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###### Federal Trade Commission

          - [File No. P222100]

# AGENCY:

Federal Trade Commission.

# ACTION:

Notice of Horseracing Integrity and Safety Authority (HISA) proposed rule modification; request for public comment.

# SUMMARY:

As required by the Horseracing Integrity and Safety Act of 2020, the Federal Trade Commission publishes a proposed modification of the Horseracing Integrity and Safety Authority's rules addressing horseracing in the United States. The proposed rule modification would amend the Rule Series 9000 Registration Rules, which establish the registration requirements applicable to all Covered Horses, Covered Persons, and Racetracks. This document contains the Authority's proposed rule modification's text and explanation, and it seeks public comment on whether the Commission should approve the proposed rule modification.

# DATES:

The Commission must approve or disapprove the proposed modification on or before April 22, 2024. If approved, the proposed rule modification would be effective on July 1, 2024. Comments must be filed on or before March 5, 2024.

# 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 Registration Rule Modification” on your comment and file your comment online at                         *https://www.regulations.gov*                         by following the instructions on the web-based form. 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, Mail Stop H-144 (Annex H), Washington, DC 20580.                    

# FOR FURTHER INFORMATION CONTACT:

Sarah Botha (202-326-2036), Attorney Advisor and Acting HISA Program Manager, Office of the Executive Director, Federal Trade Commission, 600 Pennsylvania Avenue NW, Washington, DC 20580.

# SUPPLEMENTARY INFORMATION:

                    The Horseracing Integrity and Safety Act of 2020 [1]                                          (the “Act”) recognizes a self-regulatory nonprofit organization, the Horseracing Integrity and Safety Authority (“HISA” or the “Authority”), which is charged with developing proposed rules on a variety of subjects. Those proposed rules and later 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] 

                    Pursuant to Section 3053(a) of the Act and Commission Rule 1.142, notice is hereby given that, on September 27, 2023, the Authority filed with the Commission a proposed Registration Rule modification and supporting documentation as described in Items I, II, III, IV, 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 is publishing this document to solicit comments on the proposed rule modification from interested persons.                

## I. Self-Regulatory Organization's Statement of the Background, Purpose of, and Statutory Basis for the Proposed Rule Modification

### a. Background and Purpose

                    The Act recognizes that the establishment of a national set of uniform standards for racetrack safety and medication control will enhance the safety and integrity of horseracing. On April 25, 2022, the Authority filed with the Commission the Rule 9000 Series, which establishes the registration requirements for Covered Persons and Covered Horses. The Rule 9000 Series was published in the                     **Federal Register**                     on May 17, 2022,[6]                                          and approved by the Commission by Order dated June 29, 2022.[7] 

                    The Authority now proposes modifications to several provisions in the Rule 9000 Series. This submission is made in order to comply with the Commission's March 27, 2023 Order that directed “the Authority to review all of its existing rules (Racetrack Safety, Assessment Methodology, Enforcement, Registration, and ADMC) and submit any proposed rule modifications to the Commission by September 27, 2023.” [8]                                          The Authority has reviewed all of its existing rules and this submission is filed in accordance with the March 27, 2023 Order. The modifications are limited in scope and build upon the registration system already in place. An additional reason for proposing the rule modification is to clarify and refine various details in the Rule 9000 Series Registration Rules in a manner that is consistent with the Act. The modifications are outlined in detail in Section II of this Document. In general terms, the modifications enhance and refine the requirements and procedures for the registration of Covered Persons, Covered Horses, and Racetracks.                

                    The safety and welfare of Covered Horses will be affected and enhanced by this rule modification because the modifications will enable the Authority to possess accurate and timely information concerning Covered Persons and Covered Horses. Covered Persons will be affected by modifications that alter slightly some of the registration requirements, but the requirements as altered are not burdensome. The registration of Covered Horses and Covered Persons, including racetracks, furthers the purpose of enhancing the safety, welfare, and integrity of Covered Persons and Covered Horses, and the safe conduct of Covered Horseraces will be affected and enhanced as a result. An effective registration system provides Covered Persons with the information and guidance necessary to properly register with the Authority, establishes certain exemptions to registration, requires that registration information be updated as necessary, and provides for the registration of Covered Horses. It also requires that Covered Persons provide and update their contact information with the Authority, so that the Authority may contact a Covered Person quickly in order to address any                           ( print page 12840)                        safety and welfare issues concerning Covered Horses that may arise. The proposed rule modification takes into account the unique character of horseracing and Covered Persons, Covered Horseraces, and Covered Horses that will be affected by the proposed rule modification in similar ways.                

