California Regulatory Notice Register — Register 2019, No. 17-Z (April 26, 2019)

Cal. Reg. Notice Reg. 2019, No. 17

California Z Register

REGISTER (Continued on next page) Time- Dated Material GAVIN NEWSOM, GOVERNOR OFFICE OF ADMINISTRATIVE LAW 2019, NO. 17−Z PUBLISHED WEEKLY BY THE OFFICE OF ADMINISTRATIVE LAW APRIL 26, 2019 PROPOSED ACTION ON REGULATIONS TITLE 2. FAIR POLITICAL PRACTICES COMMISSION Conflict−of−Interest Code — Notice File No. Z2019−0416−05 .......................................... 621 Amendment Multi−County: Redwood Empire Municipal Insurance Fraud Adoption Multi−County: Santa Clarita Valley Groundwater Sustainability Agency TITLE 2. STATE COMPENSATION INSURANCE FUND Conflict−of−Interest Code — Notice File No.

Z2019−0416−09 .......................................... 622 TITLE 3. DEPARTMENT OF FOOD AND AGRICULTURE Fertilizing Materials Mill Assessment — Notice File No. Z2019−0416−06 ................................. 622 TITLE 4. CALFORNIA GAMBLING CONTROL COMMISSION 120−Day Timeline — Notice File No. Z2019−0415−03 ................................................ 625 TITLE 4. CALIFORNIA HORSE RACING BOARD Horse Ineligible to Start in a Race — Notice File No. Z2019−0415−02 .................................... 629 TITLE 4. CALIFORNIA HORSE RACING BOARD Microchips Required for All Horses on Grounds — Notice File No.

Z2019−0415−01 ......................... 633 TITLE 4. CALIFORNIA SCHOOL FINANCE AUTHORITY Charter School Facility Grant Program — Notice File No. Z2019−0416−08 ............................... 639 TITLE 10. BUREAU OF REAL ESTATE APPRAISERS Fees — Notice File No. Z2019−0416−07 ........................................................... 643 TITLE 12. DEPARTMENT OF VETERANS AFFAIRS California State Approving Agency for Veterans Education (CSAAVE) — Notice File No. Z2019−0416−03 .................................................................. 650

TITLE 14. CALIFORNIA COSTAL COMMISSION General Update of Coastal Commission Regulations — Notice File No. Z2019−0416−04 ..................... 654 TITLE 14. FISH AND GAME COMMISSION Hagfish Traps — Notice File No. Z2019−0416−01 .................................................... 658 TITLE 16. BOARD OF PHARMACY Fee

Schedule — Notice File No. Z2019−0411−02 ..................................................... 661 TITLE 16. BOARD OF PHARMACY Naloxone Fact Sheet — Notice File No. Z2019−0411−01 ............................................... 664 TITLE 20. CALIFORNIA ENERGY COMMISSION Appliance Efficiency Regulations — Notice File No. Z2019−0416−02 ..................................... 667

SUMMARY OF REGULATORY ACTIONS Regulations filed with the Secretary of State ......................................................... 673 Sections Filed, November 14, 2018 to April 17, 2019 ................................................. 676 The California Regulatory Notice Register is an official state publication of the Office of Administrative Law containing notices of proposed regulatory actions by state regulatory agencies to adopt, amend or repeal regulations contained in the California Code of Regulations.

The effective period of a notice of proposed regulatory action by a state agency in the California Regulatory Notice Register shall not exceed one year [Government Code § 11346.4(b)]. It is suggested, therefore, that issues of the California Regulatory Notice Register be retained for a minimum of 18 months. CALIFORNIA REGULA TORY NOTICE REGISTER is published weekly by the Office of Administrative Law, 300 Capitol Mall, Suite 1250, Sacramento, CA 95814-4339. The Register is printed by Barclays, a subsidiary of West, a Thomson Reuters Business, and is offered by subscription for $205.00 (annual price).

To order or make changes to current subscriptions, please call (800) 328−4880. The Register can also be accessed at http://www.oal.ca.gov .

CALIFORNIA REGULATORY NOTICE REGISTER 2019, VOLUME NO. 17-Z 621 PROPOSED ACTION ON REGULATIONS Information contained in this document is published as received from agencies and is not edited by Thomson Reuters. TITLE 2.

FAIR POLITICAL PRACTICES COMMISSION NOTICE IS HEREBY GIVEN that the Fair Political Practices Commission, pursuant to the authority vested in it by Sections 82011, 87303, and 87304 of the Gov- ernment Code to review proposed conflict−of−interest codes, will review the proposed/amended conflict−of− interest codes of the following: CONFLICT−OF−INTEREST CODES AMENDMENT MULTI−COUNTY: Redwood Empire Municipal Insurance Fund ADOPTION MULTI−COUNTY: Santa Clarita Valley Groundwater Sustainability Agency A written comment period has been established com- mencing on April 26, 2019, and closing on June 10, 2019.

Written comments should be directed to the Fair Political Practices Commission, Attention Amanda Apostol, 1102 Q Street, Suite 3000, Sacramento, Cali- fornia 95811. At the end of the 45−day comment period, the pro- posed conflict−of−interest code(

s) will be submitted to the Commission’s Executive Director for her review, unless any interested person or his or her duly autho- rized representative requests, no later than 15 days prior to the close of the written comment period, a public hearing before the full Commission. If a public hearing is requested, the proposed code(

s) will be submitted to the Commission for review. The Executive Director of the Commission will re- view the above−referenced conflict−of−interest code(s), proposed pursuant to Government Code Sec- tion 87300, which designate, pursuant to Government Code

Section 87302, employees who must disclose cer- tain investments, interests in real property and income. The Executive Director of the Commission, upon her or its own motion or at the request of any interested per- son, will approve, or revise and approve, or return the proposed code(

s) to the agency for revision and re−submission within 60 days without further notice. Any interested person may present statements, argu- ments or comments, in writing to the Executive Direc- tor of the Commission, relative to review of the pro- posed conflict−of−interest code(s). Any written com- ments must be received no later than June 10, 2019. If a public hearing is to be held, oral comments may be pre- sented to the Commission at the hearing.

COST TO LOCAL AGENCIES There shall be no reimbursement for any new or in- creased costs to local government which may result from compliance with these codes because these are not new programs mandated on local agencies by the codes since the requirements described herein were mandated by the Political Reform Act of 1974. Therefore, they are not “costs mandated by the state” as defined in Govern- ment Code

Section 17514. EFFECT ON HOUSING COSTS AND BUSINESSES Compliance with the codes has no potential effect on housing costs or on private persons, businesses or small businesses. AUTHORITY Government Code Sections 82011, 87303 and 87304 provide that the Fair Political Practices Commission as the code−reviewing body for the above conflict−of− interest codes shall approve codes as submitted, revise the proposed code and approve it as revised, or return the proposed code for revision and re−submission.

REFERENCE Government Code Sections 87300 and 87306 pro- vide that agencies shall adopt and promulgate conflict− of−interest codes pursuant to the Political Reform Act and amend their codes when change is necessitated by changed circumstances. CONTACT Any inquiries concerning the proposed conflict−of− interest code(

s) should be made to Amanda Apostol,

CALIFORNIA REGULATORY NOTICE REGISTER 2019, VOLUME NO. 17-Z 622 Fair Political Practices Commission, 1102 Q Street, Suite 3000, Sacramento, California 95811, telephone (916) 322−5660. A V AILABILITY OF PROPOSED CONFLICT−OF−INTEREST CODES Copies of the proposed conflict−of−interest codes may be obtained from the Commission offices or the re- spective agency. Requests for copies from the Commis- sion should be made to Amanda Apostol, Fair Political Practices Commission, 1102 Q Street, Suite 3000, Sacramento, California 95811, telephone (916) 322−5660. TITLE 2.

STATE COMPENSATION INSURANCE FUND NOTICE OF INTENTION TO AMEND THE CONFLICT−OF−INTEREST CODE OF THE State Compensation Insurance Fund NOTICE IS HEREBY GIVEN that the State Com- pensation Insurance Fund, pursuant to the authority vested in it by

section 87306 of the Government Code, proposes amendment to its conflict−of−interest code. A comment period has been established commencing on April 26, 2019 and closing on June 10, 2019. All in- quiries should be directed to the contact listed below. The State Compensation Insurance Fund proposes to amend its conflict−of−interest code to include em- ployee positions that involve the making or participa- tion in the making of decisions that may foreseeably have a material effect on any financial interest, as set forth in subdivision (

a) of

section 87302 of the Govern- ment Code. The amendment carries out the purposes of the law and no other alternative would do so and be less burdensome to affected persons. Changes to the conflict−of−interest code include: newly added and deleted positions, department restruc- tures, Information Technology classification consoli- dation, removing positions that do not meet the filing requirements, and also makes other technical changes. The proposed amendment and explanation of the rea- sons can be obtained from the agency’s contact.

Any interested person may submit written comments relating to the proposed amendment by submitting them no later than June 10, 2019, or at the conclusion of the public hearing, if requested, whichever comes later. At this time, no public hearing is scheduled. A person may request a hearing no later than May 25, 2019. The State Compensation Insurance Fund has de- termined that the proposed amendments: 1. Impose no mandate on local agencies or school districts. 2. Impose no costs or savings on any state agency. 3. Impose no costs on any local agency or school district that are required to be reimbursed under

Part 7 (commencing with

Section 17500) of Division 4 of Title 2 of the Government Code. 4. Will not result in any nondiscretionary costs or savings to local agencies. 5. Will not result in any costs or savings in federal funding to the state. 6. Will not have any potential cost impact on private persons, businesses or small businesses. All inquiries concerning this proposed amendment and any communication required by this notice should be directed to: Susan Davey, Director of Employee Relations (916) 924−6342 sdavey@scif.com TITLE 3. DEPARTMENT OF FOOD AND AGRICULTURE DIVISION 4. PLANT INDUSTRY

CHAPTER 1. CHEMISTRY SUBCHAPTER 1. FERTILIZING MATERIALS

ARTICLE 1. STANDARDS AND LABELING

ARTICLE 2. SAMPLES

ARTICLE 6. MILL ASSESSMENTS NOTICE IS HEREBY GIVEN that the California Department of Food and Agriculture (Department) pro- poses to adopt or make changes to the California Code of Regulations (CCR), Title 3, Division 4,

Chapter 1, Subchapter 1, Articles 1, 2, and 7, Sections 2303, 2317.5, and 2326.1. PUBLIC HEARING The Department has not scheduled a public hearing on this proposed action. However, the Department will hold a hearing if it receives a written request for a public hearing from any interested person, or his or her autho- rized representative, no later than 15 days before the close of the written comment period. WRITTEN COMMENT PERIOD Any interested person, or his or her authorized repre- sentative, may submit written comments relevant to the proposed regulatory action to the Department by mail, fax, or email. The written comment period closes at

CALIFORNIA REGULATORY NOTICE REGISTER 2019, VOLUME NO. 17-Z 623 noon, on June 11, 2019. The Department will only con- sider comments received by that time.

