16 CFR Part 1 — General Procedures

PART 1—GENERAL PROCEDURES Authority: 15 U.S.C. 46; 15 U.S.C. 57a; 5 U.S.C. 552; 5 U.S.C. 601 note. Source: 32 FR 8444, June 13, 1967, unless otherwise noted. Subpart A—Industry Guidance Authority: 15 U.S.C. 46, unless otherwise noted. Advisory Opinions § 1.1 Policy. (a) Any person, partnership, or corporation may request advice from the Commission with respect to a course of action which the requesting party proposes to pursue. The Commission will consider such requests for advice and inform the requesting party of the Commission's views, where practicable, under the following circumstances. (1) The matter involves a substantial or novel question of fact or law and there is no clear Commission or court precedent; or (2) The subject matter of the request and consequent publication of Commission advice is of significant public interest. (b) The Commission has authorized its staff to consider all requests for advice and to render advice, where practicable, in those circumstances in which a Commission opinion would not be warranted. Hypothetical questions will not be answered, and a request for advice will ordinarily be considered inappropriate where: (1) The same or substantially the same course of action is under investigation or is or has been the subject of a current proceeding involving the Commission or another governmental agency, or (2) An informed opinion cannot be made or could be made only after extensive investigation, clinical study, testing, or collateral inquiry. [44 FR 21624, Apr. 11, 1979; 44 FR 23515, Apr. 20, 1979, as amended at 54 FR 14072, Apr. 7, 1989] § 1.2 Procedure. (a) Application. The request for advice or interpretation should be submitted in writing (one original and two copies) to the Secretary of the Commission and should: (1) State clearly the question(s) that the applicant wishes resolved; (2) cite the provision of law under which the question arises; and (3) state all facts which the applicant believes to be material. In addition, the identity of the companies and other persons involved should be disclosed. Letters relating to unnamed companies or persons may not be answered. Submittal of additional facts may be requested prior to the rendering of any advice. (b) Compliance matters. If the request is for advice as to whether the proposed course of action may violate an outstanding order to cease and desist issued by the Commission, such request will be considered as provided for in § 2.41 of this chapter. [44 FR 21624, Apr. 11, 1979, as amended at 44 FR 40638, July 12, 1979] § 1.3 Advice. (a) On the basis of the materials submitted, as well as any other information available, and if practicable, the Commission or its staff will inform the requesting party of its views. (b) Any advice given by the Commission is without prejudice to the right of the Commission to reconsider the questions involved and, where the public interest requires, to rescind or revoke the action. Notice of such rescission or revocation will be given to the requesting party so that he may discontinue the course of action taken pursuant to the Commission's advice. The Commission will not proceed against the requesting party with respect to any action taken in good faith reliance upon the Commission's advice under this section, where all the relevant facts were fully, completely, and accurately presented to the Commission and where such action was promptly discontinued upon notification of rescission or revocation of the Commission's approval. (c) Advice rendered by the staff is without prejudice to the right of the Commission later to rescind the advice and, where appropriate, to commence an enforcement proceeding. [44 FR 21624, Apr. 11, 1979] § 1.4 Public disclosure. Written advice rendered pursuant to this section and requests therefor, including names and details, will be placed in the Commission's public record immediately after the requesting party has received the advice, subject to any limitations on public disclosure arising from statutory restrictions, the Commission's rules, and the public interest. A request for confidential treatment of information submitted in connection with the questions should be made separately. [44 FR 21624, Apr. 11, 1979] Industry Guides § 1.5 Purpose. Industry guides are administrative interpretations of laws administered by the Commission for the guidance of the public in conducting its affairs in conformity with legal requirements. They provide the basis for voluntary and simultaneous abandonment of unlawful practices by members of industry. Failure to comply with the guides may result in corrective action by the Commission under applicable statutory provisions. Guides may relate to a practice common to many industries or to specific practices of a particular industry. § 1.6 How promulgated. Industry guides 1 1 [86 FR 59852, Oct. 29, 2021] Subpart B—Rules and Rulemaking Under Section 18(a)(1)(B) of the FTC Act Authority: 5 U.S.C. 552; 5 U.S.C. 601 note; 15 U.S.C. 46; 15 U.S.C. 57a. § 1.7 Scope of rules in this subpart. The rules in this subpart apply to and govern proceedings for the promulgation of rules as provided in section 18(a)(1)(B) of the Federal Trade Commission Act (15 U.S.C. 57a(a)(1)(B)). Such rules will be known as trade regulation rules. All other rulemaking proceedings will be governed by the rules in subpart C of this part, except as otherwise required by law or as otherwise specified in this chapter. [86 FR 38547, July 22, 2021] § 1.8 Nature, authority, and use of trade regulation rules. (a) For the purpose of carrying out the provisions of the Federal Trade Commission Act, the Commission is empowered to promulgate trade regulation rules, which define with specificity acts or practices that are unfair or deceptive acts or practices in or affecting commerce. Trade regulation rules may include requirements prescribed for the purpose of preventing such acts or practices. A violation of a rule constitutes an unfair or deceptive act or practice in violation of section 5(a)(1) of that Act (15 U.S.C. 45(a)(1)), unless the Commission otherwise expressly provides in its rule. The respondents in an adjudicative proceeding may show that the alleged conduct does not violate the rule or assert any other defense to which they are legally entitled. (b) The Commission at any time may conduct such investigations, make such studies, and hold such conferences as it may deem necessary. All or any part of any such investigation may be conducted under the provisions of part 2, subpart A of this chapter. [86 FR 38547, July 22, 2021] § 1.9 Petitions to commence trade regulation rule proceedings. Trade regulation rule proceedings may be commenced by the Commission upon its own initiative or pursuant to written petition filed with the Secretary by any interested person stating reasonable grounds therefor. Such petitions will be handled in the same manner and pursuant to the same procedures as prescribed in § 1.31 of this chapter. [86 FR 59852, Oct. 29, 2021] § 1.10 Advance notice of proposed rulemaking. (a) Prior to the commencement of any trade regulation rule proceeding, the Commission must publish in the Federal Register (b) The advance notice must: (1) Contain a brief description of the area of inquiry under consideration, the objectives which the Commission seeks to achieve, and possible regulatory alternatives under consideration by the Commission; and (2) Invite the response of interested persons with respect to such proposed rulemaking, including any suggestions or alternative methods for achieving such objectives. (c) The advance notice must be submitted to the Committee on Commerce, Science, and Transportation of the Senate and to the Committee on Energy and Commerce of the House of Representatives. (d) The Commission may, in addition to publication of the advance notice, use such additional mechanisms as it considers useful to obtain suggestions regarding the content of the area of inquiry before publication of a notice of proposed rulemaking pursuant to § 1.11. [86 FR 38547, July 22, 2021] § 1.11 Commencement of a rulemaking proceeding. (a) Notice of proposed rulemaking. Federal Register (b) Contents of NPRM. (1) A statement containing, with particularity, the text of the proposed rule, including any alternatives, which the Commission proposes to promulgate; (2) Reference to the legal authority under which the rule is proposed; (3) A statement describing the reason for the proposed rule; (4) An invitation to comment on the proposed rule, as provided in paragraph (d) of this section; (5) A list of disputed issues of material fact designated by the Commission as necessary to be resolved, if any; (6) An explanation of the opportunity for an informal hearing and instructions for submissions relating to such a hearing, as provided in paragraph (e) of this section; and (7) A statement of the manner in which the public may obtain copies of the preliminary regulatory analysis, if that analysis is not in the notice. (c) Preliminary regulatory analysis. (1) A concise statement of the need for, and the objectives of, the proposed rule; (2) A description of any reasonable alternatives to the proposed rule which may accomplish the stated objective of the rule in a manner consistent with applicable law; (3) For the proposed rule, and for each of the alternatives described in the analysis, a preliminary analysis of the projected benefits and any adverse economic effects and any other effects, and of the effectiveness of the proposed rule and each alternative in meeting the stated objectives of the proposed rule; and (4) The information required by the Regulatory Flexibility Act, 5 U.S.C. 601-612, and the Paperwork Reduction Act, 44 U.S.C. 3501-3520, if applicable. (d) Written comments. (e) Opportunity for hearing. (1) A request to make an oral submission, if desired; (2) A statement identifying the interested person's interests in the proceeding; and (3) Any proposals to add disputed issues of material fact beyond those identified in the notice. [86 FR 38548, July 22, 2021] § 1.12 Notice of informal hearing and designations. (a) Initial notice of informal hearing. Federal Register. (1) The designation of a presiding officer, pursuant to § 1.13(a)(1); (2) The time and place of the informal hearing; (3) A final list of disputed issues of material fact necessary to be resolved during the hearing, if any; (4) A list of the interested persons who will make oral