                    The modifications have been crafted in the most precise manner possible to resolve the minor problems and specific issues that are outlined in Section II for each modification. The modifications are very tightly focused, and making these changes did not require the weighing of significant reasonable alternatives. The modifications are consistent with the Act because they further the directive of 15 U.S.C. 3054(d), which requires the Authority to establish a registration system for Covered Persons. The Authority incorporates by reference into this modification the existing standards that were set forth in the Notice of Filing of Proposed Rule that originally established the Rule 9000 Series and that was submitted to the Commission in the original filing of the Rule 9000 Series on April 25, 2022.[9] 

                    On August 28, 2023, HISA representatives shared the draft of the Rule 9000 modifications with the following interested stakeholders for input: Racing Officials Accreditation Program; Racing Medication and Testing Consortium (Scientific Advisory Committee); National Thoroughbred Racing Association; The Jockey Club; The Jockeys' Guild; Thoroughbred Racing Association; Arapahoe Park; Rillito Downs; Thoroughbred Owners of California; California Horse Racing Board; Kentucky Racing Commission; Delaware Racing Commission; Maryland Racing Commission; National Horsemen's Benevolent and Protective Association; Thoroughbred Horsemen's Association; Thoroughbred Owners and Breeders Association; Kentucky Thoroughbred Association; American Association of Equine Practitioners; American Veterinary Medical Association; Stronach Racing Group (5 thoroughbred racetracks); Churchill Downs (6 thoroughbred racetracks); Breeders' Cup; Keeneland; Del Mar; and the Racing Operations Committee. Additionally, on August 28, 2023, the draft of the proposed modifications was made available to the public for review and comment on the HISA website at                     *https://hisaus.org/​.*                     No comments were received regarding the Registration Rule or 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 9000 Series modifies and enhances the registration rules. HISA submits herewith the proposed rule modification for Commission approval. As required by 15 U.S.C. 3053(c)(2), the rules are consistent with the Act and the rules approved by the Commission. Pursuant to 16 CFR part 1, subpart S 1.142(a)(7), the Authority proposed January 5, 2024, as the date for the                     **Federal Register**                     to publish this proposed rule modification.                

### 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 Proposed Rule Modification

The Authority's Registration Rule was guided by the purposes and objectives of the Act, and in particular the Act's explicit directive in 15 U.S.C. 3054(d)(1) that Covered Persons be required to register with the Authority in accordance with rules promulgated by the Authority and approved by the Commission. The Registration Rule establishes the requirements and procedures for the registration of Covered Persons and Covered Horses.

Rule 9000(a) is modified to exempt Owners having an ownership or beneficial interest in a Covered Horse of less than five (5) percent from registration unless such owner is or becomes a Responsible Person as defined in Rule 2010. Many state racing commissions exempt individuals who own a small percentage of a horse from licensure requirements. The Authority has determined that the registration of Owners having an ownership or beneficial interest in a horse of less than five (5) percent is not necessary for the safety, welfare, and integrity of Covered Persons and Covered Horses, and the safe conduct of Covered Horseraces unless the owner is or becomes the Responsible Person. The remainder of the modifications in Rule 9000(a) are stylistic edits.

Currently, Rule 9000(b) requires that a Covered Person provide a mobile phone number or email address, or both if available. The modification requires an email address and a mobile phone number, if the Covered Person possesses a mobile phone. The Authority uses email addresses to communicate with Covered Persons. Quite simply, a Covered Person needs to provide an email address so that the Covered Person can receive communications from the Authority. The remainder of the modifications in Rule 9000(b) are stylistic edits.

Rule 9000(d) is amended to require that any Covered Person who registers as a Veterinarian shall also provide the name and contact information for any clinic or practice that the Veterinarian is associated with, along with the Veterinarian's state license number. The information pertaining to the clinic facilitates maintenance of and access to veterinary records and will allow trainers to identify a clinic by name instead of a specific Veterinarian who might change from visit to visit. The state license number will allow the Authority to check and verify the Veterinarian's status.

