horseraces as reported by Equibase in the State (not
including the Breeders' Cup World Championships Races). All amounts in
excess of the 10 percent maximum shall be allocated proportionally to
all States that do not exceed the maximum, based on each State's
respective percentage of the Annual Covered Racing Starts. (d) Pursuant
to 15 U.S.C. 3052(f)(2)(B), a State racing commission that elects to
remit fees shall remit fees on a monthly basis and each payment shall
equal one-twelfth of the estimated annual amount required from the
State for the following year. (e) If a State racing commission does not
elect to remit fees pursuant to 15 U.S.C. 3052(f)(2) or has remitted a
partial payment under Rule 8520(a):
(1) The Authority shall on a monthly basis calculate and notify
each Racetrack in the State of the applicable fee per racing start for
the next month based upon the following calculations:
(i) Calculate the amount due from the State as if the State had
elected to remit fees pursuant to 15 U.S.C. 3052(f)(2) (after taking
into account any partial payment under Rule 8520(a)) (the ``Annual
Calculation'').
(ii) Calculate the number of starts in covered horseraces in the
previous twelve months as reported by Equibase (the ``Total Starts'').
(iii) Calculate the number of starts in covered horseraces in the
previous month as reported by Equibase (the ``Monthly Starts'').
(iv) The applicable fee per racing start shall equal (i) the
quotient of Monthly Starts divided by Total Starts; (ii) multiplied by
the Annual Calculation.
(2) The Authority shall on a monthly basis calculate and notify
each Racetrack in the jurisdiction of the following calculations:
(i) Multiply the number of starts in Covered Horseraces in the
previous month by the applicable fee per racing start calculated
pursuant to paragraph (e)(1)(iv) above.
(ii) The calculation set forth in 15 U.S.C. 3052(f)(3)(A) shall be
equal to the amount calculated pursuant to paragraph (e)(2)(i) (the
``Assessment Calculation'').
(3) The Authority shall allocate the monthly Assessment Calculation
proportionally based on each Racetrack's proportionate share in the
total purses in covered horseraces in the State over the next month and
shall notify each Racetrack in the jurisdiction of the amount required
from the Racetrack. Each Racetrack shall pay its share of the
Assessment Calculation to the Authority within 30 days of the end of
the monthly period.
(4) Not later than December 10, 2022, and not later than December
10 each year thereafter, each Racetrack in the State shall submit to
the Authority its proposal for the allocation of the Assessment
Calculation among covered persons involved with covered horseraces (the
``Covered Persons Allocation''). On or before 30 days from the receipt
of the Covered Persons Allocation from the Racetrack, the Authority
shall determine whether the Covered Persons Allocation has been
allocated equitably in accordance with 15 U.S.C. 3052(f)(3)(B) and if
so, the Authority shall notify the Racetrack that the Covered Persons
Allocation is approved. If a Racetrack fails to submit its proposed
Covered Person Allocation in accordance with the deadlines set forth in
this paragraph, or if the Authority has not approved the Covered
Persons Allocation in accordance with this paragraph, the Authority
shall determine the Covered Persons Allocation for the Racetrack. Upon
the approval of or the determination by the Authority of the Covered
Persons Allocation, the Racetrack shall collect the Covered Person
Allocation from the covered persons involved with covered horseraces.
(f) Not later than March 1 of each year, the Authority shall
calculate the actual number of starts in Covered Horseraces as reported
by Equibase for the previous calendar year and the actual total amount
of purses for Covered Horseraces as reported by Equibase for the
previous calendar year and apply such amounts to the calculations set
forth in Rule 8520(c) instead of the projected amounts utilized in the
calculation of the estimated amount provided to the State racing
commission pursuant to Rule 8520(b) for the relevant calendar year (the
``True-Up Calculation''). The allocation due from each State in the
current year shall be equitably adjusted to account for any differences
between the estimated amount provided to the State racing commission
pursuant to Rule 8520(b) for the previous year and the True-Up
Calculation. Any State racing commission, horsemen's organization, or
Racetrack that believes that Equibase has not accurately reported the
correct number of starts in covered horseraces for the previous
calendar year or the total amount of purses for covered horseraces for
the previous calendar year shall notify the Authority by January 31 of
each year of the basis for objecting to the relevant Equibase numbers
for the applicable State or Racetrack. The Authority shall review the
information submitted and shall determine the actual number of starts
in Covered Horseraces for the previous calendar year and the actual
total amount of purses for Covered Horseraces for the previous calendar
year.
(g) In the event that any court of competent jurisdiction issues an
injunction that enjoins the enforcement of the Rule 8500 Series based
on the use of Projected Purse Starts in the Assessment Methodology
Rule, the applicable States, Racetracks, and Covered Persons, as the
case may be, shall pay the allocation due from each State pursuant to
15 U.S.C. 3052(f)(1)(C) and 15 U.S.C. 3052(f)(3)(A)-(C) proportionally
by the applicable State's respective percentage of Projected Starts
(the ``Alternative Calculation''). If such injunction is reversed by a
court of competent jurisdiction and such reversal is final and non-
appealable, the Authority shall adjust the allocation due from the
applicable States, Racetracks, and Covered Persons, as the case may be,
in the current calendar year to account for the overpayment or
underpayment created by the use of the Alternative Calculation made
during the time that the injunction was in force.
(h) All notices required to be given to the Authority pursuant to
the Act and these regulations shall be in writing and shall be mailed
to 401 West Main Street, Suite 222, Lexington, Kentucky 40507 and
emailed to <a href="/cdn-cgi/l/email-protection#b0dad9dd9ed7d1c4d5c3f0d8d9c3d1c5c39edfc2d7"><span class="__cf_email__" data-cfemail="83e9eaeeade4e2f7e6f0c3ebeaf0e2f6f0adecf1e4">[email protected]</span></a>.
By direction of the Commission.
April J. Tabor,
Secretary.
[FR Doc. 2022-24609 Filed 11-9-22; 8:45 am]
BILLING CODE 6750-01-P
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</html>Indexed from Federal Register on November 10, 2022.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.