[Federal Register Volume 87, Number 142 (Tuesday, July 26, 2022)]
[Notices]
[Pages 44393-44404]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-15972]


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FEDERAL TRADE COMMISSION

[File No. P222100]


HISA Enforcement 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 Enforcement on June 5, 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 September 26, 2022. Comments must be 
received on or before August 9, 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 Enforcement Rule 
Modification'' on your comment and file your comment online at https://www.regulations.gov under docket number FTC-2022-0044. 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

[[Page 44394]]

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 
June 5, 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), https://www.federalregister.gov/documents/2021/10/05/2021-21306/procedures-for-submission-of-rules-under-the-horseracing-integrity-and-safety-act.
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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 racetrack safety standards are 
established in the Rule 2000 Series, the ``Racetrack Safety Program,'' 
filed by the Authority with the Commission on December 6, 2021. The 
Rule 2000 Series was published in the Federal Register on January 5, 
2022 \6\ and subsequently approved by the Commission by Order dated 
March 3, 2022.\7\ On December 20, 2021, the Authority filed with the 
Commission the Rule 8000 Series, which establish penalties and 
adjudicatory procedures for the enforcement of rules promulgated by the 
Authority. The Rule 8000 Series was published in the Federal Register 
January 26, 2022 \8\ and approved by the Commission by Order dated 
March 25, 2022.\9\
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    \6\ See Fed. Trade Comm'n, Notice of HISA Racetrack Safety 
Proposed Rule (``Notice''), 87 FR 435 (Jan. 5, 2022), https://www.federalregister.gov/documents/2022/01/05/2021-28513/hisa-racetrack-safety.
    \7\ See Fed. Trade Comm'n, Order Approving the Racetrack Safety 
Rule Proposed by the Horseracing Integrity & Safety Auth. at 1, 
__F.T.C.__ (Mar. 3, 2022), https://www.ftc.gov/system/files/ftc_gov/pdf/order_re_racetrack_safety_2022-3-3_for_publication.pdf.
    \8\ See Fed. Trade Comm'n, HISA Enforcement Rule, 87 FR 4,023, 
4,028 (Jan. 26, 2022), https://www.federalregister.gov/documents/2022/01/26/2022-01663/hisa-enforcement-rule.
    \9\ See Fed. Trade Comm'n, Order Approving the Enforcement Rule 
Proposed by the Horseracing Integrity & Safety Auth., at 1, 
__F.T.C.__ (Mar. 25, 2022) (``Enforcement Rule Order''), https://perma.cc/H9SJ-F9WA.
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    In its Order, the Commission directed the Authority to file 
modifications to three provisions in the Rule Series 8000, stating as 
follows: ``The Commission directs the Authority (1) to not impose the 
proposed sanction in Rule 8200(b)(6) on a covered person until such 
time as the Authority has proposed, and the Commission has approved, a 
rule modification that is more narrowly tailored; (2) to file with the 
Commission, by July 1, 2022, a supplemental proposed rule modification 
explicitly stating guidelines for confidentiality and public reporting 
at the different stages of the processes outlined in the Enforcement 
rule; and (3) to file with the Commission, by July 1, 2022, a 
supplemental proposed rule modification in which the Authority further 
defines the meaning of `object' and `device' within proposed Rule 
8400(a)(2)'s list of items eligible for seizure and provides a process 
for the return of seized property if no violation is found.'' \10\
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    \10\ Id. at 35-36.
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    The Authority therefore proposes the rule changes described in this 
Notice in order to fulfill the Commission's directives. In addition, 
the Authority on its own initiative proposes to amend the Rule 8000 
Series and to supplement it with additional provisions. Some of these 
amendments and supplements have been prompted by comments and 
suggestions received from interested members of the horseracing 
industry since the rules were filed on December 20, 2021.
    The violations, adjudications, and search procedures in the Rule 
8000 Series are tailored to the unique aspects of horseracing in that 
violations of the rules of horseracing do arise in the sport and must 
be penalized. Violations must be effectively penalized to deter future 
violations and to ensure that horseracing is conducted in a fair and 
transparent manner that ensures public confidence in the integrity of 
the sport. Various specific violations are established in Rule 8100, 
and the schedule of sanctions set forth in Rule 8200 provides the 
specific penalties that are the consequence of committing a rule 
violation. The schedule is tailored to the unique aspects of 
horseracing in that it imposes revocations, suspensions, substantial 
fines, exclusions from racetrack grounds, and other penalties that are 
commonly imposed upon licensed participants in horseracing.
    Before a penalty is imposed, persons alleged to have committed 
violations are entitled to a fair hearing at which they are afforded an 
opportunity to present evidence in defense of a charged violation. 
While a full process hearing is available on appeal of cases to the 
Commission pursuant to 15 U.S.C. 3058(b), hearing processes are also 
necessary before various bodies of the Authority to make sure that any 
penalties imposed upon Covered Persons are adjudicated carefully and 
fairly. This ensures that violations are consistently and fairly 
penalized. The provisions set forth in Rule 8300 establish the rules 
and parameters of the various hearing processes. These provisions also 
provide for appeals to the Board of the Authority to review any 
decisions rendered against a Covered Person who is charged with a 
violation. The various hearing procedures are keyed to the unique 
organizational structure of the Authority. Rules 8200(d) and 8360 also 
establish procedures for notices of violations and hearings to 
adjudicate the denial, suspension, or revocation of racetrack 
accreditation in those instances in which racetracks are alleged to 
have committed violations of the Racetrack Safety rules. Racetrack 
safety is of course unique to horseracing and is essential to ensure 
that horseracing is conducted safely and in a fair and transparent 
manner.
    The successful prosecution of violations requires the investigation 
of all the circumstances surrounding an alleged violation. Central to 
any investigation is the power to gain access to the books, records, 
and certain premises of persons believed to have committed a violation; 
to subpoena witnesses; and to take testimony under

[[Page 44395]]