Submit comments to: Brittnie Sabalbro, Associate Governmental Program Analyst (AGPA) California Department of Food and Agriculture Feed, Fertilizer, and Livestock Drugs Regulatory Services Branch 1220 N Street Sacramento, CA 95814 (916) 900−5022 FAX: (916) 900−5349 brittnie.sabalbro@cdfa.ca.gov Following the written comment period or public hearing, if one is requested, the Department, at its own motion or at the request of any interested person, may adopt the proposal substantially as set forth without fur- ther notice.

AUTHORITY AND REFERENCE Notice is hereby given that the California Department of Food and Agriculture, pursuant to the authority vest- ed by sections 407, 14501, 14502, 14601, 14611, 14631, and 14645 of the Food and Agricultural Code (FAC), proposes to make changes to Title 3, Division 4,

Chapter 1 of the CCR to implement, interpret, or make specific FAC Sections 14501, 14517, 14533, 14551, 14611, 14631, 14641, 14645, 14646, 14651.5, 14681, and 14682. INFORMATIVE DIGEST/POLICY STATEMENT OVERVIEW The Department’s Fertilizing Materials Inspection Program (FMIP) is statutorily tasked with licensing, la- bel registration, and field inspection of fertilizing mate- rials in the State of California. FMIP is responsible for reviewing and registering product labels, and ensuring fertilizing materials are safe, effective, and meet the nu- trients guaranteed by the manufacturer.

Producers of agricultural minerals, auxiliary soil and plant sub- stances, commercial fertilizers, soil amendments, spe- cialty fertilizers, and organic input materials are statu- torily mandated to register with the FMIP. The proposed actions within CCR

Section 2303, paragraphs (s), (t), and (

w) ensure that claims on prod- uct labels are correctly and completely documented. This would allow the public and growers access to accu- rate and current knowledge of products that they pur- chase. The revised regulation provides clarity to indus- try about accurate disclosure to the public of potential heavy metal contamination in fertilizing material prod- ucts and clarifies that firms produce only one label per product rather than a state specific label. Current and complete analyses are required to accurately reflect the label claims which promise the consumer that this in- formation is available. The adoption of

Section 2317.5 ensures transparency to fertilizer manufacturers for their fertilizer guarantees of primary nutrients, secondary nutrients, micronutri- ents, or other guaranteed claims, when their products are analyzed by the Department. The proposed action within CCR

Section 2326.1 is intended to set the mill assessment rate for the Depart- ment’s FMIP. FAC,

Article 6. Inspection Fees,

Section 14611(

a) mandates that a licensee whose name appears on the label of packaged fertilizing materials, as defined in Sections 14533 and 14551, shall pay to the secretary an assessment not to exceed two mills ($0.002) per dol- lar of sales. Anticipated Benefits of the Proposed Regulations: The Department anticipates the proposed heavy met- als and investigational allowances regulations would provide greater transparency with fertilizer labeling and consistency with nutrient guarantees.

The Department anticipates the proposed regulations to reduce the mill assessment rate would lower assess- ments paid by firms, in turn lowering the FMIP’s re- serve and allowing the Department to continue its focus on consumers receiving safe, effective fertilizing mate- rials, and meeting the quality and quantity guaranteed by the manufacturer; thus, ensuring the protection of public health and safety in the agricultural community.

Determination of Inconsistency/Incompatibility with Existing Regulations: The Department evaluated the proposed regulations and made several determinations required by Govern- ment Code

Section 11346.5(a)(3)(

A) to 11346.5(a)(3)(D). The Department determined that there are no existing state laws or regulations related di- rectly to the proposed action and the effect of the pro- posed action; the proposed regulations are not inconsis- tent or incompatible with existing state regulations. DISCLOSURES REGARDING THE PROPOSED ACTION The Department has made the following initial determinations: Mandate of local agencies and school districts: None. Cost or savings to any state agency: None.

Cost to any local agency or school district which must be reimbursed in accordance with Government Code sections 17500 through 17630: None. Other nondiscretionary cost or savings imposed on local agencies: None. Cost or savings in federal funding to the state: None.

CALIFORNIA REGULATORY NOTICE REGISTER 2019, VOLUME NO. 17-Z 624 Significant, statewide adverse economic impact di- rectly affecting business, including the ability of Cali- fornia businesses to compete with businesses in other states: None. Cost impacts on a representative private person or business: The Department is not aware of any cost im- pacts that a representative private person or business would necessarily incur in reasonable compliance with the proposed action. Significant effect on housing costs: None.

RESULTS OF ECONOMIC IMPACT ASSESSMENT/ANALYSIS The Department has initially determined that the pro- posed regulatory actions will not have an economic or fiscal impact to the fertilizer industry. These proposed regulations will not:

(1) Create or eliminate jobs within California

(2) Create new businesses or eliminate existing businesses within the State of California

(3) Affect the expansion of businesses currently doing business within the State of California The proposed regulatory adoptions will benefit the regulated industry by providing greater transparency with fertilizer labeling and nutrient guarantees and by decreasing the mill assessment while still adequately funding the FMIP for enforcement of the state’s fertiliz- ing materials laws and regulations. For additional infor- mation on benefits, please see Anticipated Benefits un- der the Informative Digest/Policy Statement Overview.

SMALL BUSINESS DETERMINATION The Department has initially determined that the pro- posed regulations will not have an effect on small busi- nesses. These regulations do not require any additional costs or outputs for small businesses. These regulations do not establish any new limitations on small businesses. CONSIDERATION OF ALTERNATIVES In accordance with Government Code

Section 11346.5(a)(13), the Department must determine that no reasonable alternative it considered or that has other- wise been identified and brought to its attention would be more effective in carrying out the purpose for which the action is proposed, would be as effective and less burdensome to affected private persons than the pro- posed action, or would be more cost−effective to affect- ed private persons and equally effective in implement- ing the statutory policy or other provision of law.

The Department invites interested persons to present statements or arguments with respect to alternatives to the proposed regulations during the written comment period.

CONTACT PERSONS Written comments and inquiries concerning the sub- stance of the proposed regulation should be directed to: Dale Woods, Environmental Program Manager I California Department of Food and Agriculture Feed, Fertilizer, and Livestock Drugs Regulatory Services Branch 1220 N Street Sacramento, CA 95814 Dale.Woods@cdfa.ca.gov Written comments and inquiries about the initial statement of reasons, proposed actions, or location of the rulemaking files; or a request for a public hearing should be directed to: Brittnie Sabalbro, AGPA California Department of Food and Agriculture Feed, Fertilizer, and Livestock Drugs Regulatory Services Branch 1220 N Street Sacramento, CA 95814 (916) 900−5022 FAX: (916) 900−5349 brittnie.sabalbro@cdfa.ca.gov A V AILABILITY OF STATEMENT OF REASONS, TEXT OF PROPOSED REGULATIONS, AND RULEMAKING FILE The Department will have the entire rulemaking file available for inspection and copying throughout the rulemaking process.

A copy of this Notice, the Pro- posed Regulation Text, and the Initial Statement of Rea- sons may be obtained by contacting Brittnie Sabalbro at the above address. A V AILABILITY OF DOCUMENTS ON THE INTERNET Copies of the Notice of Proposed Action, the Initial Statement of Reasons, and the proposed regulation text in underline and strikethrough can be accessed through the Department’s website at http://www.cdfa.ca.gov/is/ regulations.html.

CALIFORNIA REGULATORY NOTICE REGISTER 2019, VOLUME NO. 17-Z 625 A V AILABILITY OF CHANGED OR MODIFIED TEXT After considering all timely and relevant comments received during the written comment period, the De- partment may adopt the proposed regulations substan- tially as described in this notice. If the Department makes modifications which differ, but are sufficiently related to the originally proposed text, it will make the modified text (with the changes clearly indicated) avail- able to the public for at least 15 days prior to amend- ment.

Please send requests for copies of any modified regulations to the attention of Brittnie Sabalbro at the address, email, or phone number provided in the “Con- tact Persons” section. The Department will accept writ- ten comments on the modified regulations for 15 days after the date on which they are made available. A V AILABILITY OF THE FINAL STATEMENT OF REASONS Upon its completion, copies of the Final Statement of Reasons may be obtained by contacting Brittnie Sabal- bro at the information provided in the “Contact Per- sons” section. TITLE 4.

CALIFORNIA GAMBLING CONTROL COMMISSION 120−DAY TIMELINE CGCC−GCA−2019−01−R NOTICE IS HEREBY GIVEN that the California Gambling Control Commission (Commission) is proposing to take the action described in the Informa- tive Digest after consideration of all relevant public comments, objections, and recommendations received concerning the proposed action.

Comments, objec- tions, and recommendations may be submitted as follows: WRITTEN COMMENT PERIOD Any interested person, or his or her authorized repre- sentative, may submit written comments relevant to the proposed regulatory action to the Commission at any time during the 45−day public comment period, which closes on June 10, 2019. Written comments relevant to the proposed regulatory action may be sent by mail, fac- simile, or e−mail, directed to one of the individuals des- ignated in this notice as a contact person.

To be eligible for the Commission’s consideration, all written com- ments must be received at its office no later than mid- night on June 11, 2019. Comments sent to persons and/or addresses other than those specified under Contact Persons, or received after the date and time specified above, will be included in the record of this proposed regulatory action, but will not be summa- rized or responded to regardless of the manner of transmission. PUBLIC HEARING The Commission has not scheduled a public hearing on this matter.

Any interested person, or his or her au- thorized representative, may request a hearing pursuant to Government Code

section 11346.8. A request for a hearing should be directed to the person(

s) listed under Contact Persons no later than 15 days prior to the close of the written comment period. ADOPTION OF PROPOSED ACTION After the close of the public comment period, the Commission, upon its own motion or at the instance of any interested party, may thereafter formally adopt the proposals substantially as described below or may mod- ify such proposals if such modifications are sufficiently related to the original text.

With the exception of techni- cal or grammatical changes, the full text of any modi- fied proposal will be available for 15 days prior to its adoption from the person designated in this Notice as contact person and will be mailed to those persons who submit oral or written testimony related to this proposal or who have requested notification of any changes to the proposal.

