Grassley Amendment Fails; HISA `Fix' Language in Omnibus Bill

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After a week of political uncertainty, the Senate has passed a version of the full year-end omnibus spending bill with language affording the Federal Trade Commission (FTC) more rule-making authority in the Horseracing Integrity and Safety Act (HISA), according to a source close to the process.

The language is designed to address a ruling in the Fifth Circuit Court of Appeals from November, which found the law as written doesn't afford the FTC enough latitude in the rule-making process.

The Senate voted in favor of the bill 68-29, but it must first pass the House of Representatives before heading to the president's desk.

It's currently unclear what specific language the Senate's version of the $1.7-trillion spending bill includes regarding HISA and the FTC's modified role.

But language in a prior version of the bill allows the FTC to “abrogate, add to, and modify the rules of the Authority promulgated in accordance with this Act 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 Act and applicable rules approved by the Commission, or otherwise in furtherance of the purposes of this Act.”

Currently, the FTC can only accept or reject a proposed rule constructed by the Horseracing Integrity and Safety Authority, the private entity given broad umbrella power over implementing the act.

In a statement immediately following the news, National Horsemen's Benevolent and Protective Association (HBPA) CEO, Eric Hamelback, praised last-minute efforts by a group of lawmakers led by Senator Chuck Grassley to strip the language from the omnibus spending bill.

“We know there were several Senators who would have supported removal language. However, the amendment did not get that opportunity and the HISA “fix” language remains in the Omnibus bill. With that said we are on firm ground to remain focused as the “fix” language changes very little about the Act as it remains unconstitutional,” wrote Hamelback.

HISA spokesperson, Mandy Minger, said that the Authority would have a comment after the bill is signed.

If enacted into law, questions swirl about what this legislative fix possibly means for HISA. Various avenues were detailed in a recent conversation with constitutional law expert, Lucinda Finley.

Last week, the FTC announced that it had disapproved “without prejudice” the program's anti-doping and medication control (ADMC) rules because of the law's constitutional holes.

In the near-term, with this new language HISA can resubmit the ADMC rules with the FTC. It would then take approximately 60 days for these rules to go into effect, “assuming that the FTC was going to approve them substantively,” HISA CEO Lisa Lazarus previously explained.

There remains a ruling pending in the Sixth Circuit Court of Appeals concerning similar constitutional questions to the Fifth Circuit. It is currently unclear when that ruling will land.

But if the amended language in the omnibus spending bill is sufficient in the judgement of the Fifth Circuit, it could essentially render the current cases before the Fifth and Sixth Circuits legally moot in a practical sense.

It could also make the possibility of the Supreme Court taking them up altogether highly unlikely.

Even then, don't expect the legal fireworks to end, with a case in the U.S. District Court of Texas–Northern District, Amarillo Division–a potentially nasty looking legal blackthorn for the law.

Finley told the TDN that the case raises several additional constitutional arguments that the Fifth and Sixth Circuits did not rule on, including HISA's investigative, subpoena and punishment power as a private body, and the way in which individuals on the HISA board are appointed.

“It argues that the whole structure is a delegation of not only too much executive authority, but can amount to a delegation of legislative and judicial authority as well,” Finley explained.

If the judge in the case agrees that HISA indeed delegates too much power to a private entity, the plaintiffs in the case are seeking an injunction to suspend enforcement of the law, said Finley.

Would such an injunction apply nationwide or just in Texas?

“You've actually asked what is one of the most raging controversies in U.S. law,” Finley replied, leaving the answer open-ended.

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