oath of any person with knowledge of the circumstances regarding a 
violation. Rule 8400 specifically confers these powers upon the 
Authority and penalizes any obstruction or failure to comply with the 
investigatory powers set forth in the section.
    The proposed rule modification is described in detail in Item II of 
this Notice. Various rules pertaining to horseracing and equestrian 
sports that were consulted in the development of this proposed rule 
modification are available as Exhibit A at the docket at https://www.regulations.gov. In conformity with 15 U.S.C. 3057(d)(2) of the 
Act, the various modifications described take into account the unique 
aspects of horseracing, are designed to ensure fair and transparent 
horseraces, and will serve to deter safety and performance violations. 
Anti-doping and medication control rule violations will be established 
in detail in proposed rules to be filed later this year.
    On May 13, 2022, HISA representatives shared a draft of the 
proposed rule modification with a number of 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; Grants Pass Downs; 
Arizona Downs; Colonial Downs; Thoroughbred Owners of California; 
California Horse Racing Board; National Horsemen's Benevolent and 
Protective Association; Thoroughbred Horsemen's Association Mid-
Atlantic Safety Coalition; Thoroughbred Owners and Breeders 
Association; Kentucky Thoroughbred Association; American Association of 
Equine Practitioners; American Veterinary Medical Association; Delaware 
Racing Commission; New York Racing Association, Stronach Racing Group 
(5 thoroughbred racetracks); Churchill Downs (6 thoroughbred 
racetracks); Keeneland; and Del Mar. On May 13, 2022, the rule 
modification proposal was made available to the public for review and 
comment on the HISA website at https://www.hisausregs.org. Several 
comments were received from various stakeholders, which are outlined in 
Item III of this Notice. Available at the docket on https://www.regulations.gov as Exhibit B are copies of all pre-submission 
comments received concerning the proposed rule modification.
    With the review, input, and ultimate approval of the Authority's 
Board of Directors, the proposed rule modification to the Rule 8000 
Series modifies and enhances the penalties and adjudication procedures 
for the enforcement of rules 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 8200(b)(6), as originally filed with the Commission on 
December 20, 2021, established a penalty that operated to ``bar a 
Covered Person from associating with all Covered Persons concerning any 
matter under the jurisdiction of the Commission and the Authority 
during the period of a suspension.'' The Commission directed the 
Authority to ``not impose this sanction on a covered person until such 
time as the Authority has proposed, and the Commission has approved, a 
rule modification that is more narrowly tailored.'' \11\ In response to 
this directive, the Authority considered alternative sanctions 
currently in place in various state racing jurisdictions. The Authority 
now proposes to replace the penalty language quoted above with a 
different sanction in Rule 8200(b)(6), which will authorize the 
Authority to ``deny a Covered Person or a Covered Horse access to any 
location under the jurisdiction of the Authority during the period of a 
suspension.'' With this revision, Rule 8200(b)(6) will no longer place 
broad restraints upon a Covered Person's association with other Covered 
Persons but instead will prohibit a Covered Person from entering upon 
grounds under the jurisdiction of the Authority. The provision will 
accomplish the same basic end, which is to restrict Covered Persons 
from direct involvement with racing activities on grounds under the 
jurisdiction of the Authority during the period of a suspension. The 
restriction makes the suspension meaningful and deters future 
violations, thus furthering the goal of ensuring fair and transparent 
horseraces in a manner consistent with 15 U.S.C. 3057(d). By operating 
to exclude a Covered Person from horseracing grounds, the provision is 
tailored to the unique aspects of horseracing and is similar to 
provisions in the regulations of Kentucky and Minnesota, as well as the 
Model Rules of the Association of Racing Commissioners International 
(``ARCI'').
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    \11\ Id. at 15.
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    In its Order, the Commission also directed the Authority ``to file 
with the Commission by July 1, 2022 a supplemental proposed rule 
modification explicitly stating guidelines for confidentiality and 
public reporting at the different stages of the processes outlined in 
the Enforcement rule.'' \12\ The Authority proposes to amend the Rule 
Series 8000 to include a new Rule 8380, entitled ``Guidelines for 
Confidentiality and Public Reporting.'' The rule draws upon a similar 
provision in the rules of the International Equestrian Federation 
(``FEI'') that governs public disclosure and confidentiality in the 
realm of equestrian sports.\13\ Provisions of this kind in horseracing 
regulations are typically spare and lacking in detail, but the FEI 
Rules provide a sound framework for the development of the Authority's 
proposed rule.
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    \12\ Id. at 29.
    \13\ See FEI Equine Anti-Doping and Controlled Medication 
Regulations, Article 13.
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    The rule serves the interest of providing greater transparency to 
the public concerning the adjudication of rule violations. In many 
cases involving the violation of medication rules in particular, little 
is known by the public of the details of an alleged violation beyond 
rumor and speculation. This is because, in many racing jurisdictions, 
regulators--particularly at the initial level of adjudication before 
the state stewards--are prohibited from disclosing information 
concerning the alleged violation. The proposed Rule 8380 will loosen 
these restrictions and require the Authority to disclose basic facts 
about the alleged violation, including ``(1) the identity of the 
Covered Person who is the subject of the alleged violation, (2) the 
identity of any applicable Covered Horse, and (3) the rule violated 
and, where appropriate, the basis of the asserted violation.'' The rule 
also permits the Authority to comment on any information disclosed by 
the Covered Person charged with the alleged violation. In some 
instances, persons charged have made public statements concerning 
contested facts, and regulators should have the ability to respond to 
inaccurate comments if they cast unfounded doubt upon the legitimacy of 
the disciplinary process or of horseracing in general.
    In addition, Rule 8380 also contains provisions that permit the 
Authority to refrain from any public disclosure in situations that 
would compromise an

[[Page 44396]]

ongoing investigation or in circumstances in which the Covered Person 
charged with a violation is a minor. Conversely, the Authority is 
permitted in the interest of public safety to make any disclosure that 
concerns a violation or circumstance that poses a serious and imminent 
risk of harm to Covered Persons, Covered Horses, or the public. Rule 
8380 further provides for the disclosure of detailed information within 
20 days of the imposition of a sanction, the resolution of a matter 
between the parties, or the dismissal of the action.
    By providing the public with information concerning alleged 
violations, the public disclosure rule works toward the goal of 
ensuring fair and transparent horseraces in a manner consistent with 15 
U.S.C. 3057(d). It takes into account the unique aspects of the 
adjudication of alleged violations of the rules of horseracing, and by 
strengthening the system of adjudication it helps to deter future 
violations while at the same time enhancing public confidence in the 
sport.
    In its Order, the Commission directed the Authority ``to submit to 
the Commission a supplemental proposed rule modification by July 1, 
2022, in which the Authority further defines the meaning of `object' 
and `device' within proposed Rule 8400(a)(2)'s list of items eligible 
for seizure (`medication, drug, substance, paraphernalia, object, or 
device') and that provides a process for the return of seized property 
if no violation is found.'' \14\
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    \14\ Enforcement Rule Order at 34-35.
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    It is difficult to define ``object'' or ``device'' with precision, 
and other racing rules consulted by the Authority do not provide 
definitions for these or similar terms in a seizure context. 
Nevertheless, the proposed modification amends the language of the Rule 
as originally filed to specify that the Authority may seize ``any 
object or device reasonably believed to have been used in furtherance 
of the violation or suspected violation.'' Objects that might be used 
in furtherance of prohibited activity include intravenous tubing, oral 
dosing syringes, needles, nasal gastric tubes, various types of 
container bags and vials, and many other items. The language is broad 
enough to include devices such as computers and phones if there is 
reason to believe that these devices have been used in furtherance of a 
violation. In doping and medication-violation cases in particular, it 
is often found that information concerning medications and drugs 
administered to horses are stored on computers and phones. Rather than 
try to construct definitions of ``object'' or ``device'' that will 
likely be vague and fail to include certain items while including 
others in an overly expansive manner, the Authority has proposed 
language that closely ties the terms ``object'' and ``device'' to the 
violation being investigated; seizure is justified only if the object 
or device is reasonably believed to have been used in furtherance of 
the violation or suspected violation.
    Additionally, and pursuant to the directive of the Commission, the 
proposed rule modification includes a new provision in Rule 8400(a)(3) 
that requires the Authority to return seized property upon the final 
resolution of a violation, so long as the possession of the property is 
not specifically prohibited by the Act or the rules of the Authority. 
Many racing jurisdictions return property as a matter of course, though 
not specifically required to do so; the Authority's rule requires 
property to be returned unless specifically prohibited.
    The changes to the language referencing the words ``object'' and 
``device,'' as directed by the Commission, take into account the unique 
aspects of horseracing violation investigations, especially the 
necessities of seizure in medication-violation cases. By providing 
effective measures to seize evidence, the modification enhances the 
investigation and successful adjudication of violations, thus deterring 
future violations in a manner consistent with 15 U.S.C. 3057(d). An 
effective enforcement system builds public confidence in the sport by 
ensuring that horseracing is conducted in a fair and transparent 
manner. The return policy is adopted as a matter of fairness to Covered 
Persons whose property has been seized; property that is not 
specifically prohibited under the Authority's rules shall be returned 
upon the final resolution of a violation.
    In addition to the amendments directed by the Commission, the 
Authority has also proposed several modifications on its own 
initiative. And, in some instances, rule changes have been prompted in 
response to comments previously received during the formal comment 
period after the filing of the Rule 8000 Series with the Commission on 
December 20, 2021.
    Rule 8400(a)(2) gives the Authority the power to ``seize any 
medication, drug, substance, paraphernalia, object, or device in 
violation or suspected violation of any provision of 15 U.S.C. Chapter 
57A or the regulations of the Authority.'' As noted in the Commission's 
Order, some commenters to the Rule 8000 Series expressed concerns that 
the seizure provisions were overbroad, though the referenced language 
in the Rule 8000 Series as originally filed was approved by the 
Commission.\15\ The language of the rule tracked the statutory language 
at 15 U.S.C. 3054(c)(1), which states in pertinent part that the 
Authority ``shall develop uniform procedures and rules authorizing--(i) 
access to offices, racetrack facilities, other places of business, 
books, records, and personal property of covered persons that are used 
in the care, treatment, training, and racing of covered horses.'' It 
should also be noted that statutes in other state racing jurisdictions 
are similarly broad (such as Kentucky). The Commission addressed this 
matter in detail in the Order approving the Enforcement rules, noting 
that the commenters' objections are really with the Act itself.\16\ 
Nevertheless, to allay the concerns expressed, the Authority has filed 
a proposed rule modification that restricts the scope of Rule 
8400(1)(a). Specifically, the new language authorizes the Commission, 
the Authority, or their designees to have free access to books, 
records, offices, racetrack facilities, and other places of business of 
both Covered Persons and any person who owns a Covered Horse or 
performs services on a Covered Horse, but the language requires that 
the items and locations subject to access must relate to the care, 
treatment, training, and racing of Covered Horses. This provision is 
included to clarify that items and locations unrelated to horseracing 
may not be accessed by the Authority.
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    \15\ See id. at 30-35.
    \16\ See id. at 34.
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    Rule 8100(g) is modified to include as a violation the ``failure of 
a Responsible Person to register a Covered Horse.'' After the Rule 8000 
Series was filed on December 20, 2021, the Authority developed and 
filed, on April 25, 2022, the Rule 9000 Series, ``Registration of 
Covered Persons and Covered Horses.'' The Commission approved the 
Registration rule by Order dated June 29, 2022.\17\ Rule 9000(i) 
requires Responsible Persons to ensure that Covered Horses are 
registered with the Authority. A penalty is therefore added to Rule 
8100(g) to authorize the imposition of sanctions for failure to do so.
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    \17\ See Fed. Trade Comm'n, Order Approving Registration Rule 
Proposed by Horseracing Integrity & Safety Auth., at 1 (June 29, 
2022), https://www.ftc.gov/system/files/ftc_gov/pdf/P222100CommissionOrderRegistrationRuleFinal.pdf.
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    In Rule 8200(b), ``Imposition of Sanctions,'' the Authority 
proposes to