presentations; (5) A list of the groups of interested persons determined by the Commission to have the same or similar interests in the proceeding; (6) An invitation to interested persons to submit requests to conduct or have conducted cross-examination or to present rebuttal submissions, pursuant to § 1.13(b)(2), if desired; and (7) Any other procedural rules necessary to promote the efficient and timely determination of the disputed issues to be resolved during the hearing. (b) Requests to conduct cross-examination or present rebuttal submissions. (1) An issue for cross-examination or the presentation of rebuttal submissions, is an issue of specific fact in contrast to legislative fact; (2) A full and true disclosure with respect to the issue can be achieved only through cross-examination rather than through rebuttal submissions or the presentation of additional oral submissions; and (3) The particular cross-examination or rebuttal submission is required for the resolution of a disputed issue. (c) Final notice of informal hearing. Federal Register. (1) A list of the interested persons who will conduct cross-examination regarding disputed issues of material fact; (2) A list of any groups of interested persons with the same or similar interests in the proceeding who will be required to choose a single representative to conduct cross-examination on behalf of the group, as provided in paragraph (d) of this section; and (3) A list of the interested persons who will be permitted to make rebuttal submissions regarding disputed issues of material fact. (d) Designation of group representatives for cross-examination. [86 FR 38548, July 22, 2021] § 1.13 Conduct of informal hearing by the presiding officer. (a) Presiding officer Designation. (2) Powers of the presiding officer. (i) To issue any public notice that may be necessary for the orderly conduct of the informal hearing; (ii) To modify the location, format, or time limits prescribed for the informal hearing, except that the presiding officer may not increase the time allotted for an informal hearing beyond a total of five hearing days over the course of a thirty-day period, unless the Commission, upon a showing of good cause, extends the number of days for the hearing; (iii) To prescribe procedures or issue rulings to avoid unnecessary costs or delay, including, but not limited to, the imposition of reasonable time limits on the number and duration of oral presentations from individuals or groups with the same or similar interests in the proceeding and requirements that any cross-examination, which a person may be entitled to conduct or have conducted, be conducted by the presiding officer on behalf of that person in such a manner as the presiding officer determines to be appropriate and to be required for a full and true disclosure with respect to any issue designated for consideration in accordance with § 1.13(b)(1); (iv) To issue rulings selecting or modifying the designated representatives of groups of interested persons, as provided in paragraph (a)(3) of this section; (v) To require that oral presentations at the informal hearing be under oath; (vi) To require that oral presentations at the informal hearing be submitted in writing in advance of presentation; and (viii) To rule on all requests of interested persons made during the course of the informal hearing. (3) Selection or modification of group representatives. (4) Organization. (5) Ex parte communications. (b) Additional procedures when there are disputed issues of material fact. (1) Nature of issues for consideration in accordance with § 1.13(b)(2) Issues that must be considered in accordance with § 1.13(b)(2). (ii) Addition or modification of issues for consideration in accordance with § 1.13(b)(2). (2) Cross-examination and the presentation of rebuttal submissions by interested persons. (c) Written transcript. (d) Recommended decision. (e) Post-hearing review by the Commission of rulings by the presiding officer. (2) The Commission may, in its discretion, hear the appeal. Commission review, if granted, will be based on the petition and anything on the rulemaking record, without oral argument or further briefs, unless otherwise ordered by the Commission. If the Commission grants review, it will render a decision within thirty days of the announcement of its decision to review unless, upon a showing of good cause, the Commission extends the number of days for review. [86 FR 38549, July 22, 2021, as amended at 88 FR 42874, July 5, 2023] § 1.14 Promulgation. (a) The Commission, after review of the rulemaking record, may issue, modify, or decline to issue any rule. If the Commission wants further information or additional views of interested persons, it may withhold final action pending the receipt of such additional information or views. If it determines not to issue a rule, it may adopt and publish an explanation for not doing so. (1) Statement of basis and purpose. (i) A statement regarding the prevalence of the acts or practices treated by the rule; (ii) A statement as to the manner and context in which such acts or practices are unfair or deceptive; and (iii) A statement as to the economic effect of the rule, taking into account the effect on small businesses and consumers. (2) Final regulatory analysis. (i) A concise statement of the need for, and the objectives of, the final rule; (ii) A description of any alternatives to the final rule that were considered by the Commission; (iii) An analysis of the projected benefits and any adverse economic effects and any other effects of the final rule; (iv) An explanation of the reasons for the determination of the Commission that the final rule will attain its objectives in a manner consistent with applicable law and the reasons the particular alternative was chosen; (v) A summary of any significant issues raised by the comments submitted during the public comment period in response to the preliminary regulatory analysis, and a summary of the assessment by the Commission of such issues; and (vi) The information required by the Regulatory Flexibility Act, 5 U.S.C. 601-612, and the Paperwork Reduction Act, 44 U.S.C. 3501-3520, if applicable. (3) Small entity compliance guide. (b) If the Commission determines, upon its review of the rulemaking record, to propose a revised rule for further proceedings in accordance with this subpart, such proceedings, including the opportunity of interested persons to avail themselves of the procedures of § 1.13(b)(2), will be limited to those portions of the revised rule, the subjects and issues of which were not substantially the subject of comment in response to a previous notice of proposed rulemaking. (c) The final rule will be published in the Federal Register [86 FR 38550, July 22, 2021] § 1.15 Amendment or repeal of a rule. (a) Substantive amendment or repeal of a rule. (b) Nonsubstantive amendment of a rule. Federal Register. [46 FR 26289, May 12, 1981] § 1.16 Petition for exemption from trade regulation rule. Any person to whom a rule would otherwise apply may petition the Commission for an exemption from such rule. Petitions for exemptions will be handled in the same manner and pursuant to the same procedures as prescribed in § 1.31 of this chapter. [86 FR 59852, Oct. 29, 2021] § 1.17 [Reserved] § 1.18 Rulemaking record. (a) Definition. (b) Public availability. (c) Communications to Commissioners and Commissioners' personal staffs Communications by outside parties. (i) Written communications. (ii) Oral communications. (iii) Congressional communications. (2) Communications by certain officers, employees, and agents of the Commission. [86 FR 38550, July 22, 2021] § 1.19 Modification of a rule by the Commission at the time of judicial review. If a reviewing court orders, under section 18(e)(2) of the Federal Trade Commission Act (15 U.S.C. 57a(e)(2)), further submissions and presentations on the rule, the Commission may modify or set aside its rule or make a new rule by reason of the additional submissions and presentations. Such modified or new rule will then be filed with the court together with an appropriate statement of basis and purpose and the return of such submissions and presentations. [86 FR 38551, July 22, 2021] § 1.20 Alternative procedures. If the Commission determines at the commencement of a rulemaking proceeding to employ procedures other than those established in this subpart, it may do so by announcing those procedures in the Federal Register [86 FR 38551, July 22, 2021] Subpart C—Rules Promulgated Under Authority Other Than Section 18(a)(1)(B) of the FTC Act Authority: 15 U.S.C. 46; 5 U.S.C. 601 note. § 1.21 Scope of the rules in this subpart. This subpart sets forth procedures for the promulgation of rules under authority other than section 18(a)(1)(B) of the FTC Act except as otherwise required by law or otherwise specified in the rules of this chapter. This subpart does not apply to the promulgation of industry guides, general statements of policy, rules of agency organization, procedure, or practice, or rules governed by subpart B of this part. [50 FR 53304, Dec. 31, 1985] § 1.22 Rulemaking. (a) Nature and authority. (b) Scope. (c) Use of rules in adjudicative proceedings. [40 FR 15232, Apr. 4, 1975, as amended at 88 FR 42874, July 5, 2023] § 1.23 Quantity limit rules. Quantity limit rules are authorized by section 2(a) of the Clayton Act, as amended by the Robinson-Patman Act. These rules have the force and effect of law. [32 FR 8444, June 13, 1967. Redesignated at 40 FR 15232, Apr. 4, 1975] § 1.24 Rules applicable to wool, fur, and textile fiber products and rules promulgated under the Fair Packaging and Labeling Act. Rules having the force and effect of law are authorized under section 6 of the Wool Products Labeling Act of 1939, section 8 of the Fur Products Labeling Act, section 7 of the Textile Fiber Products Identification Act, and sections 4, 5, and 6 of the Fair Packaging and Labeling Act. [40 FR 15233, Apr. 4, 1975] § 1.25 Initiation of rulemaking proceedings—petitions. Proceedings for the issuance, amendment, or repeal of rules issued pursuant to authorities other than Section 18(a)(1)(B) of the FTC Act (15 U.S.C. 57a(1)(B)), including proceedings for exemption of products or classes of products from statutory requirements, may be commenced by the Commission upon its own initiative or pursuant to petition. Such petitions will be handled in the same manner and pursuant to the same procedures as