Rule2024-02290
Procedures for Oversight of the Horseracing Integrity and Safety Authority's Annual Budget
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
February 8, 2024
Effective
February 8, 2024
Issuing agencies
Federal Trade Commission
Abstract
The Federal Trade Commission ("FTC" or "Commission") is amending its rules pursuant to the Horseracing Integrity and Safety Act ("Act") regarding the Commission's procedures for its oversight of the annual budget of the Horseracing Integrity and Safety Authority ("Authority"). The amendments to the Authority's budget oversight rules will streamline and improve the process for approving or disapproving the Authority's annual budget.
Full Text
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<title>Federal Register, Volume 89 Issue 27 (Thursday, February 8, 2024)</title>
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[Federal Register Volume 89, Number 27 (Thursday, February 8, 2024)]
[Rules and Regulations]
[Pages 8530-8533]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-02290]
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FEDERAL TRADE COMMISSION
16 CFR Part 1
RIN 3084-AB79
Procedures for Oversight of the Horseracing Integrity and Safety
Authority's Annual Budget
AGENCY: Federal Trade Commission.
ACTION: Final rule.
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SUMMARY: The Federal Trade Commission (``FTC'' or ``Commission'') is
amending its rules pursuant to the Horseracing Integrity and Safety Act
(``Act'') regarding the Commission's procedures for its oversight of
the annual budget of the Horseracing Integrity and Safety Authority
(``Authority''). The amendments to the Authority's budget oversight
rules will streamline and improve the process for approving or
disapproving the Authority's annual budget.
DATES: This rule is effective on February 8, 2024.
FOR FURTHER INFORMATION CONTACT: Sarah Botha, Attorney ((202-326-2036),
<a href="/cdn-cgi/l/email-protection#0f7c6d607b676e4f697b6c21686079"><span class="__cf_email__" data-cfemail="eb9889849f838aab8d9f88c58c849d">[email protected]</span></a>), Office of the Executive Director, Federal Trade
Commission.
SUPPLEMENTARY INFORMATION:
Background
The Horseracing Integrity and Safety Act of 2020, Public Law 116-
260, Title XII, 134 Stat 1182, 3252 (2020) (codified as amended at 15
U.S.C. 3051-3060), recognizes the Authority as a self-regulatory
nonprofit organization charged with developing and enforcing rules
relating to racetrack safety, anti-doping, and medication control. See
15 U.S.C. 3052. The Act expressly provides for Commission oversight of
several aspects of the Authority's operations. For example, the
Commission must approve any proposed rule or rule modification by the
Authority relating to the Authority's bylaws, racetrack safety
standards, anti-doping and medication control, and the formula or
methodology for determining assessments. See id. In December 2022,
Congress amended HISA to expand the Commission's oversight role over
the Authority. See Consolidated Appropriations Act, 2023, Public Law
117-328, Sec. 701, 136 Stat. 4459, 5231 (2022). As amended, the Act
gives the Commission the power to issue rules under the procedures set
forth in the Administrative Procedure Act, 5 U.S.C. 553, ``as the
Commission finds necessary or appropriate to ensure the fair
administration of the Authority . . . or otherwise in furtherance of
the purposes of this Act.'' 15 U.S.C. 3053(e).
In March 2023, relying in part on the new amendment, the Commission
promulgated rules relating to the Authority's budget (``Budget Rule'').
See 88 FR 18034 (Mar. 27, 2023). The Budget Rule, codified at 16 CFR
1.150 through 1.152, sets forth the process whereby the Authority
submits each year's proposed budget to the Commission for approval.
Under the Budget Rule, after the Authority submits its proposed annual
budget to the Commission, the Commission publishes the proposed budget
in the Federal Register and the public is given an opportunity to
comment. See 16 CFR
[[Page 8531]]
1.150(d). After the close of the comment period, and after
consideration of any comments received, the Commission either approves
or disapproves the proposed budget, using the criteria set forth in 16
CFR 1.151(c).
In June 2023, after the Commission promulgated the Budget Rule, the
Authority submitted its proposed 2023 budget to the Commission, and the
Commission published the proposed budget in the Federal Register. See
88 FR 68610 (Oct. 4, 2023). After considering the Authority's budget
submission and the public comments received, the Commission approved
the Authority's 2023 budget on December 5, 2023.\1\ In September 2023,
the Authority submitted its proposed 2024 budget to the Commission, and
the Commission published the proposed budget in the Federal Register.