Rule 9000(e), which sets forth the registration requirements for Racetracks, is amended to add the following clause: “4. Any other information reasonably required by the Authority to fulfill its statutory duties under the Act.” This clause is already included in the Registration Rule for Covered Horses and Covered Persons but was inadvertently omitted in the Registration Rule relating to Racetracks. The remainder of the modifications in Rules 9000(e), 9000(f) and 9000(g) are stylistic edits.

Rule 9000(h) was moved to Rule 9000(i) since it should more properly be located at the end of the rule series; it prescribes the general requirements to provide complete and accurate information and to report any material changes to the information and establishes penalties for failure to comply with the registration rules. The only substantive change to the section was the addition of the failure of a Responsible Person to register a Covered Horse as a violation. This addition comes from Rule 9000(j) and means that the penalties can be consolidated and listed in Rule 9000(i). The remainder of the modifications in Rule 9000(i) are stylistic edits.

                    The registration of Covered Horses is now set forth in Rule 9000(h). The Act states that a horse becomes a Covered Horse on the date of the horse's first timed and reported workout at a Racetrack that participates in Covered Horseraces or at a training facility. This language was added to the rule to make clear when the duty to register a Covered Horse occurs. Rule 9000(h)(3) is modified as follows: “The designated ID number of the Owner (who must be registered) of the Covered Horse or if the Covered Horse is owned by an entity, the entity name (who must be registered) shall be provided along with                           ( print page 12841)                        a designated owner of the entity who is a natural person (who must be registered).” This provision will ensure that every registered Covered Horse is associated with a registered individual. This will facilitate communication between the Authority and the registered individual and will ensure the accountability of the registered individual for the Covered Horse. Although the previous provision required that the location of the Covered Horse be provided, the new provision makes clear that the location of the Covered Horse must “be updated by the Responsible Person within twenty-four (24) hours of the Covered Horse arriving at its new location.” In addition, the modification requires that if “the Covered Horse suffers a fatal condition, the Responsible Person within three (3) days of the date of the fatality shall update the Covered Horse's status as deceased, provide the date of the fatality and an explanation regarding the cause of the fatal condition.” In order for the Authority to promote the safety, welfare, and integrity of Covered Persons and Covered Horses, and the safe conduct of Covered Horseraces, it is necessary for the Authority to know the location of Covered Horses and, if the Covered Horse has suffered a fatal condition, the fatality is reported to the Authority. The remainder of the modifications in Rule 9000(h) are stylistic edits.                

## III. Compliance With the Commission's March 27, 2023 Order

                    In accordance with the Commission's March 27, 2023 Order, the Authority states that no comments were submitted by commenters on the                     **Federal Register**                     from the original Registration Rule submission where the Authority in its June 6, 2022 letter to the Commission committed to further consider the suggestions.                

## IV. Legal Authority

This rule is proposed by the Authority for approval or disapproval by the Commission under 15 U.S.C. 3053(c)(1).

## V. Date of Effectiveness

If approved by the Commission, this proposed rule will take effect on July 1, 2024.

## VI. Request for Comments

                    Members of the public are invited to comment on the Authority's proposed rule. 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 are available for public inspection on the docket for this matter at                     *https://www.regulations.gov.*

                    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.” [10]                                          In other words, the Commission will evaluate the proposed rule 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.                

                    Although the Commission evaluates the Authority's proposed rule for its consistency with the Act and the Commission's procedural rule, the Commission may consider broader questions—about the health and safety of horses and jockeys, the integrity of horseraces and wagering on horseraces, and the administration of the Authority itself—in another context: “The Commission . . . may abrogate, add to, and modify the rules of the Authority promulgated in accordance with this chapter as the Commission finds necessary or appropriate to ensure the fair administration of the Authority, to conform the rules of the Authority to requirements of this chapter and applicable rules approved by the Commission, or otherwise in furtherance of the purposes of this chapter.” [11]                                          The Commission may exercise this rulemaking power 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 about its use of the rulemaking power, they are encouraged to submit a petition requesting that the Commission issue a rule addressing the subject of interest. The petition must meet all the criteria established in the Rules of Practice (part 1, subpart D); [12]                                          if it does, the petition will be published in the                     **Federal Register**                     for public comment. In particular, the petition for a rulemaking must “identify the problem the requested action is intended to address and explain why the requested action is necessary to address the problem.” [13] 

## 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 March 5, 2024. Write “HISA Registration Rule Modification” on your comment. Your comment—including your name and your State—will be placed on the public record of this proceeding, including the                     *https://www.regulations.gov*                     website.                