prescribed in § 1.31 of this chapter. [86 FR 59852, Oct. 29, 2021] § 1.26 Procedure. (a) Investigations and conferences. (b) Notice. Federal Register (1) A statement of the time, place, and nature of the public proceedings; (2) Reference to the authority under which the rule is proposed; (3) Either the terms or substance of the proposed rule or description of the subjects and issues involved; (4) An opportunity for interested persons to participate in the proceeding through the submission of written data, views, or arguments; and (5) A statement setting forth such procedures for treatment of communications from persons not employed by the Commission to Commissioners or Commissioner Advisors with respect to the merits of the proceeding as will incorporate the requirements of § 1.18(c), including the transcription of oral communications required by § 1.18(c)(1)(ii), adapted in such form as may be appropriate to the circumstances of the particular proceeding. (c) Oral hearings. (d) Promulgation of rules or orders. Federal Register Federal Register (e) Effective date of rules. Federal Register, (f) Effective date of rules and orders under Fair Packaging and Labeling Act. Federal Register, (g) Objections and request for hearing under Fair Packaging and Labeling Act. Federal Register (1) If they establish that the objector will be adversely affected by the order; (2) If they specify with particularity the provisions of the order to which objection is taken; and (3) If they are supported by reasonable grounds which, if valid and factually supported, may be adequate to justify the relief sought. Anyone who files objections which are not deemed by the Commission sufficient to warrant the holding of a public hearing will be promptly notified of that determination. As soon as practicable after the time for filing objections has expired, the Commission will publish a notice in the Federal Register [32 FR 8444, June 13, 1967. Redesignated at 40 FR 15232, Apr. 4, 1975, as amended at 44 FR 16368, Mar. 19, 1979; 50 FR 53304, Dec. 31, 1985; 63 FR 36340, July 6, 1998; 88 FR 42874, July 5, 2023] Subpart D—Petitions for Rulemaking or Exemption Authority: 15 U.S.C. 46; 15 U.S.C. 57a; 5 U.S.C. 601 note. Source: 86 FR 59852, Oct. 29, 2021, unless otherwise noted. § 1.31 Procedures for addressing petitions. (a) Petitions for rulemaking. (b) Requirements. (1) The petitioner's full name, address, telephone number, and email address (if available), along with an explanation of how the petitioner's interests would be affected by the requested action; (2) A full statement of the action requested by the petitioner, including the text and substance of the proposed rule or amendment, or a statement identifying the rule proposed to be repealed, and citation to any existing Commission rules that would be affected by the requested action; (3) A full statement of the factual and legal basis on which the petitioner relies for the action requested in the petition, including all relevant facts, views, argument, and data upon which the petitioner relies, as well as information known to the petitioner that is unfavorable to the petitioner's position. The statement should identify the problem the requested action is intended to address and explain why the requested action is necessary to address the problem. (c) Supporting data. (1) Professional journal articles, (2) Research reports, (3) Official government statistics, (4) Official government reports, (5) Industry data, and (6) Scientific textbooks. (d) Filing. [email protected] (e) Confidential treatment. (f) Notice and public comment. Federal Register https://www.regulations.gov. Federal Register (g) Resolution of petitions. Federal Register [86 FR 59852, Oct. 29, 2021] Subpart E—Export Trade Associations § 1.41 Limited antitrust exemption. The Export Trade Act authorizes the organization and operation of export trade associations, and extends to them certain limited exemptions from the Sherman Act and the Clayton Act. It also extends the jurisdiction of the Commission under the Federal Trade Commission Act to unfair methods of competition used in export trade against competitors engaged in export trade, even though the acts constituting such unfair methods are done without the territorial jurisdiction of the United States. § 1.42 Notice to Commission. To obtain the exemptions afforded by the Act, an export trade association is required to file with the Commission, within thirty (30) days after its creation, a verified written statement setting forth the location of its offices and places of business, names, and addresses of its officers, stockholders, or members, and copies of its documents of incorporation or association. On the first day of January of each year thereafter, each association must file a like statement and, when required by the Commission to do so, must furnish to the Commission detailed information as to its organization, business, conduct, practices, management, and relation to other associations, corporations, partnerships, and individuals. § 1.43 Recommendations. Whenever the Commission has reason to believe that an association has violated the prohibitions of section 2 of the Act, it may conduct an investigation. If, after investigation, it concludes that the law has been violated, it may make to such association recommendations for the readjustment of its business. If the association fails to comply with the recommendations, the Commission will refer its findings and recommendations to the Attorney General for appropriate action. Subpart F—Trademark Cancellation Procedure § 1.51 Applications. Applications for the institution of proceedings for the cancellation of registration of trade, service, or certification marks under the Trade-Mark Act of 1946 may be filed with the Secretary of the Commission. Such applications shall be in writing, signed by or in behalf of the applicant, and should identify the registration concerned and contain a short and simple statement of the facts constituting the alleged basis for cancellation, the name and address of the applicant, together with all relevant and available information. If, after consideration of the application, or upon its own initiative, the Commission concludes that cancellation of the mark may be warranted, it will institute a proceeding before the Commissioner of Patents for cancellation of the registration. Subpart G—Injunctive and Condemnation Proceedings § 1.61 Injunctions. In those cases where the Commission has reason to believe that it would be to the interest of the public, the Commission will apply to the courts for injunctive relief, pursuant to the authority granted in section 13 of the Federal Trade Commission Act. [40 FR 15233, Apr. 4, 1975] § 1.62 Ancillary court orders pending review. Where petition for review of an order to cease and desist has been filed in a U.S. court of appeals, the Commission may apply to the court for issuance of such writs as are ancillary to its jurisdiction or are necessary in its judgment to prevent injury to the public or to competitors pendente lite. § 1.63 Injunctions: Wool, fur, and textile cases. In those cases arising under the Wool Products Labeling Act of 1939, Fur Products Labeling Act, and Textile Fiber Products Identification Act, where it appears to the Commission that it would be to the public interest for it to do so, the Commission will apply to the courts for injunctive relief, pursuant to the authority granted in such Acts. [32 FR 8444, June 13, 1967, as amended at 41 FR 4814, Feb. 2, 1976] § 1.64 Condemnation proceedings. In those cases arising under the Wool Products Labeling Act of 1939 and Fur Products Labeling Act, and where it appears to the Commission that the public interest requires such action, the Commission will apply to the courts for condemnation, pursuant to the authority granted in such Acts. [32 FR 8444, June 13, 1967, as amended at 41 FR 4814, Feb. 2, 1976] Subpart H—Administration of the Fair Credit Reporting Act Authority: 84 Stat. 1128, 15 U.S.C. 1681 et seq. § 1.71 Administration. The general administration of the Fair Credit Reporting Act (Title VI of the Consumer Credit Protection Act of 1968; enacted October 26, 1970; Pub. L. 91-508, 82 Stat. 146, 15 U.S.C. 1601 et seq. [36 FR 9293, May 22, 1971, as amended at 36 FR 18788, Sept. 22, 1971; 38 FR 32438, Nov. 26, 1973; 46 FR 26290, May 12, 1981; 88 FR 42874, July 5, 2023] § 1.72 Examination, counseling and staff advice. The Commission maintains a staff to carry out on-the-scene examination of records and procedures utilized to comply with the Fair Credit Reporting Act and to carry out industry counseling. Requests for staff interpretation of the Fair Credit Reporting Act should be directed to the Division of Credit Practices, Bureau of Consumer Protection. Such interpretations represent informal staff opinion which is advisory in nature and is not binding upon the Commission as to any action it may take in the matter. Administrative action to effect correction of minor infractions on a voluntary basis is taken in those cases where such procedure is believed adequate to effect immediate compliance and protect the public interest. [36 FR 9293, May 22, 1971, as amended at 36 FR 18788, Sept. 22, 1971; 38 FR 32438, Nov. 26, 1973; 46 FR 26290, May 12, 1981] § 1.73 Interpretations. (a) Nature and purpose. Federal Register (2) The interpretations are not substantive rules and do not have the force or effect of statutory provisions. They are guidelines intended as clarification of the Fair Credit Reporting Act, and, like industry guides, are advisory in nature. They represent the Commission's view as to what a particular provision of the Fair Credit Reporting Act means for the guidance of the public in conducting its affairs in conformity with that Act, and they provide the basis for voluntary and simultaneous abandonment of unlawful practices by members of industry. Failure to comply with such interpretations may result in corrective action by the Commission under applicable statutory provisions. (b) Procedure. Federal Register Federal Register (2) The issuance of such interpretations is within the discretion of the Commission and the Commission at any time may conduct such investigations and hold such conferences or hearings as it may deem appropriate. Any interpretation issued pursuant to this chapter is without prejudice to the right of the Commission to reconsider the interpretation, and where the public interest