AUTHORITY AND REFERENCE Pursuant to the authority vested by sections 19811, 19823, 19824, 19840, 19841, 19853(a)(3), 19876(a), and 19984, of the Business and Professions Code; and to implement, interpret or make specific sections 19841, 19850, 19851, 19852, 19853(a)(3), 19854, 19855, 19856, 19857, 19864, 19865, 19866, 19867, 19868, 19876(a), 19880, 19881, 19883, 19890, 19893, 19951, 19982, and 19984 of the Business and Profes- sions Code, the Commission is proposing to adopt the following changes to Chapters 2.1, 2.2, and 6 of Divi- sion 18 of Title 4 of the California Code of Regulations:

CALIFORNIA REGULATORY NOTICE REGISTER 2019, VOLUME NO. 17-Z 626 INFORMATIVE DIGEST AND POLICY STATEMENT OVERVIEW INTRODUCTION: The California Gambling Control Commission (Commission) is the state agency charged with the ad- ministration and implementation of the California Gambling Control Act (Act or GCA). 1 Under the Act, the Commission is required to approve, condition, or deny an application for license or other approval at a meeting [evidentiary hearing] where certain provisions must be provided.

The Commission previously adopted regulations under California Code of Regulations, Title 4, Division 18, Sections 12006 to 12068 concerning the procedures for evidentiary hearings in 2014. As part of this new process, applications are no longer denied at non−evidentiary hearing meetings but instead are as- signed to an evidentiary hearing if they are not approved or have some other action other than a denial applied at the non−evidentiary hearing. While the Commission still acts on an application within the 120−day timeline, it no longer denies within the 120−day timeline.

Modifi- cations are proposed to maintain the 120−day timeline, but alter the requirements to reflect and align with the new process. EXISTING LAW:

Section 19825 of the Business and Professions Code2 provides authority for the Commission to elect to utilize the administrative procedures act in place of a hearing or meeting of an adjudicative nature under the GCA.

Section 19870, subdivision (

a) provides authority for holding evidentiary hearings, and states that “the Com- mission, after considering the recommendation of the chief and any other testimony and written comments as may be presented at the meeting, or as may have been submitted in writing to the commission prior to the meeting, may either deny the application or grant a li- cense to an applicant who it determines to be qualified to hold the license.”

Section 19871, subdivision (

a) provides authority for promulgating regulations pertaining to the evidentiary hearing process, and provides a list of items that must be part of the process by stating that “[t]he Commission meeting described in

section 19870 shall be conducted in accordance with regulations of the Commission. . .” EFFECT OF REGULATORY ACTION: Currently, the Commission’s regulations require that four licensing types be approved or denied within 120 days. This timeline is inconsistent with changes made to the regulations in 2014. These modifications maintain the 120−day timeline, but alter the requirements to re- flect the new process.

ANTICIPATED BENEFITS OF PROPOSED REGULATION: This proposed action will have the benefit of provid- ing clarity and consistency in the hearing process by more fully identifying the steps and requirements, cor- recting ambiguities, and providing clear guidance to the Commission, the Bureau, and the applicant, while pro- tecting the applicant’s due process and statutory rights.

SPECIFIC PROPOSAL: This proposed action will make changes within Divi- sion 18 of Title 4 of the California Code of Regulations, as follows: A general change has been made in the proposal to re- place the word “shall” with other words less subject to

interpretation.

CHAPTER 2.1. THIRD−PARTY PROVIDERS OF PROPOSITION PLAYER SERVICES: REGISTRATION; LICENSING.

ARTICLE 3. LICENSING. Amend 12218.7. Processing Times — Request to Convert Registration to License. Subsection (

d) is amended to remove the requirement that an application be approved or denied within 120 days after the receipt of the final written recommenda- tion of the Bureau. This requirement is replaced with a requirement that the Commission will act on the appli- cation, pursuant to

Section 12054, within 120 days after receipt of the Bureau report. This amendment provides for two changes: (1) corrects the 120−day timeline to re- flect the change in the Commission’s approval and de- nial process that was implemented in a previous regula- tory change (OAL File No. 2014−1013−02 S); and, (2) revises the language to use the defined term “Bureau report.”

CHAPTER 2.2. G AMBLING B USINESSES: R EGISTRATION; LICENSING.

ARTICLE 3. LICENSING. Amend 12235. Processing Times — Request to Convert Registration to License. Subsection (

d) is amended to remove the requirement that an application be approved or denied within 120 days after the receipt of the final written recommenda- tion of the Bureau. This requirement is replaced with a requirement that the Commission will act on the appli- cation, pursuant to

Section 12054, within 120 days after receipt of the Bureau report. This amendment provides for two changes: (1) corrects the 120−day timeline to re- flect the change in the Commission’s approval and de- nial process that was implemented in a previous regula- tory change (OAL File No. 2014−1013−02 S); and, (2) 1 Business and Professions Code, Division 8,

Chapter 4,

section 19800 et seq. 2 All statutory references hereinafter are to the Business and Pro- fessions Code, unless otherwise specified.

CALIFORNIA REGULATORY NOTICE REGISTER 2019, VOLUME NO. 17-Z 627 revises the language to use the defined term “Bureau report.”

CHAPTER 6. GAMBLING LICENSES AND APPROV ALS FOR GAMBLING E STABLISHMENTS AND O WNERS; P ORTABLE PERSONAL KEY EMPLOYEE LICENSES.

ARTICLE 2. GAMBLING LICENSES. Amend 12342. Initial Gambling License Applications; Required Forms; Processing Times. Subsection (

d) is amended to remove the requirement that an application be approved or denied within 120 days after the receipt of the final written recommenda- tion of the Bureau. This requirement is replaced with a requirement that the Commission will act on the appli- cation, pursuant to

Section 12054, within 120 days after receipt of the Bureau report. This amendment provides for two changes: (1) corrects the 120−day timeline to re- flect the change in the Commission’s approval and de- nial process that was implemented in a previous regula- tory change (OAL File No. 2014−1013−02 S); and, (2) revises the language to use the defined term “Bureau report.”

ARTICLE 3. P ORTABLE P ERSONAL K EY E MPLOYEE LICENSE. Amend 12350. Initial Licenses; Required Forms; Processing Times. Subsection (

d) is amended to remove the requirement that an application be approved or denied within 120 days after the receipt of the final written recommenda- tion of the Bureau. This requirement is replaced with a requirement that the Commission will act on the appli- cation, pursuant to

Section 12054, within 120 days after receipt of the Bureau report. This amendment provides for two changes: (1) corrects the 120−day timeline to re- flect the change in the Commission’s approval and de- nial process that was implemented in a previous regula- tory change (OAL File No. 2014−1013−02 S); and, (2) revises the language to use the defined term “Bureau report.” CONSISTENCY OR COMPATIBILITY WITH EXISTING STATE REGULATIONS The Commission has evaluated this regulatory action and determined that the proposed regulations are nei- ther inconsistent nor incompatible with any other exist- ing state regulations.

The Commission is vested with jurisdiction and su- pervision over gambling establishments and over all persons or things having to do with the operations of gambling establishments in California. The scope and content of the Commission’s regulations is generally set forth in

section 19841. As provided in subdivision (

a) of

section 19870, the Commission may approve or deny a license “. . . after considering the recommendation of the chief and any other testimony and written comments as may be presented at the meeting. . . ” As provided in subdivision (

a) of

section 19871, “the Commission meeting described in

Section 19870 shall be conducted in accordance with regulations of the commission. . . ” Those regulations that currently implement the Com- mission’s authority to establish hearing procedures are being amended in this proposal. The only equivalent process available to the Commission outside of its regu- latory authority is provided in

section 19825 which pro- vides that “[t]he Commission may require that any mat- ter that the Commission is authorized or required to consider in a hearing or meeting of an adjudicative na- ture regarding the denial. . . of a license. . . be heard and determined in accordance with

Chapter 5 (com- mencing with

Section 11500) of

Part 1 of Division 3 of Title 2 of the Government Code.” While the Bureau [Department of Justice] has also been granted some authority to adopt regulations (sec- tion 19826), that authority is limited to the adoption of regulations reasonably related to its specified duties and responsibilities. These proposed regulations are not in- consistent or incompatible with any Bureau regulation (Title 11, CCR, Division 3), nor do they fall within the Bureau’s authority to adopt regulations. COMPARABLE FEDERAL LAW There are no existing federal regulations or statutes comparable to the proposed regulations.

FISCAL IMPACT ESTIMATES FISCAL I MPACT ON P UBLIC A GENCIES I NCLUDING COSTS OR S AV I N G S TO S TATE A GENCIES OR C OSTS/ SAV I N G S IN FEDERAL FUNDING TO THE STATE: There would be no fiscal impact on the Commission or to any state agencies, including costs or savings or costs/savings in Federal funding. NON−DISCRETIONARY C OST OR S AV I N G S I MPOSED UPON LOCAL AGENCIES: None. MANDATE I MPOSED ON A NY L OCAL A GENCY OR SCHOOL DISTRICT FOR WHICH

PART 7 (COMMENCING WITH S ECTION 17500) OF D IVISION 4 OF THE GOVERNMENT C ODE R EQUIRES R EIMBURSEMENT: None. COST TO ANY LOCAL AGENCY OR SCHOOL DISTRICT FOR WHICH

PART 7 (COMMENCING WITH

SECTION 17500) OF DIVISION 4 OF THE GOVERNMENT CODE REQUIRES REIMBURSEMENT: None. EFFECT ON HOUSING COSTS: None. IMPACT ON BUSINESS: The Commission has made a determination that the proposed regulatory action would have no significant

CALIFORNIA REGULATORY NOTICE REGISTER 2019, VOLUME NO. 17-Z 628 statewide adverse economic impact directly affecting business, including the ability of California businesses to compete with businesses in other states. This deter- mination is based on the following facts or evidence/ documents/testimony: The basis for this determination is that this proposed action imposes no mandatory requirement on business- es or individuals and does not significantly change the Commission’s current practices and procedures.

The proposed action provides a clear and consistent process to follow once a party has decided to submit an applica- tion for Commission consideration. COST IMPACT ON REPRESENTATIVE PRIV ATE PERSON OR BUSINESS: The Commission is not aware of any cost impacts that a representative private person or business would nec- essarily incur in reasonable compliance with the pro- posed action.