                    Postal mail addressed to the Commission is subject to delay due to heightened security screening. As a result, we strongly encourage you to submit your comments online. To make sure the Commission considers your online comment, you must file it at                     *https://www.regulations.gov,*                     by following the instructions on the web-based form.                

If you file your comment on paper, write “HISA Registration 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, Mail Stop H-144 (Annex H), Washington, DC 20580. If possible, please submit your paper comment to the Commission by overnight service.

Because your comment will be placed on the 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                           ( print page 12842)                        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 any 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 March 5, 2024. 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 Registration Rule with the proposed modifications incorporated. A redline version that shows every way in which the previously approved Registration Rule would be modified by the proposed rule modification is available as Exhibit B on the docket at                     *https://www.regulations.gov.*

## 9000. Registration of Covered Persons and Covered Horses

                    (a) Registration Requirement for Covered Persons. A Covered Person (as defined by 15 U.S.C. 3051(6)) shall register with the Authority in accordance with this rule on the Horseracing Integrity and Safety Authority website at                     *https://portal.hisausapps.org/​registration.*                     Provided, however, Owners having an ownership or beneficial interest in a horse of less than five (5) percent shall not be required to register unless such owner is or becomes a Responsible Person as defined in Rule 2010. At the end of each successive twelve-month period, calculated from the date of a Covered Person's initial registration, a Covered Person shall review the accuracy of information previously submitted on the website, and update the information as necessary. An individual who is no longer a Covered Person may request the Authority to have his or her name removed from registration with the Authority.                

(b) Information Required for Registration of Covered Persons. The following information shall be provided by all Covered Persons who register as individuals with the Authority:

(1) The Covered Person's name, physical address, and permanent mailing address;

(2) The Covered Person's email address;

(3) If the Covered Person possesses a mobile phone, the mobile phone number;

(4) Identification of all racing jurisdictions in which the Covered Person is currently licensed and the occupation(s) for which the Covered Person is licensed;

(5) If required by the Authority, an image of at least one currently valid license issued to the Covered Person by a racing regulatory authority; and

(6) Any other information reasonably required by the Authority to fulfill its statutory duties under the Act.

(c) Jockeys and Jockey Agents. Jockeys shall identify the Jockey agents who represent them. Jockey agents shall identify the Jockeys whom they represent.

(d) Veterinarians. A Covered Person who registers as a veterinarian shall also provide (i) the name and contact information for any clinic or practice that the veterinarian is associated with; and (ii) all jurisdictions in which the registrant is currently licensed by state veterinary licensing authorities and the registrant's license number for each such jurisdiction.

(e) Racetracks. A Racetrack licensed by a state racing commission to conduct Covered Horseraces (as defined by 15 U.S.C. 3051(5)) shall register with the Authority, and shall provide and update as necessary the following information:

(1) The name and contact information, including email address and direct phone number, of the Director or Officer with principal responsibility for conducting Covered Horseraces to serve as the contact person for the Racetrack;

(2) The Racetrack's physical address, mailing address, phone number and general delivery email address;

(3) Identification of the majority or controlling ownership interests of the Racetrack. Any change in the majority or controlling ownership interests or control of a Racetrack shall constitute a material change and shall be reported to the Authority within 30 days following the change; and

(4) Any other information reasonably required by the Authority to fulfill its statutory duties under the Act.

(f) Registration Exemptions. Vendors of goods or services and racetrack employees or contractors who do not have access to restricted areas of a Racetrack in the ordinary course of carrying out their duties are not required to register with the Authority. For purposes of this rule, mutuel employees are deemed not to have access to restricted areas of a Racetrack.