requires, to rescind, revoke, modify, or withdraw the interpretation, in which event notification of such action will be published in the Federal Register. (c) Applicability of interpretations. [36 FR 9293, May 22, 1971, as amended at 88 FR 42874, July 5, 2023] Subpart I—Procedures for Implementation of the National Environmental Policy Act of 1969 Authority: 15 U.S.C. 46(g), 42 U.S.C. 4321 et seq. Source: 47 FR 3096, Jan. 22, 1982, unless otherwise noted. § 1.81 Authority and incorporation of CEQ Regulations. This subpart is issued pursuant to 102(2) of the National Environmental Policy Act of 1969 (NEPA), as amended (42 U.S.C. 4321 et seq. et seq. [47 FR 3096, Jan. 22, 1982, as amended at 50 FR 53304, Dec. 31, 1985] § 1.82 Declaration of policy. (a) Except for actions which are not subject to the requirements of section 102(2)(C) of NEPA, no Commission proposal for a major action significantly affecting the quality of the human environment will be instituted unless an environmental impact statement has been prepared for consideration in the decisionmaking. All relevant environmental documents, comments, and responses as provided in this subpart shall accompany such proposal through all review processes. “Major actions, significantly affecting the quality of the human environment” referred to in this subpart “do not include bringing judicial or administrative civil or criminal enforcement actions” CEQ Regulation (40 CFR 1508.18(a)). In the event that the Commission in an administrative enforcement proceeding actively contemplates the adoption of standards or a form of relief which it determines may have a significant effect on the environment, the Commission will, when consistent with the requirements of law, provide for the preparation of an environmental assessment or an environmental impact statement or such other action as will permit the Commission to assess alternatives with a view toward avoiding or minimizing any adverse effect upon the environment. (b) No Commission proposal for legislation significantly affecting the quality of the human environment and concerning a subject matter in which the Commission has primary responsibility will be submitted to Congress without an accompanying environmental impact statement. (c) When the Commission finds that emergency action is necessary and an environmental impact statement cannot be prepared in conformance with the CEQ Regulations, the Commission will consult with CEQ about alternative arrangements in accordance with CEQ Regulation (40 CFR 1506.11). § 1.83 Whether to commence the process for an environmental impact statement. (a) The Bureau responsible for submitting a proposed rule, guide, or proposal for legislation to the Commission for agency action shall, after consultation with the Office of the General Counsel, initially determine whether or not the proposal is one which requires an environmental impact statement. Except for matters where the environmental effects, if any, would appear to be either (1) clearly significant and therefore the decision is made to prepare an environmental impact statement, or (2) so uncertain that environmental analysis would be based on speculation, the Bureau should normally prepare an “environmental assessment” CEQ Regulation (40 CFR 1508.9) for purposes of providing sufficient evidence and analysis for determining whether to prepare an environmental impact statement or a finding of no significant impact. The Bureau should involve environmental agencies to the extent practicable in preparing an assessment. An environmental assessment shall be made available to the public when the proposed action is made public along with any ensuing environmental impact statement or finding of no significant impact. (b) If the Bureau determines that the proposal is one which requires an environmental impact statement, it shall commence the “scoping process” CEQ Regulation (40 CFR 1501.7) except that the impact statement which is part of a proposal for legislation need not go through a scoping process but shall conform to CEQ Regulation (40 CFR 1506.8). As soon as practicable after its decision to prepare an environmental impact statement and before the scoping process, the Bureau shall publish a notice of intent as provided in CEQ Regulations (40 CFR 1501.7 and 1508.22). (c) If, on the basis of an environmental assessment, the determination is made not to prepare a statement, a finding of “no significant impact” shall be made in accordance with CEQ Regulation (40 CFR 1508.3) and shall be made available to the public as specified in CEQ Regulation (40 CFR 1506.6). § 1.84 Draft environmental impact statements: Availability and comment. Except for proposals for legislation, environmental impact statements shall be prepared in two stages: Draft statement and final statement. (a) Proposed rules or guides. Federal Register (2) The major decision points with respect to rules and guides are: (i) Preliminary formulation of a staff proposal; (ii) The time the proposal is initially published in the Federal Register (iii) Presiding officer's report (in trade regulation rule proceedings); (iv) Submission to the Commission of the staff report or recommendation for final action on the proposed guide or rule; (v) Final decision by the Commission. The decision on whether or not to prepare an environmental impact statement should occur at point (a)(2)(i) of this section. The publication of any draft impact statement should occur at point (a)(2)(ii) of this section. The publication of the final environmental impact statement should occur at point (a)(2)(iv) of this section. (b) Legislative proposals. (c) In rule or guide proceedings the draft environmental impact statement shall be prepared in accordance with CEQ Regulation (40 CFR 1502.9) and shall be placed in the public record to which it pertains; in legislative matters, the legislative impact statement shall be placed in a public record to be established, containing the legislative report to which it pertains; these will be available to the public through the Office of the Secretary and will be published in full with the appropriate proposed rule, guide, or legislative report; such statements shall also be filed with the Environmental Protection Agency's (EPA) Office of Environmental Review (CEQ Regulation (40 CFR 1506.9)) for listing in the weekly Federal Register (d) Forty-five (45) days will be allowed for comment on the draft environmental impact statement, calculated from the date of publication in the EPA's weekly Federal Register § 1.85 Final environmental impact statements. (a) After the close of the comment period, the Bureau responsible for the matter will consider the comments received on the draft environmental impact statement and will put the draft statement into final form in accordance with the requirements of CEQ Regulation (40 CFR 1502.9(b)), attaching the comments received (or summaries if response was exceptionally voluminous). (b) Upon Bureau approval of the final environmental impact statement the final statement will be (1) Filed with the EPA; (2) Forwarded to all parties which commented on the draft environmental impact statement and to other interested parties, if practicable; (3) Placed in the public record of the proposed rule or guide proceeding or legislative matter to which it pertains; (4) Distributed in any other way which the Bureau in consultation with CEQ deems appropriate. (c) In rule and guide proceedings, at least thirty (30) days will be allowed for comment on the final environmental impact statement, calculated from the date of publication in the EPA's weekly Federal Register § 1.86 Supplemental statements. Except for proposals for legislation, as provided in CEQ Regulation (40 CFR 1502.9(c)), the Commission shall publish supplements to either draft or final environmental statements if: (a) The Commission makes substantial changes in the proposed action that are relevant to environmental concerns; or (b) There are significant new circumstances or information relevant to environmental concerns and bearing on the proposed action and its impacts. In the course of a trade regulation rule proceeding, the supplement will be placed in the rulemaking record. § 1.87 NEPA and agency decisionmaking. In its final decision on the proposed action or, if appropriate, in its recommendation to Congress, the Commission shall consider all the alternatives in the environmental impact statement and other relevant environmental documents and shall prepare a concise statement which, in accordance with CEQ Regulation § 1505.2, shall: (a) Identify all alternatives considered by the Commission in reaching its decision or recommendation, specifying the alternatives which were considered to be environmentally preferable; (b) State whether all practicable means to avoid or minimize environmental harm from the alternative selected have been adopted, and if not, why they were not. § 1.88 Implementing procedures. (a) The General Counsel is designated the official responsible for coordinating the Commission's efforts to improve environmental quality. He will provide assistance to the staff in determining when an environmental impact statement is needed and in its preparation. (b) The Commission will determine finally whether an action complies with NEPA. (c) The Directors of the Bureaus of Consumer Protection and Competition will supplement these procedures for their Bureaus to assure that every proposed rule and guide is reviewed to assess the need for an environmental impact statement and that, where need exists, an environmental impact statement is developed to assure timely consideration of environmental factors. (d) The General Counsel will establish procedures to assure that every legislative proposal on a matter for which the Commission has primary responsibility is reviewed to assess the need for an environmental impact statement and that, where need exists, and environmental impact statement is developed to assure timely consideration of environmental factors. (e) Parties seeking information or status reports on environmental impact statements and other elements of the NEPA process, should contact the Assistant General Counsel for Litigation and Environmental Policy. § 1.89 Effect on prior actions. It is the policy of the Commission to apply these procedures to the fullest extent possible to proceedings which are already in progress. Subpart J—Economic Surveys, Investigations and Reports § 