[[Page 44397]]

modify this provision to specify that any penalties imposed under that 
Rule shall be ``in proportion to the nature, chronicity, and severity 
of the violation.'' This language provides a rubric or standard to 
guide discretion in the imposition of penalties. In the same paragraph, 
a scrivener's error is corrected to refer to the Rule 8000 Series to 
make clear that sanctions are imposed after hearings conducted under 
the rules of both the Rule 7000 and 8000 Series. Additionally, the 
Authority proposes to modify Rule 8200(b)(2)(ii) concerning the fines 
that may be imposed for second violations of Authority rules. Under the 
Rule as originally filed, the fine was established at $50,000.00 to 
$100,000.00; the Rule will be modified to state that a fine may be 
imposed in an amount ``up to $100,000.00.'' This modification will give 
the Authority greater flexibility in assessing a fine in proportion to 
the nature, chronicity, and severity of the violation.
    Rule 8200(d) is amended to recognize that ``one or more stewards'' 
may issue a Notice of Suspected or Actual Violation, in addition to the 
Authority and the Racetrack Safety Committee. In addition, the 
Authority proposes to amend Rule 8200(d)(iii) to permit the Authority 
to consider ``any other relevant factor'' in establishing the time 
period allowed for a Covered Person to respond to a Notice of Suspected 
or Actual Violation. This catch-all provision is added to allow 
consideration of all relevant factors pertaining to the response time, 
in addition to the seriousness of the violation and the imminence of 
risk to Covered Persons, Covered Horses, Covered Horseraces or the 
public.
    The Authority is proposing modifications to several provisions in 
Rule 8300 to elaborate upon the procedures to be followed by track-
level stewards in adjudicating penalties. The provisions to be amended 
are Rule 8320(a), Rule 8320(b)(3), and Rule 8330(c), and the language 
of the amendment is similar in each rule. The amendment states more 
explicitly than the original language in the rules that the stewards 
shall adjudicate all alleged violations of Rules 2271(b) or 2272 
relating to the use of Shock Wave Therapy, violations of Rule 2280 
relating to the use of the riding crop, and violations of Rule 2273 
relating to the use of other electrical or mechanical devices. The 
amendment also makes clear that the stewards shall utilize the hearing 
procedures of the state jurisdiction in which a violation is alleged to 
have occurred.
    The amendment further addresses the broader issue of whether a 
state racing commission has entered into an agreement under which the 
state stewards serve in an adjudicatory capacity under the Rule 8000 
Series and enforce the Rule 2200 Series. In those states in which the 
state racing commission has not entered into an agreement with the 
Authority, the amendment provides that stewards appointed by the 
Authority to enforce the Rule 2200 Series shall adjudicate these cases. 
Since the burden of enforcing these rules will not be heavy in many 
jurisdictions, only one steward may be necessary to adjudicate 
violations under the Rule 2200 Series. If this is the case in a 
particular jurisdiction, the amendment makes clear that one steward may 
adjudicate these violations regardless of whether the state 
jurisdiction's rules require two or three stewards to rule on 
violations. In addition, the amendment to Rule 8320(a) further provides 
that all testimony at a stewards' hearing shall be given under oath, 
and a record of the hearing shall be kept by use of an audio recorder, 
video recording, or court reporter's transcript. While this is already 
routinely done in many jurisdictions, the new language makes the 
requirement explicit.
    The Authority proposes to amend Rule 8320(b)(1) and Rule 8330(a) in 
an identical manner to specify that when a case is referred to the 
National Stewards Panel by the Racetrack Safety Committee or the Board, 
``one or more members'' of the Panel may be designated to adjudicate 
the case. This amendment is included to bring Rule 8330 in conformity 
with Rules 3000 and 7000 Series, which will establish and set forth the 
procedures applicable to the National Stewards Panel. These rules are 
under development and will be filed with the Commission prior to 
January 1, 2023.
    Several amendments are proposed to modify Rule 8340, ``Initial 
Hearings Conducted Before the Racetrack Safety Committee or the Board 
of the Authority.'' Rule 8340(3) as previously filed states that 
``[a]ll testimony in proceedings before the Board or the Racetrack 
Safety Committee shall be given under oath;'' that paragraph is amended 
to further state that ``a record of the proceedings shall be kept in 
stenographic or recorded form.'' Rule 8340(h) is amended to make clear 
that a party to initial hearings before the Board or the Racetrack 
Safety Committee is entitled to be represented by counsel at the 
party's expense.
    Additional rules are proposed for inclusion in Rule 8340 that 
permit the Board and the Racetrack Safety Committee to appoint a 
presiding officer to assist in the conduct of hearings. Rule 8340(i) 
specifies that the presiding officer may be assigned to exercise 
various powers similar to those that are performed by administrative 
law judges in contested proceedings at the state and federal level. 
These powers are set forth with specificity in the proposed rule and 
generally serve to ensure the orderly conduct of the presentation of 
evidence and witnesses and to regulate the conduct of parties and their 
attorneys. The Authority consulted and closely followed similar 
provisions in the ``Hearing Rules and Procedures'' of the New York 
Racing Association in developing these rules.
    The presiding officer may also be directed by the Board and the 
Racetrack Safety Committee under Rule 8340(j) to prepare a hearing 
report with a recommended penalty, if applicable, and the parties may 
be required to file briefs for consideration by the hearing officer in 
preparing the hearing report. The rule states that once the hearing 
report has been received by the Racetrack Safety Committee or the 
Board, these bodies may adopt, modify, or reject any or all the hearing 
report, including any recommended penalty. These rules parallel similar 
concepts in Kentucky's statutory scheme concerning the conduct of 
administrative hearings by an administrative law judge. Rule 8350, 
``Appeal to the Board,'' is amended in paragraphs (h) and (i) to permit 
the Board in appeal proceedings to appoint a hearing officer under the 
same rules set forth in Rule 8340 concerning the conduct of initial 
hearings and the preparation of a hearing report. Additionally, Rule 
8350(e) is amended to specify that the Board has the discretion to 
decide an appeal solely upon written submissions or in the alternative 
to conduct a hearing upon the issues raised by the appeal. In the same 
rule, the word ``heard'' is replaced with the word ``reviewed'' to 
conform to the change. Rule 8350(c) is modified to provide that a stay 
may be issued on appeal not only by the Board but also ``by any 
official or body of the Authority to whom the Board delegates the 
authority to review requests for stay.''
    Rule 8360, ``Accreditation Procedures,'' is amended in several 
places to include the words ``suspended'' or ``suspension,'' to conform 
to Rule 2116, ``Suspension and Revocation of Accreditation,'' which 
authorizes suspension as a penalty. Rule 8360(f)(1) is revised to refer 
more precisely to the ``Board'' in the context of the rule, rather than 
the ``Authority.'' The word ``an'' is added to correct a scrivener's 
error in Rule 8360(f)(2). A