(g) Agreement With Respect to Authority Rules, Standards, and Procedures. Pursuant to 15 U.S.C. 3054(d) of the Act, a Covered Person who registers with the Authority shall agree to be subject to and comply with the rules, standards, and procedures of the Authority developed and approved under 15 U.S.C. 3054(c). These rules, standards, and procedures are set forth in the Rule 8000 Series.

(h) Registration of Covered Horses. Responsible Persons (as defined in Rule 2010) shall ensure that Covered Horses (as defined by 15 U.S.C. 3051(4)) are registered with the Authority on the date of the horse's first timed and reported workout at a Racetrack that participates in Covered Horseraces or at a training facility. The following information shall be provided by all Covered Persons who register horses with the Authority:

(1) The Covered Horse's name and year of birth;

(2) The name of the dam of the Covered Horse;

(3) The designated Owner (who must be registered) of the Covered Horse or if the Covered Horse is owned by an entity, the entity name (who must be registered) shall be provided along with a designated owner of the entity who is a natural person (who must be registered);

(4) The location of the Covered Horse, which shall be updated by the Responsible Person within twenty-four (24) hours of the Covered Horse arriving at its new location;

(5) The Vaccine and Health Information required by Rule 2143;

                    (6) If the Covered Horse suffers a fatal condition, the Responsible Person within three (3) days of the date of the                           ( print page 12843)                        fatality shall update the Covered Horse's status as deceased, provide the date of the fatality and an explanation regarding the cause of the fatal condition; and                

(7) Any other information reasonably required by the Authority to fulfill its statutory duties under the Act.

(i) Accuracy of and Changes to Registration Information.

(1) Complete and Correct Information. Information provided by a Covered Person in the course of registration pursuant to the Rule 9000 Series shall be complete and correct.

(2) Material Changes in Registration Information. A Covered Person registered with the Authority shall timely update registration information to accurately report any material changes in any information required for registration by the Authority, including the information required under Rule 9000(h).

(3) Penalties. As set forth in Rule 8100(g), failure to register with the Authority, failure of a Responsible Person to register a Covered Horse, knowingly making a false statement, omitting information in an application for registration with the Authority, or failure to advise the Authority of material changes in information provided to the Authority as required under any provision in Authority rules shall constitute a violation and shall be subject to the sanctions set forth in Rule 8200 and the disciplinary procedures set forth in Rule 8300.

By direction of the Commission.

April J. Tabor,

Secretary.

# Footnotes

1.                             15 U.S.C. 3051 through 3060.                    
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2.                             15 U.S.C. 3053(b)(2).                    
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3.                             15 U.S.C. 3053(b)(1).                    
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4.                             15 U.S.C. 3053(c)(1).                    
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5.                             16 CFR 1.140 through 1.144;                         *see also*                         FTC, Procedures for Submission of Rules Under the Horseracing Integrity and Safety Act, 86 FR 54819 (Oct. 5, 2021).                    
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6.                             See FTC, Notice of HISA Registration Proposed Rule (“Notice”), 87 FR 29862 (May 17, 2022).                    
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7.                             FTC, Order Approving the Registration Rule Proposed by the Horseracing Integrity and Safety Authority (June 29, 2022),                         *https://www.ftc.gov/​system/​files/​ftc_​gov/​pdf/​P222100CommissionOrderRegistrationRuleFinal.pdf.*
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8.                             FTC, Order Approving the Anti-Doping and Medication Control Rule Proposed by the Horseracing Integrity and Safety Authority at 6 (Mar. 27, 2023),                         *https://www.ftc.gov/​system/​files/​ftc_​gov/​pdf/​P222100CommissionOrderAntiDopingMedication.pdf.*
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9.                             These standards are available as Exhibit A on the docket for this publication at                         *https://www.regulations.gov.*
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10.                             15 U.S.C. 3053(c)(2).                    
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11.                             15 U.S.C. 3053(e) (as amended by the Consolidated Appropriations Act, 2023, H.R. 2617, 117th Cong., Division O, Title VII (2022)).                    
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12.                             16 CFR 1.31;                         *see*                         FTC, Procedures for Responding to Petitions for Rulemaking, 86 FR 59851 (Oct. 29, 2021).                    
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13.                             16 CFR 1.31(b)(3).                    
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[FR Doc. 2024-03301 Filed 2-16-24; 8:45 am]

BILLING CODE 6750-01-P