1.91 Authority and purpose. General and special economic surveys, investigations, and reports are made by the Bureau of Economics under the authority of the various laws which the Federal Trade Commission administers. The Commission may in any such survey or investigation invoke any or all of the compulsory processes authorized by law. [32 FR 8444, June 13, 1967. Redesignated at 40 FR 15233, Apr. 4, 1975] Subpart K—Penalties for Violation of Appliance Labeling Rules Source: 45 FR 67318, Oct. 10, 1980, unless otherwise noted. § 1.92 Scope. The rules in this subpart apply to and govern proceedings for the assessment of civil penalties for the violation of section 332 of the Energy Policy and Conservation Act, 42 U.S.C. 6302, and the Commission's Rules on Labeling and Advertising of Consumer Appliances, 16 CFR part 305, promulgated under sections 324 and 326 of the Energy Policy and Conservation Act, 42 U.S.C. 6294 and 6296. § 1.93 Notice of proposed penalty. (a) Notice. (1) Inform such person of the opportunity to elect in writing within 30 days of receipt of the notice of proposed penalty to have procedures of § 1.95 (in lieu of those of § 1.94) apply with respect to such assessment; and (2) Include a copy of a proposed complaint conforming to the provision of § 3.11(b) (1) and (2) of the Commission's Rules of Practice, or a statement of the material facts constituting the alleged violation and the legal basis for the proposed penalty; and (3) Include the amount of the proposed penalty; and (4) Include a statement of the procedural rules that the Commission will follow if respondent elects to proceed under § 1.94 unless the Commission chooses to follow subparts B, C, D, E, and F of part 3 of this chapter. (b) Election. § 1.94 Commission proceeding to assess civil penalty. If the respondent fails to elect to have the procedures of § 1.95 apply, the Commission shall determine whether to issue a complaint and thereby commence an adjudicative proceeding in conformance with section 333(d)(2)(A) of the Energy Policy and Conservation Act, 42 U.S.C. 6303(d)(2)(A). If the Commission votes to issue a complaint, the proceeding shall be conducted in accordance with subparts B, C, D, E and F of part 3 of this chapter, unless otherwise ordered in the notice of proposed penalty. In assessing a penalty, the Commission shall take into account the factors listed in § 1.97. § 1.95 Procedures upon election. (a) After receipt of the notification of election to apply the procedures of this section pursuant to § 1.93, the Commission shall promptly assess such penalty as it deems appropriate, in accordance with § 1.97. (b) If the civil penalty has not been paid within 60 calendar days after the assessment order has been issued under paragraph (a) of this section, the General Counsel, unless otherwise directed, shall institute an action in the appropriate district court of the United States for an order enforcing the assessment of the civil penalty. (c) Any election to have this section apply may not be revoked except with the consent of the Commission. § 1.96 Compromise of penalty. The Commission may compromise any penalty or proposed penalty at any time, with leave of court when necessary, taking into account the nature and degree of violation and the impact of a penalty upon a particular respondent. § 1.97 Amount of penalty. All penalties assessed under this subchapter shall be in the amount per violation as described in section 333(a) of the Energy Policy and Conservation Act, 42 U.S.C. 6303(a), adjusted for inflation pursuant to § 1.98, unless the Commission otherwise directs. In considering the amount of penalty, the Commission shall take into account: (a) Respondent's size and ability to pay; (b) Respondent's good faith; (c) Any history of previous violations; (d) The deterrent effect of the penalty action; (e) The length of time involved before the Commission was made aware of the violation; (f) The gravity of the violation, including the amount of harm to consumers and the public caused by the violation; and (g) Such other matters as justice may require. [32 FR 8444, June 13, 1967, as amended at 61 FR 54548, Oct. 21, 1996] Subpart L—Civil Penalty Adjustments Under the Federal Civil Penalties Inflation Adjustment Act of 1990, as Amended Authority: 28 U.S.C. 2461 note. § 1.98 Adjustment of civil monetary penalty amounts. This section makes inflation adjustments in the dollar amounts of civil monetary penalties provided by law within the Commission's jurisdiction. The following maximum civil penalty amounts apply only to penalties assessed after January 17, 2025, including those penalties whose associated violation predated January 17, 2025. (a) Section 7A(g)(1) of the Clayton Act, 15 U.S.C. 18a(g)(1)—$53,088; (b) Section 11( l l (c) Section 5( l l (d) Section 5(m)(1)(A) of the FTC Act, 15 U.S.C. 45(m)(1)(A)—$53,088; (e) Section 5(m)(1)(B) of the FTC Act, 15 U.S.C. 45(m)(1)(B)—$53,088; (f) Section 10 of the FTC Act, 15 U.S.C. 50—$698; (g) Section 5 of the Webb-Pomerene (Export Trade) Act, 15 U.S.C. 65—$698; (h) Section 6(b) of the Wool Products Labeling Act, 15 U.S.C. 68d(b)—$698; (i) Section 3(e) of the Fur Products Labeling Act, 15 U.S.C. 69a(e)—$698; (j) Section 8(d)(2) of the Fur Products Labeling Act, 15 U.S.C. 69f(d)(2)—$698; (k) Section 333(a) of the Energy Policy and Conservation Act, 42 U.S.C. 6303(a)—$575; (l) Sections 525(a) and (b) of the Energy Policy and Conservation Act, 42 U.S.C. 6395(a) and (b), respectively—$28,205 and $53,088, respectively; (m) Section 621(a)(2) of the Fair Credit Reporting Act, 15 U.S.C. 1681s(a)(2)—$4,983; (n) Section 1115(a) of the Medicare Prescription Drug Improvement and Modernization Act of 2003, Public Law 108-173, as amended by Public Law 115-263, 21 U.S.C. 355 note—$18,768; (o) Section 814(a) of the Energy Independence and Security Act of 2007, 42 U.S.C. 17304—$1,510,803; and (p) Civil monetary penalties authorized by reference to the Federal Trade Commission Act under any other provision of law within the jurisdiction of the Commission—refer to the amounts set forth in paragraphs (c), (d), (e) and (f) of this section, as applicable. [90 FR 5581, Jan. 17, 2025] Subpart M—Submissions Under the Small Business Regulatory Enforcement Fairness Act Authority: 5 U.S.C. 801-804. § 1.99 Submission of rules, guides, interpretations, and policy statements to Congress and the Comptroller General. Whenever the Commission issues or substantively amends a rule or industry guide or formally adopts an interpretation or policy statement that constitutes a “rule” within the meaning of 5 U.S.C. 804(3), a copy of the final rule, guide, interpretation or statement, together with a concise description, the proposed effective date, and a statement of whether the rule, guide, interpretation or statement is a “major rule” within the meaning of 5 U.S.C. 804(2), will be transmitted to each House of Congress and to the Comptroller General. The material transmitted to the Comptroller General will also include any additional relevant information required by 5 U.S.C. 801(a)(1)(B). This provision generally applies to rules issued or substantively amended pursuant to § 1.14(c), § 1.15(a), § 1.19, or § 1.26(d); industry guides issued pursuant to § 1.6; interpretations and policy statements formally adopted by the Commission; and any rule of agency organization, practice or procedure that substantially affects the rights or obligations of non-agency parties. [63 FR 36340, July 8, 1998] Subpart N—Administrative Wage Garnishment § 1.100 Administrative wage garnishment. (a) General. (b) Hearing official. [75 FR 68418, Nov. 8, 2010, as amended at 81 FR 2742, Jan. 19, 2016] Subpart O—OMB Control Numbers for Commission Information Collection Requirements Authority: 44 U.S.C. 3501-3521. § 1.101 OMB control numbers assigned pursuant to the Paperwork Reduction Act. (a) Purpose. (b) Display. Current OMB control number 16 CFR part where the information collection requirement is located (or alternate part(s) if issued by another agency, co-enforced by the Federal Trade Commission) 0005 801-803. 0025 453. 0068 306. 0069 305. 0085 12 CFR part 205; 12 CFR part 1005. 0086 12 CFR part 213; 12 CFR part 1013. 0087 12 CFR part 202; 12 CFR part 1002. 0088 12 CFR part 226; 12 CFR part 1026. 0094 309. 0097 310. 0099 301. 0100 300. 0101 303. 0102 308. 0103 423. 0104 425. 0105 432. 0106 435. 0107 436. 0108 455. 0109 460. 0110 500-503. 0111 701. 0112 702. 0113 703. 0117 312. 0121 313. 0127 315. 0128 12 CFR 1022.136; 12 CFR 1022.137. 0131 680; 12 CFR 1022.20. 0132 642; 12 CFR 1022.54. 0137 641; 681. 0142 437. 0144 660; 12 CFR 1022.42; 12 CFR 1022.43. 0145 640; 12 CFR 1022.70. 0150 318. 0156 12 CFR part 1014. 0157 12 CFR part 1015. [78 FR 65558, Nov. 1, 2013] §§ 1.102-1.109 [Reserved] Subpart P—Administrative Debt Collection, Including Administrative Offset Authority: 31 U.S.C. 3701 et seq. Source: 81 FR 2742, Jan. 19, 2016, unless otherwise noted. § 1.110 Application of Government-wide administrative claims collections standards and adoption of administrative offset regulations. (a) The Commission shall apply the Federal Claims Collection Standards (FCCS), 31 CFR parts 900-904, in the administrative collection, offset, compromise, suspension, termination, and referral of collection activity for civil claims for money, funds, or property, as defined by 31 U.S.C. 3701(b), unless specific Federal agency statutes or regulations apply to such activities or, as provided for by Title 11 of the United States Code, when the claims involve bankruptcy. The Commission shall also follow Department of Treasury regulations set forth at 31 CFR part 285, as applicable, for administrative debt collection, including centralized offset of federal payments to collect non-tax debts that may be owed to the Commission, 31 CFR 285.5. Nothing in this subpart shall be construed to supersede or require the Commission to provide additional notice or other procedures that may have already been provided or afforded to a debtor in the course of administrative or judicial litigation or otherwise. (b) For purposes of 31 U.S.C. 3716(b)(1), the Commission adopts without change the regulations on collection by administrative offset set forth at 31 CFR 901.3 and other relevant sections of the FCCS applicable to such offset. §§ 1.111-1.119 [Reserved] Subpart Q—Tax Refund Offset Authority: 31 U.S.C. 3716 and 3720A, 31 CFR 285.2(c). Source: 81 FR 2742, Jan. 19, 2016, unless otherwise noted. § 