[[Page 44398]]

short provision, Rule 8011, is added to specify that time is calculated 
under the Rule 8000 Series in calendar days and that, if the last day 
of a specified period of time falls on a Saturday, Sunday, or holiday, 
the last day shall be considered to be the next working day following 
the Saturday, Sunday, or holiday.

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 Enforcement proposed rule modification available to the public for 
review and comment on the HISA website, https://www.hisausregs.org/. 
Comments on the proposed rule modification were received from five 
individuals and groups in the horseracing industry: The Jockey Club, 
The Jockeys' Guild, Racing Officials Accreditation Program (``ROAP''), 
Colonial Downs Racetrack, and the American Association of Equine 
Practitioners (``AAEP'').
    Two of the commenters, Colonial Downs Racetrack and AAEP, stated 
that they had reviewed the proposed rule modification and had no 
suggested changes to offer. The three other commenters, The Jockey 
Club, The Jockeys' Guild, and ROAP, did not question or critique the 
proposed rule modifications as a whole but instead offered constructive 
suggestions to fine-tune various provisions in the initial drafts of 
the proposed rule modification. The Authority adopted a number of these 
suggested changes into the proposed rule modification as it developed 
into its final form.
    ROAP suggested that a lengthy sentence in an initial draft of Rule 
8320(a) concerning adjudication by the stewards be broken into two 
sentences for clarity. The Authority amended the sentence according to 
the suggestion, with some additional modifications. The Jockeys' Guild 
suggested that a short provision be added to Rule 8200(d), Notice of 
Suspected or Actual Violation, to clarify that the Authority may make a 
finding of no violation after review of a Covered Person's response to 
a Notice. Language was added in conformity with the suggestion.
    The Jockey Club suggested that Rule 8340(c)(3), which requires 
notice to be provided in advance of a hearing before the Board or the 
Racetrack Safety Committee, be amended to replace ``alleged violation'' 
with ``rule or rules allegedly violated.'' This suggestion is well 
taken and is included in the proposed rule modification for clarity.
    The Authority also implemented a suggestion from The Jockey Club 
that language be added to permit hearings by the Board and the 
Racetrack Safety Committee under Rules 8340(a) and (b) and Rule 8350 to 
be conducted both in-person and through the use of audio-visual 
teleconferencing. This language was included in the draft, and the 
Authority added language to permit the use of telephone audio systems 
as well.
    The Jockey Club also helpfully suggested that, if a hearing report 
is created, the parties should be permitted to file exceptions to the 
reports ``as a matter of right.'' The draft language of Rule 8340(j) 
was therefore amended to make clear that exceptions may be filed by the 
parties to a hearing report.
    The Authority declined to make some of the changes suggested by the 
commenters. Two of the suggestions were of more significance than the 
rest. The Jockey Club suggested that the seven-day deadline for a 
Covered Person's response to a Notice of Suspected or Actual Violation 
in Rule 8200(d)(1)(iii) be extended to twenty or thirty days. The 
Authority declined to make this change because some violations may 
present a hazard to racing participants and the public, and a rapid 
resolution of the matter is necessary. Nevertheless, the Rule provides 
for a longer response time ``as deemed appropriate and specified in the 
notice,'' based on the seriousness of the violation and the imminence 
of risk to Covered Persons, Covered Horses, and the public. In cases 
where those concerns are not present, it is anticipated that a longer 
response time will be specified in the notice as appropriate to the 
case.
    The Jockeys' Guild suggested that the term ``good cause'' be 
further defined in Rule 8350, which provides that a penalty may be 
stayed upon good cause shown. The Authority considered this change but 
opted to let the rule stand as written. This term is frequently 
employed without further definition in many areas of the law, and it is 
difficult to enumerate all of the factual circumstances that may 
qualify as a showing of ``good cause.''
    The remaining suggestions that the Authority declined to adopt 
involved minor revisions to various rules that the Authority believed 
were unnecessary to effectuate the intention of the rules. Some of the 
comments received posed questions about the application of a provision, 
rather than suggesting specific changes. In such instances no change 
was made, but the Authority is working diligently to educate and inform 
the racing community about the new rules to be implemented by the 
Authority.
    All of the changes proposed in the proposed rule modification are 
intended to enhance the Rule 8000 Series in a manner consistent with 15 
U.S.C. 3057(d). An effective enforcement system builds public 
confidence in the sport by ensuring that Covered Horseraces are 
conducted in a fair and transparent manner. The proposed rules are 
carefully tailored to the unique character of horseracing and to the 
organizational structure of the Authority. Covered Persons will benefit 
from the effective enforcement of the rules, the standards of integrity 
in racing that the rules establish, and the deterrence of violations. 
The safety and well-being of Covered Horses, always a primary concern 
to the Authority, will be safeguarded by the elaborate Rule 2000 Series 
Racetrack Safety rules promulgated by the Authority, and by the Rule 
8000 Series that ensures that the Racetrack Safety rules are 
effectively enforced.

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 
https://www.regulations.gov under docket number FTC-2022-0044.
    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.'' \18\ In other words, the Commission will evaluate the 
proposed

[[Page 44399]]

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.
---------------------------------------------------------------------------

    \18\ 15 U.S.C. 3053(c)(2).
---------------------------------------------------------------------------

    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.'' \19\ 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); \20\ 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.'' \21\ 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.'' \22\
---------------------------------------------------------------------------

    \19\ 15 U.S.C. 3053(e).
    \20\ 16 CFR 1.31; see Fed. Trade Comm'n, Procedures for 
Responding to Petitions for Rulemaking, 86 FR 59851 (Oct. 29, 2021).
    \21\ 16 CFR 1.31(b)(3).
    \22\ 15 U.S.C. 3053(e).
---------------------------------------------------------------------------

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 August 9, 2022. 
Write ``HISA Enforcement 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 https://www.regulations.gov.
    Because of the public health emergency in response to the COVID-19 
outbreak and the Commission's heightened security screening, postal 
mail addressed to the Commission will be subject to delay. The 
Commission strongly encourages that comments be submitted online 
through the https://www.regulations.gov 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 Enforcement 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 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 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 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 https://www.regulations.gov--as 
legally required by FTC Rule 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 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 August 
9, 2022. For information on the Commission's privacy policy, including 
routine uses permitted by the Privacy Act, see https://www.ftc.gov/siteinformation/privacypolicy.