See 88 FR 77582 (Nov. 13, 2023). The Commission reviewed the
Authority's budget submission and the public comments and approved the
Authority's 2024 budget on January 5, 2024.\2\
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\1\ FTC, Order Approving the Budget for 2023 Proposed by the
Horseracing Integrity and Safety Authority (Dec. 5, 2023), available
at <a href="https://www.ftc.gov/system/files/ftc_gov/pdf/P222100CommissionOrderApprovingHISA2023Budget.pdf">https://www.ftc.gov/system/files/ftc_gov/pdf/P222100CommissionOrderApprovingHISA2023Budget.pdf</a>.
\2\ FTC, Order Approving the Budget for 2024 Proposed by the
Horseracing Integrity and Safety Authority (Jan. 5, 2024), available
at <a href="https://www.ftc.gov/system/files/ftc_gov/pdf/P222100CommissionOrder2024HISABudget.pdf">https://www.ftc.gov/system/files/ftc_gov/pdf/P222100CommissionOrder2024HISABudget.pdf</a>.
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Based on comments received in response to the publication of the
2023 and 2024 budgets, and in light of Commission experience in
reviewing the two budgets, the Commission is revising the Budget Rule,
16 CFR 1.150 through 1.152. The revisions to the Rule streamline the
budget approval process by, among other things, providing for the
immediate publication of the Authority's proposed budget in the Federal
Register so long as certain procedural requirements are met. The
amendments to the budget approval process still allow for meaningful
public comment, and the Commission will still need to closely review
the Authority's finances. Commission approval of the budget will happen
only after the Commission is satisfied that the budget is consistent
with and serves the goals of the Act in a prudent and cost-effective
manner.
Finally, the Commission is modifying Sec. 1.143, the section
setting forth the formatting requirements for the Authority's
submissions to the Commission, to account for the submissions mandated
by Sec. Sec. 1.150 through 1.152.
Section by Section Analysis
Sec. 1.143 Submissions to the Secretary. Section 1.143 currently
sets forth the procedures whereby the Authority submits guidance,
proposed rate increases, and proposed rules or rule modifications to
the Commission. The Commission is modifying this section to account for
the Authority's submissions required by the Budget Rule.
Sec. 1.150 Submission of the Authority's proposed budget.
Modifications to paragraph (a) change the budget submission date from
September 1 to August 1 to give the FTC additional time to review the
Authority's proposed budget. Changes to paragraph (b) clarify that the
Authority does not have to post public comments to its website upon
their arrival, but must still post comments on its website. Also, the
Commission is moving from paragraph (b) to paragraph (c) the
requirement that the Authority forward to the FTC any public comments
received by the Authority and the Authority's response to them. The
changes to paragraph (d) delegate to the Secretary the authority to
publish the proposed budget in the Federal Register without a
Commission vote. The Commission will still vote to approve or
disapprove the budget after the public comment period has ended and the
Commission has reviewed the comments submitted. The Commission also
clarifies that while the proposed budget will still be published in the
Federal Register, supporting materials will be made available to the
public on <a href="http://regulations.gov">regulations.gov</a>.
Sec. 1.151 Commission's decision on the Authority's proposed
budget. Modifications to this section clarify that the Commission may
require the Authority to submit additional information before the
Commission approves or disapproves the proposed budget, and that the
Commission will vote on the Authority's proposed budget no later than
November 1, or as soon as practicable thereafter. Changes also remove
the ``commercially reasonable terms'' element from the Commission's
decision criteria. In lieu of this criterion, the FTC today proposes
new provisions addressing oversight of the Authority's operations,
which would include more specific vendor selection and competition
requirements.\3\
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\3\ Horseracing Integrity and Safety Authority Oversight, Notice
of Proposed Rulemaking, published elsewhere in this issue of the
Federal Register.
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Sec. 1.152 Deviation from approved budget. An edit in paragraph
(a) clarifies that the Authority may deviate from the approved budget's
expenditure information in a year as to any line item by up to 10
percent in a year without notifying the Commission. Edits in paragraphs
(b) and (c) change the deadlines from 7 business days to 14 business
days for the Commission to issue any decision to disapprove a proposed
repurposing of funds to cover a line-item deviation of more than 10
percent and for the Commission to issue any decision to disapprove a
proposed means of covering a difference in the total approved
expenditure.
Because these rules relate solely to agency procedure and practice,
publication for notice and comment is not required under the
Administrative Procedure Act. 5 U.S.C. 553(b).\4\
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\4\ For this reason, the requirements of the Regulatory
Flexibility Act, 5 U.S.C. 601(2), 604(a), are also inapplicable.
Likewise, the amendments do not modify any FTC collections of
information within the meaning of the Paperwork Reduction Act, 44
U.S.C. 3501 through 3521.
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List of Subjects in 16 CFR Part 1
Administrative practice and procedure; Animal drugs; Animal
welfare.