EFFECT ON SMALL BUSINESS: The Commission has determined that the proposed regulatory action will not affect small businesses be- cause gambling enterprises, TPPPS and Gambling Businesses are not small businesses as defined in Gov- ernment Code

section 11342.610. RESULTS OF ECONOMIC IMPACT ASSESSMENT/ANALYSIS IMPACT ON JOBS/NEW BUSINESSES: The Commission has determined that this regulatory proposal will not have any impact on the creation of new jobs or businesses, the elimination of existing jobs or businesses, or the expansion of businesses in California. The basis for this determination is that this proposed action imposes no mandatory requirement on business- es or individuals and does not significantly change the Commission’s current practices and procedures.

The proposed action simply makes consistent the timelines related to the issuance of the Commission’s decision. BENEFITS OF PROPOSED REGULATION: This proposed action will have the benefit of provid- ing clarity and consistency in the hearing process by more fully identifying the steps and requirements, cor- recting ambiguities, and providing clear guidance to the Commission, the Bureau, and the applicant, while pro- tecting the applicant’s due process and statutory rights.

CONSIDERATION OF ALTERNATIVES The Commission must determine that no reasonable alternative considered by the Commission or that has otherwise been identified and brought to the attention of the Commission would be more effective in carrying out the purpose for which the action is proposed, would be as effective and less burdensome to affected private persons than the proposed action, or would be more cost−effective to affected private persons and equally effective in implementing the statutory policy or other provision of law.

INITIAL STATEMENT OF REASONS, INFORMATION AND TEXT OF PROPOSAL The Commission has prepared an Initial Statement of Reasons and the exact language for the proposed action and has available all the information upon which the proposal is based. Copies of the language and of the Ini- tial Statement of Reasons, and all of the information up- on which the proposal is based, may be obtained at the hearing or prior to the hearing upon request from the Commission at 2399 Gateway Oaks Drive, Suite 220, Sacramento, CA 95833−4231.

A V AILABILITY AND LOCATION OF THE RULEMAKING FILE AND THE FINAL STATEMENT OF REASONS All the information upon which the proposed action is based is contained in the Rulemaking File that will be available for public inspection and copying at the Com- mission’s office throughout the rulemaking process. Arrangements for inspection and/or copying may be made by contacting the primary contact person named below.

You may obtain a copy of the Final Statement of Rea- sons, once it has been prepared, by making a written re- quest to one of the contact persons named below or by accessing the Commission’s Web site listed below.

CONTACT PERSONS All comments and inquiries concerning the substance of the proposed action should be directed to the follow- ing primary contact person: Joshua Rosenstein, Legislative and Regulatory Specialist Legislation and Regulatory Affairs Division California Gambling Control Commission 2399 Gateway Oaks Drive, Suite 220 Sacramento, CA 95833−4231 Telephone: (916) 274−5823 Fax: (916) 263−0499 E−mail: jrosenstein@cgcc.ca.gov Requests for a copy of the Initial Statement of Rea- sons, proposed text of the regulation, modified text of the regulation, if any, or other technical information up-

CALIFORNIA REGULATORY NOTICE REGISTER 2019, VOLUME NO. 17-Z 629 on which the proposed action is based should be direct- ed to the following backup contact person: Alex Hunter, Legislative and Regulatory Specialist Legislation and Regulatory Affairs Division California Gambling Control Commission 2399 Gateway Oaks Drive, Suite 220 Sacramento, CA 95833−4231 Telephone: (916) 263−1301 Fax: (916) 263−0499 E−mail: ahunter@cgcc.ca.gov WEB SITE ACCESS Materials regarding this proposed action are also available on the Commission’s website at www.cgcc. ca.gov. TITLE 4.

CALIFORNIA HORSE RACING BOARD TITLE 4, DIVISION 4, CALIFORNIA CODE OF REGULATIONS NOTICE OF PROPOSAL TO AMEND RULE 1588. HORSE INELIGIBLE TO START IN A RACE AND RULE 1866. VETERINARIAN’S LIST The California Horse Racing Board (Board or CHRB) proposes to amend the regulations described below after considering all comments, objections or recommendations regarding the proposed action. PROPOSED REGULATORY ACTION The Board proposes to amend Rule 1588, Horse Inel- igible to Start in a Race.

The proposed amendment will add a new subsection 1588(a)(14) to provide that any horse that has not raced within 12 consecutive months since its previous start is ineligible to start in a race until such horse has performed satisfactorily in a workout or a standardbred qualifying race as provided in subsec- tions (

e) and (

f) of Rule 1866, Veterinarian’s List. In ad- dition, the proposed amendment of Rule 1588 will add a new subsection 1588(a)(15) to provide that a horse that has never started in a race, and that is four years of age or older, is ineligible to start in a race until such horse has performed satisfactorily in a workout or a standardbred qualifying race as provided in Rule 1866(

e) and (f). The proposed amendment to Rule 1866 will modify subsec- tion 1866(

e) to make it clear that qualifying races are standardbred events. PUBLIC HEARING The Board will hold a public hearing starting at 9:30 a.m., Thursday, June 20, 2019, or as soon thereafter as business before the Board will permit, at the Santa Ani- ta Park Race Track, 285 Huntington Drive, Arcadia, California. At the hearing, any person may present statements or arguments orally or in writing relevant to the proposed action described in the informative digest. It is requested, but not required, that persons making oral comments at the hearing submit a written copy of their testimony.

WRITTEN COMMENT PERIOD Any interested persons, or their authorized represen- tative, may submit written comments about the pro- posed regulatory action to the Board. The written com- ment period closes at 5:00 p.m. on June 11, 2019. The Board must receive all comments at that time; however, written comments may still be submitted at the public hearing.

Submit comments to: Harold Coburn California Horse Racing Board 1010 Hurley Way, Suite 300 Sacramento, CA 95825 Telephone: (916) 263−6026 Fax: (916) 263−6022 E−mail: haroldc@chrb.ca.gov AUTHORITY AND REFERENCE Authority: Sections 19440 and 19562, Business and Professions Code. Reference: Sections 19440, 19562 Business and Pro- fessions Code. INFORMATIVE DIGEST/POLICY STATEMENT OVERVIEW Business and Professions Code

section 19440 pro- vides the Board shall have all powers necessary and proper to enable it to carry out fully and effectually the purposes of this chapter. Responsibilities of the Board shall include adopting rules and regulations for the pro- tection of the public and the control of horse racing and pari−mutuel wagering. Business and Professions Code

section 19562 states the Board may prescribe rules, reg- ulations and conditions under which all horse races with wagering on their results shall be conducted in Califor-

CALIFORNIA REGULATORY NOTICE REGISTER 2019, VOLUME NO. 17-Z 630 nia. Business and Professions Code

section 19580 pro- vides that the Board shall adopt regulations to establish policies, guidelines, and penalties relating to equine medication to preserve and enhance the integrity of horse racing in the state. The CHRB tracks horse fatalities that occur at any fa- cility under its jurisdiction. Horses may suffer fatalities while racing, training, or due to other non−exercise re- lated causes, including stable area accidents or medical maladies such as gastro−intestinal, respiratory, or neu- rological diseases.

One of the primary purposes of tracking such fatalities is to identify health and safety risks for horse and rider, and to implement preventive or corrective actions. At the February 2017 CHRB Medi- cation, Safety and Welfare Committee meeting, staff re- ported that a survey of California racehorse fatalities occurring 2013 through 2016 revealed that twenty per- cent of the losses were horses that raced after an extend- ed lay−off.

At the recommendation of the Board’s Equine Medical Director, the Committee endorsed a proposal to amend Rule 1588 to require that horses re- turning from an extended layoff demonstrate their physical fitness prior to being entered to race. The pro- posed amendment will aid in the reduction of race horse injuries and fatalities by providing that a horse will not be allowed to start in a race after a 12−month layoff, un- less it is found to be raceably sound and in fit physical condition to exercise its best efforts in a race.

The proposed amendment to Rule 1588 would add a new subsection 1588(a)(14), which provides that a horse that has not raced at a recognized race meeting within 12 consecutive months is ineligible to start in any race until such horse has performed satisfactorily in a workout or standardbred qualifying race as provided in Rule 1866(

e) and (f). A “recognized race meeting” is the entire period of a race meeting conducted by an as- sociation within the inclosure of the designated grounds, for which the Board has granted a license. The term may include a meeting conducted by an associa- tion in another horse racing jurisdiction. As provided under Rule 1866(e), the proposed amendment gives the official veterinarian the ability to have the horse per- form satisfactorily in a workout or standardbred quali- fying race to demonstrate its physical fitness. Post− work blood and urine test samples shall be taken from such horse and the provision of

Article 6 shall apply to such official workouts in the same manner as a sched- uled race. A demonstration of the horse’s physical fit- ness is necessary because an extended layoff from rac- ing removes the horse from racing−level training. De- spite an owner’s expectations, the horse may not be able keep up with the rigors of racing. In addition, the horse may have been laid off from racing because of injuries. The required workout will give the official veterinarian a chance to evaluate the horse to determine if it has fully recovered.

The post−work test samples are necessary to ensure the horse is not running on medications or drug substances designed to mask its true condition. The pro- posed addition of subsection 1588(a)(14) is in line with the Association of Racing Commissioners International (ARCI) Model Rules of Racing, Rule ARCI−010−030 Horses Ineligible, which provides that a horse is ineligi- ble to start in a race when it has not raced in 12 months since its previous start, until the horse has been subject- ed to an assessment of its racing condition, including the taking of post−workout blood and urine test sam- ples.

The ARCI is the only umbrella organization of the official governing rule making bodies for professional horse racing in North America. It sets standards for rac- ing regulation, medication policy, drug testing and all other aspects of the sport. California’s adoption of AR- CI Model Rule guidelines brings the Board’s regula- tions in line with ARCI recommendations and promotes uniformity in the various states’ horse racing regula- tions. Such uniformity benefits horsemen who may race in more than one jurisdiction, as a similar regulatory scheme will apply from state to state.

A new subsection 1588(a)(15) provides that a horse that has never started in a race, and that is four years of age or older, is ineligible to start in a race until such horse has performed satisfactorily in a workout or a standardbred qualifying race as provided in Rule 1866(

e) and (f). All race horses turn one year old on Jan- uary 1 of the year following their birth. A horse may start its racing career at two years of age; however, in California, a horse must actually have reached its sec- ond birth date before it can enter into a race (For exam- ple: a horse born on May 9, 2016 would not be eligible to enter into a race until May 9, 2018.). Nationally, older horses have made up a large part of the racing popula- tion with an estimated one−third of the horse racing population at least five years old.