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 Enforcement rule with the 
proposed modifications incorporated. A redline version that shows every 
way in which the previously approved Enforcement rule would be modified 
by the proposed rule modification is available as Exhibit C on the 
docket at https://www.regulations.gov.

8000. Violations, Sanctions, Hearing Procedures, and Investigatory 
Powers

8011. Calculation of Time

    In calculating any period of time prescribed in the Rule 8000 
Series, time shall be calculated in calendar days. If the last day of a 
specified period of time falls on a Saturday, Sunday, or holiday, then 
the last day of the period shall be considered to be the next working 
day immediately following the Saturday, Sunday, or holiday.

[[Page 44400]]

8100. Violations

    Violations under this Rule shall include:
    (a) Failure to cooperate with the Authority or an agent of the 
Authority during any investigation;
    (b) Failure to respond truthfully, to the best of a Covered 
Person's knowledge, to a question of the Authority or an agent of the 
Authority with respect to any matter under the jurisdiction of the 
Authority;
    (c) Tampering or attempted tampering with the application of the 
safety, performance, or anti-doping and medication control rules or 
process adopted by the Authority, including:
    (1) Intentional interference, or an attempt to interfere, with an 
official or agent of the Authority;
    (2) Procurement or the provision of knowingly false information to 
the Authority or agent of the Authority; and
    (3) The intimidation of, or an attempt to intimidate, a potential 
witness;
    (d) Assisting, encouraging, aiding, abetting, conspiring, covering 
up, or any other type of intentional complicity involving a racetrack 
safety violation, or the violation of a period of suspension or 
ineligibility;
    (e) Threatening or seeking to intimidate a person with the intent 
of discouraging the person from the good faith reporting to the 
Authority, an agent of the Authority, or the Commission, of information 
that relates to:
    (1) A suspected or alleged violation of a rule in the Rule 2200 
Series; or
    (2) A suspected or alleged noncompliance with a rule in the Rule 
2200 Series;
    (f) Failure to comply with a written order or ruling of the 
Authority or an agent of the Authority pertaining to a racing matter or 
investigation;
    (g) Failure to register with the Authority, failure of a 
Responsible Person to register a Covered Horse, making a knowingly 
false statement or omission of information in an application for 
registration with the Authority, or failure to advise the Authority of 
material changes in the application information as required under any 
provision in Authority regulations;
    (h) Perpetrating or attempting to perpetrate a fraud or 
misrepresentation in connection with the care or racing of a Covered 
Horse;
    (i) Failure to remit fees as required under 15 U.S.C. 3052(f)(3); 
and
    (j) Failure by a Racetrack to collect equitable allocation amounts 
among Covered Persons in conformity with the funding provisions of 15 
U.S.C. 3052(f)(3) and any rules pertaining thereto.

8200. Schedule of Sanctions for Violations; Consent Decrees; Notice of 
Suspected or Actual Violation

    (a) Application. This Schedule shall apply to any violation of, or 
failure to comply with, the Act or regulations promulgated by the 
Authority by a Covered Person, except for:
    (1) Anti-doping and medication control rule violations as 
established in the Rule 3000 Series; and
    (2) State laws or regulations not pre-empted by 15 U.S.C. 3054(b).
    (b) Imposition of Sanction. The Authority, the Racetrack Safety 
Committee, the stewards, any steward or body of stewards selected from 
the National Stewards Panel, or an Arbitral Body, after any hearing 
required to be conducted in accordance with the Rule 7000 Series or 
Rule 8000 Series and upon finding a violation or failure to comply with 
the regulations of the Authority with the exceptions identified in 
paragraph (a), may impose one or more of the following sanctions on a 
Covered Person for each violation of the rules of the Authority, in 
proportion to the nature, chronicity, and severity of the violation:
    (1) For a violation of Rule 2271(b) or 2272 relating to the use of 
Shock Wave Therapy, a violation of Rule 2273 relating to the use of 
other electrical or mechanical devices, or a violation of Rule 2280 
relating to the use of the riding crop, impose the penalties set forth 
in Rules 2272, 2274, 2282, and 2283, in addition to any penalty set 
forth in Rule 8200(b)(2) through (12);
    (2) Impose a fine upon a Covered Person in the following amounts:
    (i) Up to $50,000.00 for a first violation, or
    (ii) Up to $100,000.00 for a second violation of the same or 
similar nature to a prior violation, or any violation that due to its 
nature, chronicity, or severity poses an actual or potential threat of 
harm to the safety, health, and welfare of Covered Persons, Covered 
Horses, or the integrity of Covered Horseraces;
    (3) Deny or suspend the registration of a Covered Person for a 
definite period, probationary period, or a period contingent on the 
performance of a particular act;
    (4) Revoke the registration of a Covered Person subject to 
reapplication at a specified date;
    (5) Impose a lifetime ban from registration with the Authority;
    (6) Deny a Covered Person or a Covered Horse access to any location 
under the jurisdiction of the Authority during the period of a 
suspension;
    (7) Impose a temporary or permanent cease and desist order against 
a Covered Person;
    (8) Require a Covered Person as a condition of participation in 
horseracing to take any remedial or other action that is consistent 
with the safety, welfare, and integrity of Covered Horses, Covered 
Persons, and Covered Horseraces;
    (9) Deny or require the forfeiture of purse money, disqualify a 
horse, or make changes to the order of finish in Covered Races as 
consistent with the safety, welfare, and integrity of Covered Horses, 
Covered Persons, and Covered Horseraces;
    (10) Censure a Covered Person;
    (11) Prohibit a Racetrack from conducting any Covered Horserace; or
    (12) Impose any other sanction as a condition of participation in 
horseracing as deemed appropriate by the Authority in keeping with the 
seriousness of the violation and the facts of the case, and that is 
consistent with the safety, welfare, and integrity of Covered Horses, 
Covered Persons, and Covered Horseraces.
    (c) Consent Decrees. The Authority shall have the discretion to 
enter into a consent decree or other similar agreement with a Covered 
Person as necessary to promote the safety, welfare, and integrity of 
Covered Horses, Covered Persons, and Covered Horseraces.
    (d) Notice of Suspected or Actual Violation.
    (1) The Authority, the Racetrack Safety Committee, or one or more 
stewards may issue a Notice of Suspected or Actual Violation to a 
Covered Person in any case in which the Authority has reason to believe 
that the Covered Person has violated or has failed to comply with any 
provision of regulations of the Authority. The notice shall:
    (i) Identify the provision or provisions which the Covered Person 
is believed to have violated;
    (ii) Specify with reasonable particularity the factual basis of the 
Authority's belief that the provision has been violated; and
    (iii) Provide the Covered Person at least 7 days to respond, or a 
longer period as deemed appropriate and specified in the Notice based 
upon:
    (A) The seriousness of the violation;
    (B) The imminence of risk to Covered Persons, Covered Horses, 
Covered Horseraces, or the public; or
    (C) Any other relevant factor.
    (2) Upon receipt of the Notice of Suspected or Actual Violation, 
the Covered Person shall respond in writing to the issuing body within 
the time period specified in the notice. The Covered Person shall 
include in the response:

[[Page 44401]]

    (i) A statement by the Covered Person admitting the violation or 
explaining the reasons why the Covered Person believes that a violation 
has not occurred;
    (ii) All relevant details concerning the circumstances of the 
suspected or actual violation, including the results of any 
investigation undertaken by the Covered Person of the circumstances, 
and identification of any persons responsible for the circumstances; 
and
    (iii) A detailed explanation of any remedial plan the Covered 
Person proposes to undertake to cure the suspected or actual violation 
and the date of the expected completion of the remedial plan.
    (3) Upon receipt of the written response of the Covered Person, the 
issuing body may accept any proposed remedial plan, subject to any 
reasonable modifications the issuing body deems necessary, or it may 
initiate disciplinary proceedings in conformity with the provisions of 
Rule 8300. If the issuing body determines that no violation has 
occurred, the issuing body shall so inform the Covered Person and no 
further action shall be taken.