For the reasons set forth in the preamble, the Federal Trade
Commission amends part 1, title 16, chapter I, subchapter A of the Code
of Federal Regulations as follows:
PART 1--GENERAL PROCEDURES
0
1. The authority citation for part 1 continues to read as follows:
Authority: 15 U.S.C. 46; 15 U.S.C. 57a; 5 U.S.C. 552; 5 U.S.C.
601 note.
0
2. Amend Sec. 1.143 by revising paragraph (a), paragraph (b) paragraph
heading, (b)(1), (e), and (f) of to read as follows:
Sec. 1.143 Submissions to the Secretary.
(a) Electronic submission. All submissions from the Authority to
the Commission pursuant to the provisions of subpart S or U of this
part, and all submissions to the Commission pursuant to 15 U.S.C.
3053(a) (proposed rules or rule modifications), 15 U.S.C.
3052(f)(1)(C)(iv) (proposed rate increases), or 15 U.S.C. 3054(g)(2)
(guidance) must be emailed to the Secretary of the Commission at
<a href="/cdn-cgi/l/email-protection#bcd9d0d9dfc8ced3d2d5dfdad5d0d5d2dbcffcdac8df92dbd3ca"><span class="__cf_email__" data-cfemail="adc8c1c8ced9dfc2c3c4cecbc4c1c4c3cadeedcbd9ce83cac2db">[email protected]</span></a>. The subject line of the email must begin
with ``HISA Submission:'' followed by a brief description of the
submission.
(b) Format for submissions--(1) Electronic format. All documents
submitted to the Secretary under this section must be submitted in .pdf
format or in some other electronic format specified by the Office of
the Secretary.
[[Page 8532]]
The proposed text of Federal Register publications must also be
submitted in a Microsoft Word or .rtf format.
* * * * *
(e) Authority to reject documents for filing. The Secretary of the
Commission may reject a document for filing that fails to comply with
the Commission's rules.
(f) Federal Register publication. For submissions required to be
published in the Federal Register, if the conditions set forth in this
section and Sec. 1.142 have been satisfied, the Commission will
publish the Authority's submission in the Federal Register.
0
3. Revise subpart U to read as follows:
Subpart U--Procedures for Oversight of the Horseracing Integrity
and Safety Authority's Annual Budget
Sec.
1.150 Submission of the Authority's proposed budget
1.151 Commission decision on the Authority's proposed budget
1.152 Deviation from approved budget
Authority: 15 U.S.C. 3053(e).
Sec. 1.150 Submission of the Authority's proposed budget submissions.
(a) Mandatory annual submission. The Authority must submit a
proposed annual budget to the Commission every year, irrespective of
whether there is a ``proposed increase in the amount required'' under
15 U.S.C. 3052(f)(1)(C)(iv). The submission of the proposed budget for
the following year must be made by August 1 of the current year,
following the procedures set forth in Sec. 1.143. The Authority's
annual budget will use the calendar year as its fiscal year.
(b) Consideration of public comments. Before submitting its
proposed budget to the Commission in August, the Authority must post
the proposed budget on its website as early as practicable, with an
invitation to the public to submit comments to the Authority on any
aspect of the proposed budget. The Authority must post any pertinent
comments it receives on its website, and it must review them to
ascertain whether to revise the proposed budget in light of them.
(c) Contents of submission. The Authority's proposed budget
submission to the Commission must include the following:
(1) Indication of Board vote. The Authority's proposed budget must
be approved by a majority of its Board of Directors, or, in the case of
a budget that exceeds the preceding year's budget by 5 percent or more,
a two-thirds supermajority. The Authority's submission to the
Commission must state the Board vote on the motion to approve the
budget.
(2) Revenue information. The proposed budget must identify both the
estimated amount required from each State racing commission as
calculated under 15 U.S.C. 3052(f) and all other sources of Authority
revenue as well as any loans proposed to be obtained by the Authority.
(3) Expenditure information. The proposed budget must identify
expenditures separately for:
(i) The racetrack safety program;
(ii) The anti-doping and medication control program;
(iii) All other programmatic expenditures other than for racetrack
safety and anti-doping and medication control, such as the
administration of the Authority or its technological needs;
(iv) Repayment of any loans; and
(v) Any funding shortfall incurred.
(4) Line items. For both revenue and expenditure information, the
Authority's proposed budget must provide sufficient information, by
line item, as would be required for members of the Authority's Board of
Directors to exercise their fiduciary duty of care. For example, the
proposed budget's expenditure information for anti-doping and
medication control might include separate line items for in-house
salaries, the costs of testing of laboratory samples, the costs of
arbitrators, and all the costs associated with contracting with an
anti-doping and medication control enforcement agency. The proposed
budget must include a narrative component that provides a brief
explanation of each line item's utility in carrying out the purposes of
the Horseracing Integrity and Safety Act.