Some states enforce age restrictions for Thoroughbreds, and the United States Trotting Association (USTA) enforces a Stan- dardbred retirement age of 14 years. 1 California does not have an age cut off for racing (although it honors the USTA rule). Horses as old, or nearly as old, as 13 years of age regularly compete in North American races. However, it has been demonstrated that un−started four−year−old horses (and older) are at a greater risk of injury than horses that started racing earlier in their ca- reer.

Although the reason for this is not clear, some hors- es may start later because of ongoing health issues, or confirmation or soundness issues. A report from the Equine Injury Database (EID), which looked at all Cali- 1 USTA Rule 19−Racing Under Saddle,

section 19.04. Age and Gait of Horse. No horse under the age of three (3) and no older than fourteen (14) years of age shall be eligible to start. Racing Under Saddle races shall be restricted to the trotting gait.

CALIFORNIA REGULATORY NOTICE REGISTER 2019, VOLUME NO. 17-Z 631 fornia races during the study, states that first time starters four years old and older have an increased chance of injury. The EID found that four−year−old first−time starters were 33% more likely to have an in- jury than two−year olds. The proposed addition of sub-

section 1588(a)(15) is necessary to help ensure that horses four years old and older, that are first time starters, are raceably sound and in fit physical condition to exert their best effort in a race. The proposed amend- ment is in line with the ARCI Model Rules of Racing, Rule ARCI−010−030 Horses Ineligible, which pro- vides that a horse is ineligible to start in a race when it is a first−time starter four years of age or older, until the horse has been subjected to an assessment of its racing condition, including the taking of post−workout blood and urine test samples. The proposed amendment to Rule 1866 will modify subsection 1866(

e) to provide clarity regarding the term “qualifying race.” As used in Rules 1588 and 1866, the term refers to standardbred qualifying races. Qualifying races are purse−less races that are required for horses that break stride too often, behave badly before or dur- ing races, that fail to produce speed up to the local stan- dard or that have been sidelined by illness or injury. Es- sentially, qualifying races assure the public that a horse permitted to start in an event with pari−mutuel wager- ing is fit for competition.

POLICY STATEMENT OVERVIEW OF ANTICIPATED BENEFITS OF PROPOSAL The proposed amendment to Rule 1588 would add a new subsection 1588(a)(14). The new subsection pro- vides that a horse that has not raced at a recognized race meeting within 12 consecutive months is ineligible to start in any race until such horse has performed satisfac- torily in a workout or standardbred qualifying race as provided in Rule 1866(

e) and (f). Post−work blood and urine test samples shall be taken from such horse and the provisions of

Article 6 shall apply to such official workouts in the same manner as a scheduled race. The proposed addition of subsection 1588(a)(14) will promote the health and safety of racehorses and race- track safety in general. The amendment will aid in the reduction of injuries to horses, or worse, catastrophic loss of racehorses, by requiring horses that have not raced within 12 consecutive months to be examined by the official veterinarian or racing veterinarian and de- clared raceably sound and in fit physical condition to exert their best effort, before being allowed to enter to race.

In turn, the health and safety of jockeys will be ad- vanced, as a reduction in equine injuries and sudden deaths may also mean lower jockey injury rates. The re- quired examination provides an opportunity for the ex- amining veterinarian to evaluate the condition of the horse, which by virtue of being off 12 consecutive months or longer, may have had physical challenges that required time to heal or recuperate. Blood and urine test samples taken after a workout or qualifying race will provide additional information as to the fit physical condition of a horse that has not raced within 12 consec- utive months.

The addition of subsection 1588(a)(14) serves to ensure that a horse that has not raced within 12 consecutive months is raceably sound and in fit physi- cal condition to exert its best efforts in a race. Ensuring the health of race horses protects the financial interests of racing associations, horse owners, trainers and jock- eys. Racing associations depend on an inventory of sound horses to fill races and generate handle; owners and trainers suffer financial losses when horses are un- able to compete for a purse; and injured jockeys lose in- come when they are unable to ride.

The proposed amendment to Rule 1588 adds a new subsection 1588(a)(15) to provide that a horse that has never started in a race, and that is four years of age or older, is ineligible to start in a race until such horse has performed satisfactorily in a workout or a standardbred qualifying race as provided in Rule 1866(

e) and (f). The addition of subsection 1588(a)(15) will promote the health and safety of race horses. It has been demonstrat- ed that un−started four−year−old horses (and older) are at a greater risk of injury than horses that started racing earlier in their career. A report from the Equine Injury Data Base, which looked at all California races during the study, states that first time starters four years old and older have an increased chance of injury. The health and safety of jockeys will also be advanced, as a reduction in equine injuries and sudden deaths may also mean lower jockey injury rates.

Ensuring the health of race horses protects the financial interests of racing associations, horse owners, trainers and jockeys. Racing associations depend on an inventory of sound horses to fill races and generate handle; owners and trainers suffer financial losses when horses are unable to compete for a purse; and injured jockeys lose income when they are unable to ride. The proposed amendment of Rule 1866 will change subsection 1866(

e) to provide clarity regarding “quali- fying races,” which are also referenced in Rule 1588. As used in the regulations, a qualifying race is a standard- bred event. Qualifying races are purse−less races that are required for standardbred horses that break stride too often, behave badly before or during races, that fail to produce speed up to the local standard or that have been sidelined by illness or injury. Essentially, qualify- ing races assure the public that a standardbred horse permitted to start in an event with pari−mutuel wager- ing is fit for competition. The proposed amendment of Rule 1866 will work in conjunction with the amended

CALIFORNIA REGULATORY NOTICE REGISTER 2019, VOLUME NO. 17-Z 632 Rule 1588 to provide clarity regarding the racing terms used in the regulations. Standardbred qualifying races ensure the soundness of horses entered to race. Sound racehorses help protect the health and safety of drivers, as well as the financial interests of racing associations, owners and trainers.

CONSISTENCY EV ALUATION During the process of developing these regulations and amendments, the CHRB has conducted a search of any similar regulations on this topic and has concluded that these regulations are neither inconsistent nor in- compatible with existing state regulations. DISCLOSURE REGARDING THE PROPOSED ACTION/RESULTS OF THE ECONOMIC IMPACT ANALYSIS Mandate on local agencies or school districts: none. Cost or savings to any state agency: none. Cost to any local agency or school district that must be reimbursed in accordance with Government Code

Section 17500 through 17630: none. Other non−discretionary cost or savings imposed up- on local agencies: none. Cost or savings in federal funding to the state: none. The Board has made an initial determination that the proposed amendment to Rule 1588 and Rule 1866 will not have a significant statewide adverse economic im- pact directly affecting business including the ability of California businesses to compete with businesses in other states. The following studies/relevant data were relied upon in making the above determination: Association of Racing Commissioners International Model Rules of Racing Version 8.4.1. Parkin, Tim

(2015) Equine Injury Database — models, risk factor and prediction (PowerPoint slides) Georgopoulos, Stamatis P., Parking, Tim D.H., “Risk factors for equine fractures in Thoroughbred flat racing in North America.” Preventive Veterinary Medicine 139 (2017) 99−104. Cost impact on representative private persons or businesses: The Board is not aware of any cost impacts that a representative private person or business would necessarily incur in reasonable compliance with the proposed action. Significant effect on housing costs: none.

RESULTS OF THE ECONOMIC IMPACT ASSESSMENT The adoption of the proposed amendment to Rule 1588 and Rule 1866 will not (1) impact the creation of, or eliminate jobs within the State of California; (2) im- pact the creation of new businesses or eliminate exist- ing businesses within California; or (3) affect the ex- pansion of businesses currently doing business within California.

The proposed amendment to amendment to Rule 1588 and Rule 1866 is a benefit to the health and welfare of California residents who hold occupational licenses as jockey, apprentice jockeys or other licensees that re- quire proximity to race horses, because the proposed regulations safeguard the health and safety of the Cali- fornia’s racing equines. Sound racehorses help prevent accidents and injuries to horse and rider. The proposed amendment will not benefit the state’s environment. Effect on small businesses: none.

The proposal to amend amendment to Rule 1588 and Rule 1866 does not affect small businesses because horse racing is not a small business under Government Code

Section 11342.610. CONSIDERATION OF ALTERNATIVES In accordance with Government Code

Section 11346.5, subdivision (a)(13), the Board must determine that no reasonable alternative considered by the Board, or that has otherwise been identified and brought to the attention of the Board, would be more effective in car- rying out the purpose for which the action is proposed, or would be as effective and less burdensome on affect- ed private persons than the proposed action, or would be more cost−effective to affected private persons and equally effective in implementing the statutory policy or other provisions of law.

The Board invites interested persons to present state- ments or arguments with respect to alternatives to the proposed regulation at the scheduled hearing or during the written comment period. CONTACT PERSON Inquiries concerning the substance of the proposed action and requests for copies of the proposed text of the regulation, the initial statement of reasons, the modified text of the regulation, if any, and other information upon which the rulemaking is based should be directed to:

CALIFORNIA REGULATORY NOTICE REGISTER 2019, VOLUME NO. 17-Z 633 Harold Coburn Regulation Analyst California Horse Racing Board 1010 Hurley Way, Suite 300 Sacramento, CA 95825 Telephone: (916) 263−6026 Fax: (916) 263−6022 E−mail: haroldc@chrb.ca.gov If the person named above is not available, interested parties may contact: Andrea Ogden, Manager Policy, Regulations and Legislation Telephone: (916) 263−6033 A V AILABILITY OF INITIAL ST ATEMENT OF REASONS AND TEXT OF PROPOSED REGULATION The Board will have the entire rulemaking file avail- able for inspection and copying throughout the rule- making process at its offices at the above address.

As of the date this notice is published in the Notice Register, the rulemaking file consists of this notice, the proposed texts of the regulations, and the initial statement of rea- sons. Copies of these documents, or any of the informa- tion upon which the proposed rulemaking is based on, may be obtained by contacting Harold Coburn, or the alternative contact person at the address, phone number or e−mail address listed above.

A V AILABILITY OF MODIFIED TEXT After holding a hearing and considering all timely and relevant comments received, the Board may adopt the proposed regulation substantially as described in this notice. If modifications are made which are suf fi- ciently related to the originally proposed texts, the mod- ified texts, with changes clearly marked, shall be made available to the public for at least 15 days prior to the date on which the Board adopts the regulations. Re- quests for copies of any modified regulations should be sent to the attention of Harold Coburn at the address stated above.

The Board will accept written comments on the modified regulation for 15 days after the date on which it is made available. A V AILABILITY OF FINAL ST ATEMENT OF REASONS Requests for copies of the final statement of reasons, which will be available after the Board has adopted the proposed regulation in its current or modified form, should b e sent to the attention of Harold Coburn, at the address stated above. BOARD WEB ACCESS The Board will have the entire rulemaking file avail- able for inspection throughout the rulemaking process at its web site.