8300. Disciplinary Hearings and Accreditation Procedures

8310. Application

    An alleged violation or failure to comply with the provisions of 
the Rule 2200 Series and any alleged violation of the rules set forth 
in Rule 8100 shall be adjudicated in accordance with this Rule 8300 
Series, except that:
    (a) An alleged violation of the anti-doping and medication control 
rule provisions in the Rule 3000 Series shall be adjudicated in 
accordance with the procedures set forth therein; and
    (b) This regulation shall not apply to the adjudication of 
violations arising under state laws, racing rules, and regulations not 
preempted under 15 U.S.C. 3054(b).

8320. Adjudication of Violations in the Rule 2200 Series

    (a) The stewards shall adjudicate all alleged violations of Rules 
2271(b) or 2272 relating to the use of Shock Wave Therapy, Rule 2280 
relating to the use of the riding crop, and Rule 2273 relating to the 
use of other electrical or mechanical devices. The stewards shall apply 
the hearing procedures of the state jurisdiction in which the violation 
is alleged to have occurred. Provided, however, that in any state that 
has not entered into an agreement with the Authority under which the 
state stewards serve in an adjudicatory capacity under the Rule 8000 
Series and enforce the Rule 2200 Series, a hearing may be conducted by 
one or more stewards, notwithstanding any state rule to the contrary. 
All testimony at a stewards' hearing shall be given under oath, and a 
record of the hearing shall be kept by use of an audio recorder, video 
recording, or court reporter's transcript. Any ruling by the stewards 
finding a violation may be appealed to the Board of the Authority under 
the procedures described in Rule 8350. An appeal shall be filed in 
writing within 10 days of the issuance of the ruling by the stewards.
    (b) With regard to any matter involving an alleged violation of a 
rule in the Rule 2200 Series other than those set forth in paragraph 
(a) above, the Racetrack Safety Committee may, at its discretion and 
taking into account the seriousness of the alleged violation and the 
facts of the case:
    (1) Refer the matter to one or more members of the National 
Stewards Panel for adjudication in conformity with the procedures 
established in the Rule 7000 Series;
    (2) Refer the matter to an independent Arbitral Body for 
adjudication in conformity with the procedures established in the Rule 
7000 Series;
    (3) Refer the matter to the stewards for adjudication in accordance 
with the hearing procedures of the applicable state jurisdiction. 
Provided, however, that in any state that has not entered into an 
agreement with the Authority under which the state stewards serve in an 
adjudicatory capacity under the Rule 8000 Series and enforce the Rule 
2200 Series, a hearing may be conducted by one or more stewards, 
notwithstanding any state rule to the contrary; or
    (4) Conduct a hearing upon the matter itself, under the procedures 
set forth in Rule 8340.

8330. Adjudication of Rule 8100 Violations

    With regard to any matter involving an alleged violation of a rule 
established in Rule 8100, the Board of the Authority may, at its 
discretion and taking into account the seriousness of the violation and 
the facts of the case:
    (a) Refer the matter to one or more members of the National 
Stewards Panel for adjudication in conformity with the procedures 
established in the Rule 7000 Series;
    (b) Refer the matter to an independent Arbitral Body for 
adjudication in conformity with the procedures established in the Rule 
7000 Series;
    (c) Refer the matter to the stewards for adjudication in accordance 
with the hearing procedures of the applicable state jurisdiction. 
Provided, however, that in any state that has not entered into an 
agreement with the Authority under which the state stewards shall serve 
in an adjudicatory capacity under the Rule 8000 Series and enforce the 
Rule 2200 Series, a hearing may be conducted by one or more stewards, 
notwithstanding any state rule to the contrary; or
    (d) Conduct a hearing upon the matter itself, under the procedures 
set forth in Rule 8340.

8340. Initial Hearings Conducted Before the Racetrack Safety Committee 
or the Board of the Authority

    (a) An initial hearing before the Board shall be conducted by a 
panel of three Board members. The Board chair shall appoint the panel 
members and shall also designate one of them as the chair of the panel. 
At the discretion of the panel of the Board, an initial hearing may be 
conducted in person or by means of an audio-visual teleconferencing 
system or a telephone audio system.
    (b) An initial hearing before the Racetrack Safety Committee shall 
be heard by a quorum of the Racetrack Safety Committee. The Racetrack 
Safety Committee Chair shall act as the chair of the hearing panel 
unless the Chair is unavailable, in which case the Racetrack Safety 
Committee Chair shall designate a member of the quorum to act as the 
chair of the panel. At the discretion of the Racetrack Safety 
Committee, an initial hearing may be conducted in person or by means of 
an audio-visual teleconferencing system or a telephone audio system.
    (c) Persons entitled to notice of a hearing before the Board or the 
Racetrack Safety Committee shall be informed not less than 20 days 
prior to the hearing of:
    (1) The time, place, and nature of the hearing;
    (2) The legal authority and jurisdiction under which the hearing is 
to be held;
    (3) A description of the rule or rules allegedly violated, 
specifying by number the rule allegedly violated; and
    (4) A statement of the factual basis of the alleged violation in 
sufficient detail to provide adequate opportunity to prepare for the 
hearing.
    (d) At any time prior to, during, or after the hearing, the Board 
or the Racetrack Safety Committee in its discretion may require the 
submission of written briefs or other information as will assist in the 
hearing of the matter.
    (e) All testimony in proceedings before the Board or the Racetrack 
Safety Committee shall be given under oath,

[[Page 44402]]