1.120 Purpose. This subpart establishes procedures for the Commission's referral of past-due legally enforceable debts to the Department of the Treasury's Bureau of the Fiscal Service (Fiscal Service) for offset against the tax refund payments of the debtor, consistent with applicable Fiscal Service regulations and definitions set forth in 31 CFR 285.2 and 285.5. § 1.121 Notification of intent to collect. (a) Notification before tax refund offset. (b) Contents of notice. (1) The amount of the debt; (2) That unless the debt is repaid within 60 days from the date of the notice, the Commission intends to collect the debt by requesting a reduction of any amounts payable to the debtor as a Federal tax refund payment by an amount equal to the amount of the debt and all accumulated interest and other charges; (3) That the debtor, within 60 days from the date of the notice, has an opportunity to make a written agreement to repay the amount of the debt, unless such opportunity has previously been provided; (4) A mailing address for forwarding any written correspondence and a contact name and a telephone number for any questions; and (5) That the debtor may present evidence to the Commission that all or part of the debt is not past due or legally enforceable by: (i) Sending a written request for a review of the evidence to the address provided in the notice; (ii) Stating in the request the amount disputed and the reasons why the debtor believes that the debt is not past due or is not legally enforceable; and (iii) Including in the request any documents that the debtor wishes to be considered or stating that the additional information will be submitted within the remainder of the 60-day period. (c) A debtor may dispute the existence or amount of the debt or the terms of repayment, except with respect to debts established by a judicial or administrative order. In those cases, the debtor may not dispute matters or issues already settled, litigated, or otherwise established by such order, including the amount of the debt or the debtor's liability for that debt, except to the extent that the debtor alleges that the amount of the debt does not reflect payments already made to repay the debt in whole or part. § 1.122 Commission action as a result of consideration of evidence submitted in response to the notice of intent. (a) Consideration of evidence. (1) Consider the evidence presented by the debtor; (2) Determine whether all or a portion of the debt is still past due and legally enforceable; and (3) Notify the debtor of its determination, as set forth in paragraph (b) of this section. (b) Commission action on the debt. (2) If, after considering any additional evidence from the debtor, the Commission determines that no part of the debt remains past-due and legally enforceable, the Commission will so notify the debtor and will not refer the debt to the Fiscal Service for offset against the debtor's Federal tax refund payment. § 1.123 Change in notification to Bureau of the Fiscal Service. After the Commission sends the Fiscal Service notification of a debtor's liability for a debt, the Commission will promptly notify the Fiscal Service if the Commission: (a) Determines that there is a material error or other material change in the information contained in the notification, including in the amount of the debt, subject to any additional due process requirements, where applicable, under this subpart or the Federal Claims Collection Standards, if the amount of debt has increased; (b) Receives a payment or credits a payment to the account of the debtor named in the notification that reduces the amount of the debt referred to Fiscal Service for offset; or (c) Otherwise concludes that such notification is appropriate or necessary. § 1.124 Interest, penalties, and costs. To the extent permitted or required by 31 U.S.C. 3717 or other law, regulation, or order, all interest, penalties, and costs applicable to the debt or incurred in connection with its referral for collection by tax refund offset will be assessed on the debt and thus increase the amount of the offset. §§ 1.125-1.129 [Reserved] Subpart R—Policy With Regard to Indemnification of FTC Employees Authority: 15 U.S.C. 46. Source: 82 FR 30966, July 5, 2017, unless otherwise noted. § 1.130 Policy on employee indemnification. (a) The Commission may indemnify, in whole or in part, its employees (which for the purpose of this regulation includes former employees) for any verdict, judgment, or other monetary award which is rendered against any such employee, provided that the conduct giving rise to the verdict, judgment, or award was taken within the scope of his or her employment with the Federal Trade Commission and that such indemnification is in the interest of the Federal Trade Commission, as determined as a matter of discretion by the Commission, or its designee. (b) The Commission may settle or compromise a personal damage claim against its employee by the payment of available funds, at any time, provided the alleged conduct giving rise to the personal damage claim was taken within the scope of employment and that such settlement or compromise is in the interest of the Federal Trade Commission, as determined as a matter of discretion by the Commission, or its designee. (c) Absent exceptional circumstances, as determined by the Commission or its designee, the Commission will not entertain a request either to agree to indemnify or to settle a personal damage claim before entry of an adverse verdict, judgment, or monetary award. (d) When an employee of the Federal Trade Commission becomes aware that an action may be or has been filed against the employee in his or her individual capacity as a result of conduct taken within the scope of his or her employment, the employee shall immediately notify his or her supervisor that such an action is pending or threatened. The supervisor shall promptly thereafter notify the Office of the General Counsel. Employees may be authorized to receive legal representation by the Department of Justice in accordance with 28 CFR 50.15. (e)(1) The employee may, thereafter, request either: (i) Indemnification to satisfy a verdict, judgment or award entered against the employee; or (ii) Payment to satisfy the requirements of a settlement proposal. (2) The employee shall submit a written request, with documentation including copies of the verdict, judgment, award, or settlement proposal, as appropriate, to the head of his or her division or office, who thereupon shall submit to the General Counsel, in a timely manner, a recommended disposition of the request. The General Counsel may also seek the views of the Department of Justice. The failure of an employee to provide notification under paragraph (d) of this section or make a request under this paragraph (e) shall not impair the agency's ability to provide indemnification or payment under this section if it determines it is appropriate to do so. (f) Any amount paid under this section either to indemnify a Federal Trade Commission employee or to settle a personal damage claim shall be contingent upon the availability of appropriated funds of the Federal Trade Commission. Subpart S—Procedures for Submissions Under the Horseracing Integrity and Safety Act Authority: 15 U.S.C. 3053. Source: 86 FR 54823, Oct. 5, 2021, unless otherwise noted. § 1.140 Definitions. When used in relation to the Horseracing Integrity and Safety Act, 15 U.S.C. 3051 through 3060, and this subpart— Act Breeder Commission Covered horse l (1) Beginning 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; and (2) Ending on the date on which the Authority receives written notice that the horse has been retired. Covered horserace Covered persons HISA Guidance Horseracing anti-doping and medication control program Horseracing Integrity and Safety Authority Authority Interstate off-track wager Jockey Owner Proposed rule Proposed rule modification modification (1) Any proposed modification to a rule or proposed rule change; or (2) Any interpretation or statement of policy or practice relating to an existing rule of the Authority that is not HISA Guidance and would have the force of law if approved as a final rule. Racetrack Racetrack safety program State racing commission Trainer Training facility Veterinarian Workout l § 1.141 Required submissions. The Authority must submit to the Commission any proposed rule, or proposed rule modification, of the Authority relating to— (a) The bylaws of the Authority; (b) A list of permitted and prohibited medications, substances, and methods, including allowable limits of permitted medications, substances, and methods; (c) Laboratory standards for accreditation and protocols; (d) Standards for racing surface quality maintenance; (e) Racetrack safety standards and protocols; (f) A program for injury and fatality data analysis; (g) A program of research and education on safety, performance, and anti-doping and medication control; (h) A description of safety, performance, and anti-doping and medication control rule violations applicable to covered horses and covered persons; (i) A schedule of civil sanctions for violations; (j) A process or procedures for disciplinary hearings; (k) A formula or methodology for determining assessments described in 15 U.S.C. 3052(f); and (l) Any other proposed rule or modification the Act requires the Authority to submit to the Commission for approval. § 1.142 Submission of proposed rule or modification. (a) Contents of submission. Federal Register (1) The reasons for adopting the proposed rule or modification. (2) Any problems the proposed rule or modification is intended to address and how the proposed rule or modification will resolve those problems. (3) A description of any reasonable alternatives to the proposed rule or modification that may accomplish the stated objective and an explanation of the reasons the Authority chose the proposed rule or modification over its alternatives. (4) How the proposed rule or modification will affect covered persons, covered horses, and covered horseraces. (5) Why the proposed rule or modification is consistent with the requirements of the Act and any rules and regulations applicable to the Authority, including the following: (i) Anti-doping and medication control program. (A) Under 15 U.S.C. 3055(a)(2), the unique characteristics of a breed of horse made subject to the Act by election of a State racing commission or breed governing organization