(5) Comparison of approved budget to actual revenues and
expenditures. For each approved line item, the proposed budget must
provide a comparison showing the actual revenues and expenditures for
the current year along with a narrative component explaining why any
line item is anticipated to deviate by 10 percent or more during the
current year.
(6) Public comments received and the Authority's response. The
Authority must include with its submission all of the public comments
that it received after posting the proposed budget on its website. The
Authority must also provide an assessment of public comments relevant
to the Commission's evaluation of the proposed budget. The Authority
must also identify any changes made to the proposed budget in response
to the comments received.
(d) Publication of the proposed budget in the Federal Register. If
the Secretary concludes that the Authority's submission complies with
Sec. 1.150(c), then the Secretary will publish the Authority's
proposed budget in the Federal Register with supporting materials
available on <a href="http://regulations.gov">regulations.gov</a>. Members of the public will have 14 days
after the date of publication in which to file comments on the proposed
budget. Public comments should provide commenters' views as to the
decisional criteria set forth in Sec. 1.151(c) and whether any line
items should be modified.
Sec. 1.151 Commission decision on the Authority's proposed budget.
(a) Commission approval required. The Authority's proposed budget
takes effect only if approved by the Commission. The Commission will
approve or disapprove the proposed budget after considering the public
comments filed and the Commission's internal review of the Authority's
submissions pursuant to Sec. 1.150. The Commission may, in its
discretion, require the Authority to submit additional information to
the Commission before the Commission approves or disapproves the
proposed budget. The Commission will vote on the Authority's proposed
budget no later than November 1, or as soon thereafter as practicable.
(b) Conditional collection of fees allowed. The notice required to
be sent to State racing commissions estimating the amount required from
each State for the subsequent year must state that the amount required
is based on the proposed annual budget, as approved by the Board of
Directors, which takes effect only if approved by the Commission. State
racing commissions (or covered persons in States that do not elect to
remit fees) may nevertheless elect to remit fees, and the Authority may
conditionally collect them, even before the Commission approves the
proposed budget. If the Commission makes any modifications to line
items under paragraph (d) of this section that have the net effect of
reducing the budget, the Authority must, within 30 days, refund the
proportionate amount owed to any State racing commission or covered
person that has conditionally paid. If the Commission makes any
modifications to line items under paragraph (d) of this section that
have the net effect of increasing the budget, the Authority may obtain
loans to make up the difference or may account for the difference as a
funding shortfall incurred in the subsequent year's proposed budget.
(c) Decisional criteria. The Commission will approve the proposed
[[Page 8533]]
budget if the Commission determines that, on balance, the proposed
budget is consistent with and serves the goals of the Horseracing
Integrity and Safety Act in a prudent and cost-effective manner and
that its anticipated revenues are sufficient to meet its anticipated
expenditures.
(d) Modification of line items. In its decision on the proposed
budget, the Commission may modify the amount of any line item.
Sec. 1.152 Deviation from approved budget.
(a) When notice to the Commission is required. As to any line item,
the Authority may deviate from the approved budget's expenditure
information in a year by up to 10 percent in a year without providing
prior notification to the Commission. If the Authority determines that
it is likely to expend more than the approved expenditure for any line
item by 10 percent or more, or if it will exceed its approved total
expenditure by any amount, it must notify the Commission immediately
upon such a determination.
(b) Line-item deviations of more than 10 percent. If the Authority
determines that it is likely to expend more than the approved
expenditure for any line item by 10 percent or more, its notice to the
Commission must indicate whether it intends to repurpose funds from one
or more different line items to cover the increased expenditure. The
Commission retains the discretion to disapprove such a proposed
repurposing. The Commission must issue any decision to disapprove a
proposed repurposing within 14 business days of receiving notice of the
Authority's proposal to repurpose funds from another line item. If the
Commission takes no action, the Authority's proposal takes effect as an
amendment to its approved budget.
(c) Total expenditure deviation. If the Authority determines that
it is likely to expend more than the total approved expenditure, its
notice to the Commission must indicate by what means it proposes to
cover the difference. The Commission retains the discretion to
disapprove the proposed means of covering the difference. The
Commission must issue any decision to disapprove a proposed means of
covering the difference within 14 business days of receiving notice of
the Authority's proposal to cover the difference. If the Commission
takes no action, the Authority's proposal takes effect as an amendment
to its approved budget.
By direction of the Commission,
Joel Christie,
Acting Secretary.
[FR Doc. 2024-02290 Filed 2-7-24; 8:45 am]
BILLING CODE 6750-01-P
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