and a record of the proceedings shall be kept in stenographic or 
recorded form.
    (f) The burden of proof shall be on the party alleging the 
violation to show, by a preponderance of the evidence, that the Covered 
Person has violated or failed to comply with a provision of or is 
responsible for a violation of a provision of the Authority's 
regulations.
    (g) The Board or the Racetrack Safety Committee shall allow a full 
presentation of evidence and shall not be bound by the technical rules 
of evidence. However, the Board or the Racetrack Safety Committee may 
disallow evidence that is irrelevant or unduly repetitive of other 
evidence. The Board or the Racetrack Safety Committee shall have the 
authority to determine, in its sole discretion, the weight and 
credibility of any evidence or testimony. The Board or the Racetrack 
Safety Committee may admit hearsay evidence if it determines the 
evidence is of a type that is commonly relied on by reasonably prudent 
people. Any applicable rule of privilege shall apply in hearings before 
the Board or the Committee.
    (h) A party shall be entitled to present its case or defense by 
oral or documentary evidence, to be represented by counsel at the 
party's expense, to submit rebuttal evidence, and to conduct such 
limited cross-examination as may be required for a full and true 
disclosure of the facts.
    (i) Presiding Officer for the Conduct of the Hearing. The Board or 
the Racetrack Safety Committee may appoint a presiding officer to 
assist in regulating the orderly conduct of and presentation of 
evidence at the hearing. The Board or the Racetrack Safety Committee 
may assign to the presiding officer any or all of the following powers, 
in any manner that the Board or Racetrack Safety Committee determines 
is most appropriate based upon the nature and complexity of the subject 
matter of the hearing. The presiding officer may be granted the power 
to:
    (1) Rule upon requests, including all requests for adjournments;
    (2) Set the time and place of hearing, recesses, and adjournments;
    (3) Administer oaths and affirmations;
    (4) Summon and examine witnesses, including the authority to direct 
a party
    to appear and to testify;
    (5) Order that opening and closing statements be made;
    (6) Admit or exclude evidence;
    (7) Allow oral argument, so long as it is recorded;
    (8) Issue orders limiting the scope and length of cross-
examination, the length of briefs, and other similar matters;
    (9) Order the parties to appear for a prehearing conference to 
consider matters that may simplify the issues or expedite the 
proceeding; and
    (10) Perform all acts and take all measures necessary for the 
maintenance of order and the efficient conduct of the hearing.
    (j) Presiding Officer for the Submission of a Hearing Report. The 
Board or the Racetrack Safety Committee may direct a presiding officer 
to issue in writing a hearing report at the conclusion of the hearing 
and to submit it to the Board or the Racetrack Safety Committee and all 
parties. A copy of the record of the hearing shall accompany the 
hearing report. The hearing report shall set forth findings of fact, 
conclusions of law, and a recommended disposition. If the presiding 
officer finds that imposition of a penalty under Rule 8200 upon a party 
to the hearing is warranted, the recommended penalty shall be set forth 
in specific detail, including the length of any suspension and the 
amount of any fine. If so directed by the Board or the Racetrack Safety 
Committee, the presiding officer shall establish a schedule for the 
filing by the parties of:
    (1) Briefs to be considered by the presiding officer prior to the 
presiding officer's preparation of the hearing report; and
    (2) Exceptions to the presiding officer's hearing report after the 
hearing report has been delivered to the parties. The exceptions may 
include for consideration and adoption by the Board or the Racetrack 
Safety Committee the particular findings of fact, conclusions of law, 
and recommendations for disposition with which the party disagrees and 
the reasons for such disagreement, any general comments by the party on 
the suitability of the hearing report, and the party's alternative 
proposed findings of fact, conclusions of law, and recommendations for 
disposition. A party shall send a copy of its exceptions to all other 
parties or their attorneys and presiding officer.
    (k) Review by the Board or the Racetrack Safety Committee. Upon 
receipt of the record of the hearing, and of any hearing report and 
exceptions thereto submitted pursuant to paragraph (j), the Board or 
the Racetrack Safety Committee shall review the record and submissions. 
The period for review shall not exceed 20 days unless extended by the 
Board or the Racetrack Safety Committee upon notice to all parties.
    (l) Written Decision. The Board or the Racetrack Safety Committee 
shall issue to all parties within 30 days of the close of the review 
period a written decision setting forth findings of fact, conclusions 
of law, and the disposition of the matter including any penalty 
imposed. If a hearing report has been received, the Board and the 
Racetrack Safety Committee shall have discretion to adopt, modify, or 
reject any or all of the hearing report including, but not limited to, 
the appropriate disposition of the proceeding and any penalty 
recommended.

8350. Appeal to the Board

    (a) Any decision rendered by the Racetrack Safety Committee, the 
stewards, the National Stewards Panel, or an Arbitral Body may be 
appealed on the record to the Board. The decision may be appealed by a 
party to the decision, or the decision may be reviewed upon the Board's 
own initiative and at its discretion.
    (b) Any decision rendered by an initial Board hearing panel may be 
appealed on the record to the Board, to be reviewed by a quorum of the 
Board which shall not include the Board members who were on the panel 
in the initial hearing. The decision may be appealed by a party to the 
decision, or the decision may be reviewed upon the Board's own 
initiative and at its discretion.
    (c) An appeal shall not automatically stay the decision. A party 
may request the Board to stay the decision. A stay may be issued by the 
Board, or any official or body of the Authority to whom the Board 
delegates the authority to review requests for stay, for good cause 
shown.
    (d) A party to the decision may appeal to the Board by filing with 
the Board a written request for an appeal within 10 days of receiving a 
written order. The appeal request shall contain the following 
information:
    (1) The name, address, and telephone number, if any, of the 
appellant;
    (2) A description of the objections to the decision;
    (3) A statement of the relief sought; and
    (4) Whether the appellant desires to have a hearing of the appeal.
    (e) The Board may in its discretion review a decision based solely 
upon written submissions scheduled for filing with such timing and 
response requirements as the Board may require. Alternatively, or in 
addition to written submissions, the Board may set a date, time, and 
place for a hearing. Notice shall be given to the appellant in writing 
and shall set out the date, time, and place of the hearing, and shall 
be served personally or sent by electronic or U.S. mail to the last 
known address of the

[[Page 44403]]

appellant. If the appellant objects to the date of the hearing, the 
appellant may obtain a continuance, but the continuance shall not 
automatically stay imposition of a sanction or prolong a stay issued by 
the Board. At the discretion of the Board, the hearing may be conducted 
in person or by means of an audio-visual videoconferencing system or a 
telephone audio system.
    (f) Upon review of the decision that is the subject of the appeal, 
the Board shall uphold the decision unless it is clearly erroneous or 
not supported by the evidence or applicable law.
    (g) Upon completing its review, the Board may:
    (1) Accept the decision;
    (2) Reject or modify the decision, in whole or in part;
    (3) Remand the matter, in whole or in part, to the stewards, 
Racetrack Safety Committee, the National Stewards Panel, or an Arbitral 
Body, as the case may be, for further proceedings as appropriate; or
    (4) Conduct further proceedings on the matter as appropriate, 
including but not limited to requiring the submission of written briefs 
or, in extraordinary circumstances and at the Board's discretion, the 
taking of additional testimony before the Board under oath.
    (h) The Board may appoint a presiding officer to assist in 
regulating the orderly conduct of and presentation of evidence at a 
hearing in accordance with Rule 8340(i). The Board may also direct a 
presiding officer to issue in writing a hearing report at the 
conclusion of the hearing in accordance with Rule 8340(j).
    (i) The Board shall issue its written decision based on the record 
and any further proceedings, testimony, or hearing report and 
exceptions thereto submitted in accordance with Rule 8340(k). If a 
hearing report and exceptions have been submitted, the Board's written 
decision shall in accordance with Rule 8340(l) include findings of 
fact, conclusions of law, and the disposition of the matter including 
any penalty imposed. The Board shall not be bound by the timing 
provisions in Rules 8340(k) and (l) relating to the period for review 
and the issuance by the Board of its written decision. A copy of the 
Board's decision shall be served upon all parties by first class mail, 
electronic mail, or personal service.
    (j) The decision of the Board shall be the final decision of the 
Authority.