The rulemaking file consists of the no- tice, the proposed text of the regulations and the initial statement of reasons. The Board’ s website address is: www.chrb.ca.gov. TITLE 4. CALIFORNIA HORSE RACING BOARD TITLE 4, DIVISION 4, CALIFORNIA CODE OF REGULATIONS NOTICE OF PROPOSAL TO AMEND RULE 1581.1. ENTRIES AND RULE 1597.5. MICROCHIPS REQUIRED FOR ALL HORSES ON GROUNDS The California Horse Racing Board (Board/CHRB) proposes to amend the regulations described below a f- ter considering all comments, objections or recommen- dations regarding the proposed action.

PROPOSED REGULATORY ACTION The Board proposes to amend Rule 1581.1, Entries, a nd Rule 1597.5, Microchips Required for all Horses on Grounds. The proposed amendment to Rule 1581.1 will delete subsection 1581.1(a)(4), which prohibits a horse that does not carry a microchip or has not received a mi- crochip waiver from the stewards, from entering to race.

The proposed amendment to Rule 1597.5 will change the title of the regulation to “Microchips Re- quired for all Race Horses on Grounds.” The change re- flects the fact that the microchipping requirement ap- plies only to race horses, and not to pony or companion horses. In addition, the proposed amendment will des- ignate the horse identifier as the person who shall be in- formed of the horse’s microchipping rather than the stewards and stable superintendent.

The proposed amendment to Rule 1597.5 also removes the require- ment for posting signage on stall of horses that do not carry a microchip; deletes the requirement that a horse must be implanted with a microchip within 72 hours of arriving on the grounds; removes the requirement that a horse that has not been microchipped within 72 hours of coming onto the grounds be removed from the premis- es; and extends the 72 hour deadline for microchipping a horse to within 7 days of arriving on the grounds of the racetrack. The proposed amendment to Rule 1597.5 al-

CALIFORNIA REGULATORY NOTICE REGISTER 2019, VOLUME NO. 17-Z 634 so expands the stewards’ authority to grant a microchip- ping waiver. Waivers may be granted for any single race rather than only for stakes races. Further, waivers will remain in effect for 7 days rather than 72 hours. Finally, Rule 1597.5 will be amended to allow horses without a microchip to enter to race. Horses without a microchip may be entered to race, provided they are microchipped prior to the actual race. All other changes to the regula- tions are for the purposes of clarity and consistency.

PUBLIC HEARING The Board will hold a public hearing starting at 9:30 a.m., Thursday, June 20, 2019, or as soon after that as business before the Board will permit, at the Santa Ani- ta Park Race Track, 285 West Huntington Drive, Arcadia, California. At the hearing, any person may present statements or arguments orally or in writing about the proposed action described in the informative digest. It is requested, but not required, that persons making oral comments at the hearing submit a written copy of their testimony.

WRITTEN COMMENT PERIOD Any interested persons, or their authorized represen- tative, may submit written comments about the pro- posed regulatory action to the Board. The written com- ment period closes at 5:00 p.m., on June 11, 2019. The Board must receive all comments at that time; however, written comments may still be submitted at the public hearing.

Submit comments to: Harold Coburn, Regulation Analyst California Horse Racing Board 1010 Hurley Way, Suite 300 Sacramento, CA 95825 Telephone (916) 263−6026 Fax: (916) 263−6042 E−Mail: haroldc@chrb.ca.gov AUTHORITY AND REFERENCE Authority cited: Sections 19420, 19440, 19562, and 19590, Business and Professions Code. Reference: Sections 19440, and 19562, Business and Professions Code.

Business and Professions Code sections 19420, 19440, 19562, and 19590 authorize the Board to adopt the proposed regulations, which would implement, in- terpret or make specific sections 19440, and 19562, Business and Professions Code. INFORMATIVE DIGEST/POLICY STATEMENT OVERVIEW Business and Professions Code

section 19420 states that the Board has jurisdiction and supervision over meetings in this State where horse races with wagering on their results are held or conducted, and over all per- sons or things having to do with the operation of such meetings. Business and Professions Code

section 19440 provides that the Board shall have all powers necessary and proper to enable it to carry out fully and effectually the purposes of this chapter. Responsibili- ties of the Board shall include adopting rules and regu- lations for the protection of the public and the control of horse racing and pari−mutuel wagering. Business and Professions Code

section 19562 states the Board may prescribe rules, regulations and conditions under which all horse races with wagering on their results shall be conducted in California. Business and Professions Code

section 19590 provides that the Board shall adopt rules governing, permitting, and regulation pari− mutuel wagering on horse races under the system known as the pari−mutuel method of wagering. In January 2018, the proposed addition of rules gov- erning the microchipping of race horses in California were approved by the Office of Administrative Law. The effective date of the regulations was delayed until December 26, 2018 to provide time for the implementa- tion of the Board’s microchipping program.

The delay was necessary because under the microchipping regula- tions, race horses that do not carry a microchip, or that have not been granted a microchip waiver by the stew- ards, could not be entered to race. By December 2018, however, there were still a significant number of horses without microchips, and it became evident that races might be cancelled if horses not carrying a microchip could not be entered.

In January 2019, the Board ex- tended the delayed implementation of its microchip- ping regulations and determined that it was necessary to revise Rules 1581.1 and 1597.5 to ensure that the mi- crochipping of race horses would not interrupt the entry of horses to race. The proposed amendment to Rule 1581.1 will delete subsection 1581.1(a)(4). Subsection (a)(4) of Rule 1581.1 currently provides that a race horse that does not carry a microchip, or that has not been granted a mi- crochip waver by the stewards, cannot be entered to race.

The Board has determined that this provision is impractical and may have a detrimental effect on racing associations’ ability to fill races. Horses that are ready to race are routinely brought onto the racetrack inclo- sure prior to entry and well before race day. Entries are taken 3 to 6 days prior to the race. The fact that the horse will be at the track before entries are taken provides am- ple time for a horse that does not carry a microchip to

CALIFORNIA REGULATORY NOTICE REGISTER 2019, VOLUME NO. 17-Z 635 have the procedure completed. Under the proposed amendments to rules 1581.1 and 1597.5, a horse that does not carry a microchip will be allowed to enter to race, but it cannot start in a race if it has not had the pro- cedure completed prior to such race. The amendments are consistent with the provisions of Rule 1588, Horse Ineligible to Start in a Race, which prohibits a horse that does not carry a microchip, or that has not received a waiver from the stewards, from starting in a race.

The change to the regulations will ensure that racing associ- ations can fill their race cards while also ensuring that no un−chipped horse starts in a race unless a waiver has been granted. The proposed amendments to the regula- tions necessitate the deletion of subsection 1581.1(a)(4). Rule 1597.5 is currently entitled “Microchips Re- quired for all Horses on Grounds.” The proposed amendment will change the title to: “Microchips Re- quired for all Race Horses on Grounds.” The change is being made for purposes of clarity, as not all horses found at racing or training facilities are race horses.

Pony horses are used in the post parade (the procession of race horses from the paddock to their placement at the start) and in workouts. The Pony Rider assists in controlling other, usually younger and more fractious horses. Pleasure horses may also be in use at the race- track; an example is a trainer observing the morning workout while mounted. The amended title will make it clear that only race horses must be microchipped. Subsection 1597.5(a)(1) has been re−worded for pur- poses of clarity. The intended meaning of the sentence, however, will not change.

Rule 1597.5 currently assigns multiple racing offi- cials with responsibility for different aspects of the mi- crochipping program; the Board of Stewards, the stable superintendent and the horse identifier all have roles. The division of microchipping tasks among multiple parties could result in confusion for racing association staff or licensees and increase the time it takes to get a race horse microchipped.

The Board has determined that designating one racing official as the point of con- tact for microchipping will help eliminate confusion that may result when multiple officials have responsi- bility for different parts of the program. The proposed change will also reduce the time and effort a licensee will have to expend to get his or her horse mi- crochipped. Throughout Rule 1597.5, specifically sub- sections (a)(1)(A), (a)(1)(B), (a)(5)(A), (a)(5)(D), the horse identifier has been designated as the official who shall supervise and oversee the microchipping proce- dure.

This will provide one point of contact for mi- crochipping, eliminate possible confusion, and stream- line the procedure for licensees. Subsection 1597.5(a)(1)(C), which requires that signs be posted on the stalls of horses that do not carry a microchip, has been deleted. Stable populations are not static. Trainers ship horses to and from the race track. With the constant movement of horses, it is not unusual for trainers to move horses from stall to stall within their barns, which would require that any signage also be moved with the horses.

This creates the possibility for mistakes and confusion resulting from signage not be- ing moved or placed on the wrong stall. In addition, the proposed amendment to Rule 1597.5 designates the horse identifier as the official who shall be informed if a horse does not carry a microchip, which renders signs redundant and unnecessary. Subsection 1597.5(a)(1)(D), which requires that a horse be implanted with a microchip within 72 hours of arriving on the grounds, has been deleted.

The provi- sion is no longer necessary, as the proposed amendment to Rule 1597.5 will change the timeframe for the mi- crochipping of race horses. Under subsection 1597.5(a)(2), the proposed amendment extends the mi- crochipping deadline to 7−days (168 hours), which will allow for microchipping even after entry to race. Subsection 1597.5(a)(2) has been amended to change the requirement that horses be removed from the premises if not microchipped within 72 hours of com- ing onto the grounds.

The 72−hour deadline has been extended to 7 days, which ensures adequate time for the microchipping procedure to be completed. The 72−hour deadline is not necessary as horses that are ready to race are routinely brought onto the racetrack inclosure prior to entry and well before race day. Entries are taken 3 to 6 days prior to the race. The fact that the horse will be at the track before entries are taken pro- vides ample time for a horse that does not carry a mi- crochip to have the procedure completed.

The extended deadline will also provide adequate time for the trainer or owner to seek a waiver from the stewards, if necessary. Subsection 1597.5(a)(3) currently provides that the stewards may grant a waiver from the microchip re- quirements for horses shipped in from another racing jurisdiction for the purposes of participating in a stakes race. The purpose of the waiver was to ensure that out− of−state owners and trainers would not be discouraged from participating in California stakes races.