for such horse pursuant to 15 U.S.C. 3054( l (B) The factors listed in 15 U.S.C. 3055(b); and (C) The baseline anti-doping and medication control rules identified in 15 U.S.C. 3055(g)(2)(A). For a proposed rule, the Authority must state whether its proposed rule adopts the baseline standards identified in 15 U.S.C. 3055(g)(2)(A). If there is a conflict in any baseline standards identified in 15 U.S.C. 3055(g)(2)(A), the Authority must identify the conflict and state whether the standard it adopted is the most stringent standard. For a proposed rule modification, the Authority must explain whether the modification renders an anti-doping and medication control rule less stringent than the baseline anti-doping and medication control rules described in 15 U.S.C. 3055(g)(2)(A), and state whether the anti-doping and medication control enforcement agency has approved of the change. (ii) Racetrack safety program. (iii) Other rules. (6) If written comments were solicited, the Authority's draft Federal Register (7) The date that the Authority proposes for the Federal Register (b) Supporting documentation. (c) Redline document for proposed rule modification. Federal Register (d) Timing of submission. Federal Register (e) Conclusory statements and failure to provide requisite analysis. (f) Public comments. § 1.143 Submissions to the Secretary. (a) Electronic submission. [email protected]. (b) Format for submissions Electronic format. Federal Register (2) Table of contents. (3) Contact information. (4) Draft Federal Register documents. Federal Register Federal Register (i) Contain proper preamble captions and content; (ii) State the purpose of, and basis for, the proposed rule or modification; (iii) Set forth regulatory text, headings, and authority citations; (iv) Use correct numbering, structure, and amendatory language; and (v) Conform to the style and formatting established by the Office of the Federal Register and Government Publishing Office. (See, specifically, section 2.17 (proposed rules) of the Office of the Federal Register's Document Drafting Handbook.) (c) Confidential information. (d) Date of filing. (e) Authority to reject documents for filing. (f) Federal Register publication. Federal Register, Federal Register [86 FR 54823, Oct. 5, 2021, as amended at 89 FR 8531, Feb. 8, 2024] § 1.144 Approval or disapproval of proposed rules and proposed rule modifications. (a) Commission decision. Federal Register (b) Standard of review. (c) Effect. Subpart T—Procedures for Review of Final Civil Sanctions Imposed under the Horseracing Integrity and Safety Act Authority: 15 U.S.C. 3058. Source: 87 FR 60079, Oct. 4, 2022, unless otherwise noted. § 1.145 Submission of notice of civil sanctions. (a) Requirement to file. (b) Format and procedure for submission of notice. (1) Be emailed to the Secretary of the Commission (Secretary) at [email protected]; (2) Contain the subject line “HISA Civil Sanction Notice”; (3) Clearly indicate that it relates to a civil sanction imposed on a covered person resulting from a violation of an Authority rule; (4) Include contact information for an employee at the Authority responsible for communications regarding review of the civil sanction; (5) Be sent in portable document format (or .PDF) or such other format as the Secretary may permit; (6) Contain only public information; and (7) Be served the same day upon the person aggrieved by the sanction in accordance with 16 CFR 4.4(b) as made applicable to review proceedings under this part. § 1.146 Review of civil sanction by an Administrative Law Judge. (a) Application for review. (1) Application by aggrieved person. (2) Application by the Commission. (b) Nature of review by the Administrative Law Judge. (1) Whether the person has engaged in such acts or practices, or has omitted such acts or practices, as the Authority has found the person to have engaged in or omitted. In making this determination, the Administrative Law Judge may rely on the factual record developed before the Authority and may supplement that record by evidence presented in an administrative hearing under paragraph (c) of this section; (2) Whether such acts, practices, or omissions are in violation of the Horseracing Integrity and Safety Act, 15 U.S.C. 3051 through 3060, or the rules of the Authority as approved by the Commission. The Administrative Law Judge will make this determination de novo; and (3) Whether the final civil sanction of the Authority was arbitrary, capricious, an abuse of discretion, prejudicial, the result of a conflict of interest, or otherwise not in accordance with law. The Administrative Law Judge will make this determination de novo. (c) Administrative hearings Duties and powers of the Administrative Law Judge and rights of the parties. (A) Administering oaths and affirmations; (B) Issuing orders requiring answers to questions; (C) Compelling admissions, upon request of a party or on its own initiative; (D) Ruling upon offers of proof and receiving evidence; (E) Regulating the course of the hearing; (F) Holding conferences for settlement, simplification of the issues, or other proper purposes; (G) Ruling on procedural and other motions; and (H) Issuing a decision. (ii) All parties are entitled to the right of due notice, cross-examination, presentation of evidence, objection, motion, argument, and all other rights essential to a fair hearing consistent with 5 U.S.C. 556. (2) The factual record. (i) The parties do not request to supplement or contest the facts found by the Authority; (ii) The parties do not seek to contest any facts found by the Authority, but at least one party requests to supplement the factual record; (iii) At least one party seeks to contest any facts found by the Authority; (iv) The Commission, if it filed the application for review, seeks supplementation of the record; or (v) In the Administrative Law Judge's view, the factual record is insufficient to adjudicate the merits of the review proceeding. (3) Hearings for which neither a party nor the Commission requests to supplement or contest the facts found by the Authority and whose record the Administrative Law Judge deems sufficient. (4) Hearings for which no party contests facts found by the Authority but at least one party or the Commission seeks to supplement the record or for which the Administrative Law Judge determines that supplementation is necessary. (i) The Administrative Law Judge will conduct an evidentiary hearing lasting no more than 8 hours for each party or the Commission seeking supplementation. The hearing may be extended by request of a party, the Commission, or on the Administrative Law Judge's own initiative, for good cause. When a party seeks to supplement the record, the hearing will be limited to: (A) An opening statement by the party requesting supplementation of no more than 15 minutes; (B) Direct examination by the party requesting supplementation, with opportunity for cross-examination by the other party; and (C) The admission of documentary evidence. When the Administrative Law Judge or the Commission seek supplementation of the record, the Administrative Law Judge or the Commission may issue an order allowing the consideration of additional evidence, describing the additional evidence sought, and prescribing the procedures for holding the hearing before the Administrative Law Judge. (ii) Within 30 days of the hearing's conclusion, each party will concurrently file with the Secretary for consideration by the Administrative Law Judge proposed findings of fact, conclusions of law, and a proposed order, and a supporting legal brief explaining the party's reasoning. Such filings, limited to 7,500 words, must be served upon the other party and contain references to the record and authorities on which they rely. Reply briefs, limited to 2,500 words, may be filed by each party within 10 days of service of the initial filings. (iii) The Administrative Law Judge must hear closing statements from the parties within 10 days of the date on which reply briefs are due if either party, in its reply brief, requests the opportunity to make a closing statement. (5) Hearings in which a party seeks to supplant facts found by the Authority. (ii) The Authority may file a response to the request for an extended hearing within 10 days of being served with the application for review, limited to 2,500 words (instead of the ordinary 1,000 words). The Authority may, in its response, elect to concede that the contention of procedural inadequacy has substantial evidence in support of it. Presented with such a concession, the Administrative Law Judge must order the final civil sanction set aside without prejudice and remand the matter to the Authority. (iii) The Administrative Law Judge will issue a decision resolving the request for an extended hearing within 10 days of the date on which the Authority's response is due. If the request for an extended hearing is granted in part or in full, the extended hearing will be limited to the same elements listed in paragraph (c)(4) of this section, adjusted as deemed necessary by the Administrative Law Judge. (iv) The final factual record will consist of: (A) Those facts found by the Authority that, in the determination of the Administrative Law Judge, were found in a process that was consistent with 15 U.S.C. 3057(c), the Authority's Rule Series 8300, and adequate due process; as well as (B) Any new facts adduced at the hearing and found by the Administrative Law Judge. (6) Evidence Burden of proof. (ii) Admissibility. (iii) Presentation of evidence. (iv) Adverse witnesses. (v) Objections. (7) In camera treatment of material. in camera in camera in camera (ii) Material made subject to an in camera in camera (d) Decision by the Administrative Law Judge When filed. (2) Content. in camera (3) Disposition. (i) Affirm, reverse, modify, set aside, or remand for further proceedings, in whole or in part, the final civil sanction of the Authority; and (ii) Make any finding or conclusion that, in the judgment of the Administrative Law Judge, is proper and based on the record. (4) Final decision; waiver upon Commission review. § 1.147 Review by the Commission of the decision of the Administrative Law Judge. (a) Notice of review by the Commission. (b) Application for review and response Timing. (2) Contents of application and response. (ii) Any other party to the matter may respond to the application no later than 10 days after it is filed by providing the