8360. Accreditation Procedures

    (a) Any decision issued by the Authority denying, suspending, or 
revoking racetrack accreditation may:
    (1) Be appealed within 10 days by the Racetrack to the Authority 
for a de novo hearing reviewing the Authority's decision; or
    (2) Reviewed by the Authority on its own initiative.
    (b) The Authority's order suspending or revoking accreditation 
shall be stayed automatically pending review of the decision by the 
Authority.
    (c) At its discretion, the Authority may request and consider any 
additional information from any source that may assist in the review.
    (d) The Racetrack may request to make a presentation before the 
Authority concerning racetrack safety and any remedial efforts proposed 
to be undertaken by the Racetrack. At its discretion, the Authority may 
permit the Racetrack to make such presentation.
    (e) In conducting its review, that Authority may consider all 
factors that it deems appropriate, including but not limited to:
    (1) The extent and magnitude of any deficiencies in racetrack 
operations conducted at the Racetrack;
    (2) The threat posed by the deficiencies to the safety and 
integrity of horseracing conducted at the Racetrack;
    (3) The adequacy of the efforts the Racetrack proposes to undertake 
or has undertaken to remedy all deficiencies at the Racetrack;
    (4) The likelihood and timeframe within which compliance will be 
achieved by the Racetrack, given the resources available to the 
Racetrack and the past record of the Racetrack in achieving and 
maintaining compliance with the rules of the Authority; and
    (5) Any other factors the Authority deems relevant to its review.
    (f) Upon completing its review, the Authority may take one or more 
of the following actions:
    (1) Order that the Racetrack's accreditation be denied, suspended, 
or revoked, upon a vote in favor of denial or revocation by two-thirds 
of a quorum of the members of the Board;
    (2) Reinstate accreditation subject to any requirements the 
Authority deems necessary to ensure that horseracing will be conducted 
in a manner consistent with racetrack safety and integrity. The 
Authority may also impose a fine upon reinstatement in an amount not to 
exceed $50,000.00. The Authority may require the Racetrack to report at 
prescribed intervals on the status of racetrack safety operations and 
remedial efforts to improve safety pursuant to the Authority's 
racetrack safety rules; or
    (3) Prohibit a Racetrack from conducting any Covered Horserace.

8370. Final Civil Sanction

    Any decision rendered by the Board of the Authority under Rule 
8350, or the Authority under Rule 8360, shall constitute a final civil 
sanction subject to appeal and review in accordance with the provisions 
of 15 U.S.C. 3058.

8380. Guidelines for Confidentiality and Public Reporting

    As used in this Rule, ``public disclosure'' means the dissemination 
or distribution of information by the Authority to the general public.
    (a) This Rule shall apply to an alleged violation of any provision 
of the Act, the Rule 2000 Series, the Rule 8000 Series, or the Rule 
9000 Series. It shall not apply to:
    (1) An alleged violation of the anti-doping and medication control 
rule provisions in the Rule 3000 Series; or
    (2) An alleged violation arising under state laws, racing rules, 
and regulations not preempted under 15 U.S.C. 3054(b).
    (b) After notice of a violation of any provision in the Rule 2200 
Series, the Rule 8000 Series, or the Rule 9000 Series has been provided 
to a Covered Person by the Authority or any official or body authorized 
to adjudicate violations under the Rule 8000 Series, the Authority 
shall publicly disclose the following information relating to the 
alleged violation:
    (1) The identity of any Covered Person who is the subject of the 
alleged violation;
    (2) The identity of any applicable horse; and
    (3) The rule violated and, where appropriate, the basis of the 
asserted violation.
    (c) Information as described in paragraph (b) concerning a 
violation of the Rule 2100 Series shall be disclosed in accordance with 
this Rule by the Authority either upon issuance of a Notice of 
Suspected or Actual Violation, or at any time thereafter, as deemed 
appropriate by the Authority.
    (d) If at any time information pertaining to an alleged violation 
is publicly disclosed by the Covered Person charged with the violation 
or any employee or agent of the Covered Person, the Authority may 
comment on the information publicly disclosed by the Covered Person.
    (e) The Authority shall not be required to make public disclosure 
if public disclosure will compromise an ongoing investigation or 
proceeding. When the Authority determines that an ongoing investigation 
or proceeding will no longer be compromised by public disclosure, the 
Authority shall at such time make any public disclosure required under 
this Rule.

[[Page 44404]]

    (f) Notwithstanding any provision to the contrary in the rules of 
the Authority, the Authority may make public disclosure of any relevant 
information at any time, including prior to delivery of notice of a 
violation, if the Authority determines that such disclosure:
    (1) Concerns a violation or circumstance that poses a serious and 
imminent risk of harm to Covered Persons, Covered Horses, or the 
public; or
    (2) Is otherwise in the best interest of horseracing conducted at 
Covered Horseraces.
    (g) The Authority shall publicly disclose the resolution of an 
alleged violation no later than 20 calendar days after the earlier of:
    (1) The imposition of a final civil sanction;
    (2) A resolution between the Authority and the Covered Person; or
    (3) The dismissal of the allegation or a finding of no violation by 
the Authority.
    (h) Public disclosure under paragraph (g)(1) & (2) shall include 
the following:
    (1) The name of the Covered Person who committed the violation and 
any Covered Horse affected by the violation;
    (2) The Rule violated;
    (3) The sanction imposed;
    (4) The order or other ruling issued in the matter; and
    (5) The results of any appellate decisions concerning the 
violation.
    (i) Public Disclosure shall not be required under this Rule if the 
Covered Person alleged to have committed a violation is a minor. Public 
disclosure concerning a case involving a minor shall be at the 
discretion of the Authority and in proportion to the facts and 
circumstances of the case.
    (j) Publication shall be accomplished at a minimum by placing the 
required information on the Authority's website or publishing it 
through other means.
    (k) Pursuant to 15 U.S.C. 3054, this Rule shall preempt any 
provision of State law or regulation, including those pertaining to 
data practice and privacy laws.

8400. Investigatory Powers

    (a) The Commission, the Authority, or their designees:
    (1) Shall have free access to:
    (i) With regard to Covered Persons, books, records, offices, 
racetrack facilities, and other places of business of Covered Persons 
that relate to the care, treatment, training, and racing of Covered 
Horses; and
    (ii) With regard to any person who owns a Covered Horse or performs 
services on a Covered Horse, books, records, offices, facilities, and 
other places of business that relate to the care, treatment, training, 
and racing of Covered Horses.
    (2) May seize any medication, drug, substance, or paraphernalia in 
violation or suspected violation of any provision of 15 U.S.C. Chapter 
57A or the regulations of the Authority, and any object or device 
reasonably believed to have been used in furtherance of the violation 
or suspected violation.
    (b) Upon final resolution of a violation, the Commission, the 
Authority, or their designees shall return seized property, including 
but not limited to phones, computers, and other repositories of 
electronic data, the possession of which is not specifically prohibited 
by the Act or the rules of the Authority.
    (c) A Covered Person shall:
    (1) Cooperate with the Commission, the Authority, or their 
designees during any investigation; and
    (2) Respond truthfully to the best of the Covered Person's 
knowledge if questioned by the Commission, the Authority, or their 
designees about a racing matter.
    (d) A Covered Person or any officer, employee, or agent of a 
Covered Person shall not hinder a person who is conducting an 
investigation under or attempting to enforce or administer any 
provision of 15 U.S.C. Chapter 57A or the regulations of the Authority.
    (e) The Commission or the Authority may issue subpoenas for the 
attendance of witnesses in proceedings within their jurisdiction, and 
for the production of documents, records, papers, books, supplies, 
devices, equipment, and all other instrumentalities related to matters 
within the jurisdiction of the Commission or the Authority.
    (f) Failure to comply with a subpoena or with the other provisions 
of this Rule may be penalized by the imposition of one or more 
penalties set forth in Rule 8200.
    (g) The Commission or the Authority may administer oaths to 
witnesses and require witnesses to testify under oath in matters within 
the jurisdiction of the Commission or the Authority.

    By direction of the Commission.
April J. Tabor,
Secretary.
[FR Doc. 2022-15972 Filed 7-25-22; 8:45 am]
BILLING CODE 6750-01-P