The pro- posed amendment to subsection 1597.5(a)(3) expands the stewards’ authority to grant a waiver, by allowing waivers to be granted to horses from any racing jurisdic- tion and in any single race. The Board determined there may be circumstances wherein a California horse may need a waiver. A horse may have been trained on the farm or a private training center and shipped in late for a

CALIFORNIA REGULATORY NOTICE REGISTER 2019, VOLUME NO. 17-Z 636 race. Additionally, there have been instances where the horse has been microchipped, but the chip fails to read when the horse is “waned” prior to racing. 1 Limiting waivers to stakes races placed an unnecessary restric- tion on the stewards’ authority. Under Board Rule 1527, the stewards have general authority and supervision over all licensees, the inclosure of any recognized race meeting, and are responsible to the Board for the con- duct of the race meeting.

The stewards should be able to determine when and under what circumstances a waiver may be granted. Subsection 1597.5(a)(3) currently provides that a trainer or owner must apply for a microchipping waiver at least 24 hours before the horse is to arrive on the grounds. The 24−hour lead time allowed for the grant- ing of the waiver prior to entry, as without a waiver, an unchipped horse could not enter to race. The proposed amendment provides that requests for waivers shall be submitted at time of entry. The proposed amendment al- lows horses without microchips to enter to race.

If a waiver is denied, there would still be time for the horse to receive a microchip prior to racing. Under the current regulation, a waiver expires 72 hours after the running of the race for which it is granted. The expiration date has been modified to 7 days. The extended time for waivers is consistent with the amendment of subsection (D)(2), which states that a horse that has not received a microchip after 7 days from the time it arrives at the in- closure shall be removed from the grounds.

The 7−day expiration of a microchip waiver provides time for a horse to be microchipped, or shipped off the grounds of the racing association, racing fair, or authorized train- ing facility.

If a microchipping waiver is granted, subsection 1597.5(a)(3) currently requires the trainer to post the CHRB Form 235, Horse Not Microchipped (New 04/16) (CHRB 235), on the individual stall in which the horse is stabled until the horse is removed from the grounds of the racing association, racing fair, or autho- rized training facility. (The CHRB 235 is incorporated by reference in Rule 1597.5.) The proposed amendment to Rule 1597.5 removes the requirement. It is not un- usual for a horse to be moved from stall to stall within a barn, requiring that the signage be moved with the horse.

This creates the possibility for mistakes and con- fusion resulting from signage not being moved. In addi- tion, the proposed amendment to Rule 1597.5 desig- nates the horse identifier as the official who shall be in- formed if a horse does not carry a microchip. The horse identifier will have possession of copies of the identifi- 1 Horses entered to race are taken to the receiving barn at least one hour prior to the race. At that time the horses are identified and examined by the racing veterinarian.

The identification process will include reading/scanning the microchip. cation papers of every race horse within the inclosure. The papers describe the horse and state if it is mi- crochipped. Because the CHRB 235 is no longer re- quired under Rule 1957.5, and its use is not required un- der any other CHRB regulation, the form has been repealed. Under the proposed amendment of subsection 1597.5(a)(3), a horse may receive only one waiver per race meeting. The provision will ensure trainers and owners do not routinely request microchip waivers for the same horse.

Subsection 1597.5(a)(4) currently provides that a horse that has not been implanted with a microchip, or has not been granted a waiver, shall not be eligible to en- ter or participate in a race. The proposed amendment modifies subsection (a)(4) to provide that a horse that has not been implanted with a microchip, or granted a waiver, may not start in a race. The proposed change to the subsection is consistent with the proposed amend- ment of Rule 1581.1, which also eliminates the prohibi- tion on unchipped horses entering to race.

Additionally, the modification of subsection 1597.5(a)(4) is consis- tent with the provisions of Rule 1588, which prohibits a horse that does not carry a microchip, or that has not re- ceived a waiver from the stewards, from starting in a race. The proposed amendment deletes subsection 1597.5(a)(5). The subsection currently states the racing secretary will not accept entries from horses whose mi- crochipping cannot be verified, or that have not re- ceived a waiver.

Under the proposed amendment, how- ever, the subsection is not necessary, as Rule 1597.5 will allow horses without microchips to be entered, pro- vided they are microchipped, or have received a mi- crochipping waiver, prior to the actual race. POLICY STATEMENT OVERVIEW OF ANTICIPATED BENEFITS OF PROPOSAL The proposal to amend Rule 1581.1 will delete sub-

section 1581.1(a)(4), which prohibits a horse that does not carry a microchip or has not received a microchip waiver from the stewards, from entering to race. The proposed amendment to Rule 1597.5 will change the ti- tle of the regulation to “Microchips Required for all Race Horses on Grounds.” The change reflects the fact that the microchipping requirement applies only to race horses, and not to pony or companion horses. In addi- tion, the proposed amendment will designate the horse identifier as the person who shall be informed of the horse’s microchipping rather than the stewards and sta- ble superintendent.

The proposed amendment to Rule 1597.5 also removes the requirement for posting sig- nage on stall of horses that do not carry a microchip; deletes the requirement that a horse must be implanted

CALIFORNIA REGULATORY NOTICE REGISTER 2019, VOLUME NO. 17-Z 637 with a microchip within 72 hours of arriving on the grounds; removes the requirement that a horse that has not been microchipped within 72 hours of coming onto the grounds be removed from the premises; and extends the 72 hour deadline for microchipping a horse to with- in 7 days of arriving on the grounds of the racetrack. The proposed amendment to Rule 1597.5 also expands the stewards’ authority to grant a microchipping waiver. Waivers may be granted for any single race rather than only for stakes races.

Further, waivers will remain in ef- fect for 7 days rather than 72 hours. Finally, Rule 1597.5 will be amended to allow horses without a microchip to enter to race. Horses without a microchip may be en- tered to race, provided they are microchipped prior to the actual race. All other changes to the regulations are for the purposes of clarity and consistency.

The pro- posed regulation will help to implement a horse identi- fication system that utilizes state−of−the−art microchip technology to implement an accurate process of regular inventory reporting and horse movement tracking at all California racetrack and training facilities. The mi- crochipping program will replace a cumbersome paper system that did not allow for timely reporting of race horse inventory throughout the state.

The proposed amendment to Rule 1581.1 will allow horses that do not carry a microchip to enter to race which will encourage owners and trainers of such horses to race in California, as their un−chipped horses will have ample time to have the procedure completed prior to race day. The pro- posed amendment to Rule 1597.5 streamline the mi- crochipping procedure and provide clarity for owners and trainers whose horses have not been microchipped.

By implanting uniquely assigned microchips into ev- ery race horse that comes onto the grounds of a licensed racing or training facility, the Board, as well as racing associations and fairs, will be able to significantly im- prove horse inventory reporting and horse identifica- tion. Such information will benefit the Board by en- abling it to make more informed decisions about how many stalls an association or fair should be required to have for a race meet based on historic inventory.

This will ensure that the associations are able to meet the sta- bling demands of a race meeting while not overspend- ing to make unused stalls available. These proposed regulations will also benefit Board staff in determining whether a race horse is on the grounds of a licensed rac- ing or training facility, which will aid investigations as well as the Board’s out−of−competition testing pro- gram. Additionally, the proposed regulations will re- duce the likelihood that a race horse will be misidenti- fied and allowed to participate unlawfully in a horse race.

The proposed regulations will also benefit racing as- sociations and fairs by enhancing their ability to meet their inventory reporting obligations under CHRB reg- ulations. Also, the proposed regulations will give racing secretaries (who are employees of the associations and fairs) a tool to assist them in determining which races to hold on which days. By knowing exactly which horses are on the grounds, racing secretaries will be able to gauge which types of races will receive adequate entries based on the population of horses meeting the requisite criteria (i.e. race conditions).

Furthermore, the proposed regulations will increase public health and safety by helping prevent the spread of infectious equine diseases. Given the constant move- ment of race horses to different facilities throughout the state, country, and world, these animals can sometimes contribute to the spread of infectious diseases. For ex- ample, states like Louisiana and New Mexico have ex- perienced several Equine Infectious Anemia (EIA) out- breaks in the past several years.

When such an outbreak occurs, it becomes necessary to immediately quarantine those horses entering California that were exposed to the disease, which requires rapid identification of the animal. Finally, the proposed regulations will also benefit the wagering public by ensuring no horses participating in a race are misidentified. When determining which horse to wager on, bettors often consider a horse’s past perfor- mance in racing and training.

If another horse partici- pates in that horse’s stead though−whether by accident or on purpose−and the public is not aware, there is a de- ception on those wagering that may negatively impact their chances of winning. Although Horse Identifiers are entrusted to perform this function using descriptive foal certificates and unique tattoo numbers, the pro- posed regulations will give these officials yet another tool to verify their identifications.

This will therefore further reduce the already low rate of error in horse identification and instill greater public confidence that the horses participating in a race have all been properly identified.

Evaluation of Consistency and Compatibility with Existing State Regulations: During the process of de- veloping the proposed amendments, the Board has con- ducted an evaluation for any related regulations and has determined that Rule 1581.1 is the only regulation deal- ing with the entry of horses to race and Rule 1597.5 is the only rule dealing with microchipping procedures of race horses on the grounds of a race track with regards to horse racing in California. Therefore, the proposed reg- ulations are neither inconsistent nor incompatible with existing state regulations.

CALIFORNIA REGULATORY NOTICE REGISTER 2019, VOLUME NO. 17-Z 638 DISCLOSURE REGARDING THE PROPOSED ACTION Mandate on local agencies and school districts: none. Cost or savings to any state agency: none. Cost to any local agency or school district that must be reimbursed in accordance with Government Code sections 17500 through 17630: none. Other non−discretionary costs or savings imposed upon local agencies: none. Cost or savings in federal funding to the State: none.

The Board has made an initial determination that the proposed amendment to Rule 1581.1 and Rule 1597.5 will not have a significant statewide adverse economic impact directly affecting business including the ability of California businesses to compete with businesses in other states. The following studies/relevant data were relied upon in making the above determination: none. Cost impact on representative private persons or businesses: The Board is not aware of any cost impacts that a representative private person or business would necessarily incur in reasonable compliance with the proposed action.

Significant effect on housing costs: none. RESULT OF ECONOMIC IMPACT ANALYSIS The adoption of the proposed amendment to Rule 1581.1 and Rule 1597.5 will not (1) create or eliminate jobs within California; (2) create new businesses or eliminate existing businesses within California; or (3) affect the expansion of businesses currently doing busi- ness within California. The proposed amendments pro- mote the improvement of horse inventory reporting and horse identification.

The proposed regulations will ben- efit racing associations and fairs by enhancing their ability to meet their inventory reporting obligations un- der CHRB regulations. The proposed regulations will also give racing secretaries a tool to assist them in deter- mining which races to hold on which days. By knowing exactly which horses are on the grounds, racing secre- taries will be able to gauge which types of races will re- ceive adequate entries based on the population of horses meeting the requisite criteria (i.e. race conditions).