reasons, limited to 1,000 words, it should not be granted by addressing the matters the Commission considers in determining whether to grant the application under paragraph (b)(4)(i) of this section. (3) Effect of denial of application for review. (4) Discretion of the Commission In general. (ii) Matters to be considered. (A) A prejudicial error was committed in the conduct of the proceeding before the Administrative Law Judge; or (B) The decision involved: ( 1 ( 2 (c) Nature of review on the merits Standard of review. (2) Consideration of additional evidence. (i) Order by Commission. (ii) Motion by a party. (A) Such additional evidence is material; and (B) There were reasonable grounds for failure to submit the evidence previously. (iii) Commission determination. (A) Accept or hear additional evidence itself; or (B) Remand the proceeding to the Administrative Law Judge for the consideration of additional evidence. (3) Briefing schedule Opening brief. (A) A subject index of the matter in the brief, with page references, and a table of cases with page references; (B) A concise statement of the case, which includes a statement of facts relevant to the issues submitted for review, and a summary of the argument, which must contain a succinct, clear, and accurate statement of the arguments made in the body of the brief; (C) A list of the questions presented on appeal that the Commission has agreed to hear; (D) The argument, clearly presenting the points of fact and law relied upon in support of the position taken on each question, with specific page references to the record and the legal or other material relied upon; and (E) A proposed order for the Commission's consideration. (ii) Answering brief. (iii) Reply brief. (iv) Word count limitation. (4) Oral argument. (5) Decision Timing. (ii) Content; resolution. (A) Affirm, reverse, modify, set aside, or remand for further proceedings before the Administrative Law Judge, in whole or in part, the decision of the Administrative Law Judge; and (B) Make any finding or conclusion that, in the judgment of the Commission, is proper and based on the record. § 1.148 Stay of proceedings. (a) In general. (b) Application for a stay Before the Administrative Law Judge. (2) Before the Commission Expedited application for a stay. (ii) Application for a stay after the Commission decides to review the Administrative Law Judge's decision. (c) Content of stay application and opposition. (d) Factors considered in deciding a stay application. (1) The likelihood of the applicant's success on review; (2) Whether the applicant will suffer irreparable harm if a stay is not granted; (3) The degree of injury to other parties or third parties if a stay is granted; and (4) Whether the stay is in the public interest. § 1.149 Adoption of miscellaneous rules. Part 4 of this subchapter is adopted into this subpart and governs proceedings under this subpart, and, within §§ 4.2 and 4.4, references to “part 3” shall include this subpart. Subpart U—Oversight of the Horseracing Integrity and Safety Authority Authority: 15 U.S.C. 3053(e). 89 FR 8532, Feb. 8, 2024, unless otherwise noted. § 1.150 Submission of the Authority's proposed budget submissions. (a) Mandatory annual submission. (b) Consideration of public comments. (c) Contents of submission. (1) Indication of Board vote. (2) Revenue information. (3) Expenditure information. (i) The racetrack safety program; (ii) The anti-doping and medication control program; (iii) All other programmatic expenditures other than for racetrack safety and anti-doping and medication control, such as the administration of the Authority or its technological needs; (iv) Repayment of any loans; and (v) Any funding shortfall incurred. (4) Line items. (5) Comparison of approved budget to actual revenues and expenditures. (6) Public comments received and the Authority's response. (d) Publication of the proposed budget in the Federal Register. Federal Register regulations.gov. § 1.151 Commission decision on the Authority's proposed budget. (a) Commission approval required. (b) Conditional collection of fees allowed. (c) Decisional criteria. (d) Modification of line items. § 1.152 Deviation from approved budget. (a) When notice to the Commission is required. (b) Line-item deviations of more than 10 percent. (c) Total expenditure deviation. § 1.153 Submission of the Authority's annual reports, midyear reports, and strategic plans. (a) Annual financial report. (1) A complete accounting of the Authority's budget, as audited by a qualified, independent, registered public accounting firm and in accordance with Generally Accepted Accounting Principles (including a statement from the auditor attesting to the auditor's independence and its opinion regarding the financial statements presented in the annual financial report); (2) Line-item comparisons between the approved budget's revenues and expenditures for the previous year and the actual revenues and expenditures for the previous year; (3) An explanation of how the Authority has considered the relative costs and benefits in formulating the programs, projects, and activities described in the budget; (4) A description and accounting of the Authority's insurance coverage; (5) A description and accounting of any budgetary reserves; (6) Summaries of contracts or other liabilities that the Authority has entered into or may potentially incur; (7) A summary of travel expenses, including an itemized list of any first-class travel (defined as the highest and most expensive class of service); (8) Any new or continuing material or significant risks or issues raised by the audit, internal quality or control reviews, other inspections or peer reviews of the Authority, or any inquiry or investigation by governmental or professional authorities, along with any steps taken ( e.g., (9) Any other information requested by Commission staff. (b) Annual performance report. (1) Narrative summaries of all the major efforts by the Authority to carry out the requirements of the Act, including the status or results of any publicly announced investigations conducted by the Authority; (2) Information about the Authority's cooperation with the States as set forth in 15 U.S.C. 3060(b), including whether each State has covered horseraces, elects to remit fees, or has entered into an agreement under 15 U.S.C. 3060(a)(1) to implement a component of the programs on racetrack safety or anti-doping and medication control; (3) A summary of all final civil sanctions imposed by the Authority in the previous year, in a tabular format. At a minimum, the summary should be broken down by violation category ( e.g., (4) An assessment of the Authority's progress in meeting or not meeting its performance measures contained in its strategic plan per paragraph (d) of this section; (5) A statement from each Board of Directors committee summarizing its work in the previous year and all recommendations each such committee has made to the Board; (6) Information about any changes in the composition of the Authority's Board of Directors or standing committees; (7) Information about the relationship between the Authority and the anti-doping and medication control enforcement agency, including how the enforcement agency is performing under its contract with the Authority and how many years remain under the contract; (8) A summary of all litigation to which the Authority is a party, including actions commenced by the Authority under 15 U.S.C. 3054(j); (9) A summary of all subpoenas issued by the Authority under 15 U.S.C. 3054(c); (10) Descriptions of any areas in which the Authority believes that improvements to its operations are warranted, together with the Authority's plans to achieve those improvements. Forward-looking information should reflect known and anticipated risks, uncertainties, future events or conditions, and trends that could significantly affect the Authority's future financial position, condition, or operating performance, as well as Authority actions that have been planned or taken to address those challenges; and (11) Any other information requested by Commission staff. (c) Midyear reporting. (1) Spending and staffing levels for the quarter ending June 30, compared to the levels in the Commission-approved budget; (2) A summary of travel expenses, including an itemized list of any first-class travel (defined as the highest and most expensive class of service); (3) The status of outstanding and completed corrective actions; and (4) Any other information requested by Commission staff. (d) Strategic plan. (1) Post its draft strategic plan on its website for a public comment period of at least 14 days; (2) Present its final strategic plan to the Commission, along with a summary of its responses to public comments; and (3) Publish its final strategic plan on its website. (e) Further guidance on strategic plan. (1) Be limited to the vital few and demonstrate results; (2) Cover multiple priorities; (3) Provide useful information for decision-making; (4) Be clear, measurable, objective, and reliable; and (5) Focus on core program activities and priorities. [89 FR 66550, Aug. 16, 2024] § 1.154 Enterprise risk management. (a) Guiding principles. e.g., (1) Compliance with applicable laws, rules, and regulations; (2) The avoidance of conflicts of interest, or the appearance thereof, in all aspects of the Authority's operations, including investigation and enforcement, vendor selection, personnel assignments and responsibilities, and actions by the Board of Directors or management; and (3) Handling funds received and expended by the Authority, including revenue/expense policies, fundraising practices, contracting policies, travel policies, and real and personal property agreements and expenses. (b) Data security and privacy. (c) Vendor selection. e.g., (d) Notice. e.g., e.g., [89 FR 66550, Aug. 16, 2024] § 1.155 Other best practices. (a) Regular monitoring meetings. (b) Records and information management. (c) Treatment of confidential information. (d) Standing data requests. (e) Personnel and compensation. (f) Customer service. e.g., (g) Travel. [89 FR 66550, Aug. 16, 2024] § 1.156 Severability. The provisions of this subpart are separate and severable from one another. If any provision is stayed or determined to be invalid, it is the Commission's intention that the remaining provisions shall continue in effect. [89 FR 66550, Aug. 16, 2024]

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