Greater inventory control will benefit the public, as rac- ing secretaries will be able to provide quality race pro- grams, which could result in an increase in wagering and a positive economic impact on the industry. The regulations will not affect worker safety or the state’s environment. Effect on small businesses: none. The proposed amendment to Rule 1581.1 and Rule 1597.5 will not af- fect small businesses because horse racing is not a small business under Government Code

section 11342.610. CONSIDERATION OF ALTERNATIVES In accordance with Government Code

Section 11346.5, subdivision (a)(13), the Board must determine that no reasonable alternative considered by the Board, or that has otherwise been identified and brought to the attention of the Board, would be more effective in car- rying out the purpose for which the action is proposed, or would be as effective and less burdensome on affect- ed private persons than the proposed action, or would be more cost−effective to affected private persons and equally effective in implementing the statutory policy or other provision of law.

The Board invites interested persons to present state- ments or arguments with respect to alternatives to the proposed regulation at the scheduled hearing or during the written comment period.

CONTACT PERSON Inquiries concerning the substance of the proposed action and requests for copies of the proposed text of the regulation, the initial statement of reasons, the modified text of the regulation, if any, and other information upon which the rulemaking is based should be directed to: Harold Coburn, Regulation Analyst California Horse Racing Board 1010 Hurley Way, Suite 300 Sacramento, CA 95825 Telephone: (916) 263−6026 E−mail: haroldc@chrb.ca.gov If the person named above is not available, interested parties may contact: Andrea Ogden, Policy, Regulations Manager Telephone: (916) 263−6033 A V AILABILITY OF INITIAL STATEMENT OF REASONS AND TEXT OF PROPOSED REGULATION The Board will have the entire rulemaking file avail- able for inspection and copying throughout the rule- making process at its offices at the above address.

As of the date this notice is published in the Notice Register, the rulemaking file consists of this notice, the proposed text of the regulation, and the initial statement of rea- sons. Copies may be obtained by contacting Harold Coburn, or the alternative contact person at the address, phone number or e−mail address listed above.

CALIFORNIA REGULATORY NOTICE REGISTER 2019, VOLUME NO. 17-Z 639 A V AILABILITY OF MODIFIED TEXT After holding a hearing and considering all timely and relevant comments received, the Board may adopt the proposed regulation substantially as described in this notice. If modifications are made which are suffi- ciently related to the originally proposed text, the modi- fied text, with changes clearly marked, shall be made available to the public for at least 15 days prior to the date on which the Board adopts the regulations.

Re- quests for copies of any modified regulation should be sent to the attention of Harold Coburn at the address stated above. The Board will accept written comments on the modified regulation for 15 days after the date on which it is made available. A V AILABILITY OF STATEMENT OF REASONS Requests for copies of the final statement of reasons, which will be made available after the Board has adopt- ed the proposed regulation in its current or modified form, should be sent to the attention of Harold Coburn at the address stated above.

BOARD WEB ACCESS The Board will have the entire rulemaking file avail- able for inspection throughout the rulemaking process at its website. The rulemaking file consists of the notice, the proposed text of the regulation and the initial state- ment of reasons. The Board’s website address is: www.chrb.ca.gov. TITLE 4. CALIFORNIA SCHOOL FINANCE AUTHORITY

Article 1.5, Sections 10170.2 through 10170.10 Title 4, Division 15 California Code of Regulations NOTICE IS HEREBY GIVEN that the California School Finance Authority (Authority), to organize and operate pursuant to Sections 17170 through 17199.6 of the Education Code, proposes to amend the regulations described below after considering all comments, objec- tions, and recommendations regarding the proposed ac- tion.

Any person interested may present written state- ments or arguments relevant to the proposed action to the attention of the Contact Person as listed in this No- tice no later than Monday, June 10, 2019. The Authority Board, upon its own motion or at the instance of any in- terested party, may thereafter adopt the proposal sub- stantially as described below or may modify such pro- posals if such modifications are sufficiently related to the original text.

With the exception of technical or grammatical changes, the full text of any modified pro- posal will be available for 15 days prior to its adoption from the person(

s) designated in this notice as contact person and will be mailed to those persons who submit statements related to this proposal or who have request- ed notification of any changes to the proposal. PROPOSED REGULATORY ACTION The Authority proposes to adopt Sections 10170.2 through 10170.10 of Title 4 of the California Code of Regulations (Regulations) as permanent regulations. The Regulations implement Authority’s responsibili- ties related to the Charter School Facility Grant Pro- gram (Program). AUTHORITY AND REFERENCE Authority:

Section 47614.5 of the Education Code.

Section 47614.5(

m) allows the Authority to adopt regu- lations in order to administer the Program. Reference:

Section 47614.5 of the Education Code,

Section 47600, et seq., of the Education Code,

Section 47605 of the Education Code, and

Section 47612.5 of the Education Code. The Regulations include a number of the requirements of the Program contained in

Section 47614.5. They also rely on specific provisions within the Charter Schools Act of 1992, commencing with

Section 47600 of the Education Code. INFORMATIVE DIGEST/POLICY STATEMENT OVERVIEW The Authority was created in 1985 to assist school districts and community college districts in financing school construction projects (Education Code

Section 17170, et seq.). The Authority is authorized to adopt by- laws for the regulation and conduct of its business, and is vested with all powers reasonably necessary to carry out its powers and responsibilities (Education Code Sections 17179 and 17180). Pursuant to Education Code,

Section 47614.5, the State Legislature directed the Authority to commence administration of the Program) with the 2013−14 fiscal year and to adopt regulations to implement the statute. Effective July 1, 2013, the Authority initiated its admin- istration of the Program, and pursuant to

Section 47614.5(m), a Certificate of Compliance was approved on August 6, 2014 by the Office of Administrative Law (OAL) (OAL Regulatory Action #2014−0625−01C). OAL approved a second permanent rulemaking ac- tion pursuant to Government Code,

Section 11346.1(

h) on May 3, 2016 (OAL Regulatory Action

CALIFORNIA REGULATORY NOTICE REGISTER 2019, VOLUME NO. 17-Z 640 #2016−0401−02SR). A Certificate of Compliance was approved on May 6, 2016 (OAL Regulatory Action #2016−0401−02SR). OAL approved a third permanent rulemaking action pursuant to Government Code,

Section 11346.1(

h) on August 24, 2017 (OAL Regulatory Action #2017−0719−02S). A Certificate of Compliance was approved on August 24, 2017 (OAL Regulatory Action #2017−0719−02S). OAL approved a fourth permanent rulemaking action pursuant to Government Code,

Section 11346.1(

h) on October 18, 2018 (OAL Regulatory Action #2018−0906−03C). A Certificate of Compliance was approved on October 18, 2018 (OAL Regulatory Ac- tion #2018−0906−03C). In order to establish permanent regulations for pur- poses of administration of the Program, the Authority is proposing permanent regulations through OAL’s per- manent rulemaking process and through submission of a Certificate of Compliance. The proposed regulations set forth Authority’s poli- cies and procedures for administering the Program, in- cluding:

definitions; minimum eligibility require- ments; eligible costs; application submission and con- tent requirements; basis for determining estimated an- nual entitlement calculation; basis for final fiscal−year entitlement calculation; procedures for apportionment of grant funds and appeals; and policies governing Grantee obligations, responsibilities and approval of grant use change.

In order to be eligible for Program grant funds, Appli- cants are required to meet minimum eligibility require- ments, which include, but are not limited to, the follow- ing: (1) applications are submitted by or on behalf of a Charter School; (2) a current charter has been awarded and is in place at the time of the application submission, or in the case of a first year charter, there is evidence that a charter petition has been submitted for approval to the Chartering Authority; and (3) either fifty−five percent (55%) or more of the student enrollment at the Charter School site must be eligible for free or reduced−price meals (FRPM) or the Charter School site for which grant funds are requested must be physically located in the local attendance area of a public elementary school that has fifty−five percent (55%) or more of its students eligible for FRPM.

Pursuant to Education Code,

Section 47614.5(f), the Program provides assistance to Charter Schools with the following types of costs: costs associated with facil- ities consistent with the

definitions used in the Califor- nia School Accounting Manual or regulations adopted by Authority and costs associated with common area maintenance. For a description of further benefits, please see part “d” under the “Results of Economic Im- pact Assessment.” After conducting an evaluation of any related regula- tions on this matter, the Authority has concluded that these are the only regulations dealing with the Program, and therefore, these proposed regulations do not present any inconsistencies or incompatibilities with existing state regulations. The Regulations are briefly summarized below.

Section 10170.2 — “Definitions”: • Addition of the words “in the Fiscal Year”, “The Appraiser must be”, “and shall” and removed the words “who” and “that”.

Section 10170.3 — “Eligible Applicant”: • Addition of language prohibiting Charter Schools, Charter Management Organizations, Education Management Organizations, or any operator of a Charter School from being a for−profit organization.

Section 10170.4 — “Eligible Costs”: • Removal of the language “The Authority shall base the annual COLA Index adjustment on the end of the prior year’s monthly rent” • Addition of the language “The Authority will use the Independent Appraisal on file if the following conditions are met” • Addition of the language “An Independent Appraisal completed within the last three fiscal years is on file with the Authority; and” • Addition of the language “Rent or lease costs do not exceed prior year’s reimbursable costs, subject to an adjustment of the annual COLA Index (COLA Cap)” • Reposition of existing paragraph (

i) into the (ii) position. • Addition of the language “Options to renew contained in existing rent or lease agreements on file with the Authority executed by the Charter School and the lessor will not be considered New Facility Agreements” • Addition of the language “Rent or lease costs are reimbursable from time of occupancy. The Authority reserves the right to request a Certificate of Occupancy or other such evidence needed to establish the date the applicant began to occupy the site.”

Section 10170.5 — “Application Submission”: • Removal of the language “Applications received after the final filing date will not be accepted for review.” • Added the language “Initial” and “period” • Added the language “The Second Application period for each grant year shall be made available by the Authority on September 10 of the Fiscal

CALIFORNIA REGULATORY NOTICE REGISTER 2019, VOLUME NO. 17-Z 641 Year. The Application deadline shall be 5:00 p.m. on October 15 of the Fiscal year. The Authority shall make application materials available on the Authority’s website and notify the public of the application release date. Under the following circumstances, an Application may be submitted during the second Application period: (

A) A Charter School relocates from a facility that was ineligible for a grant award to a facility that is eligible and the Application includes a description of the change in facility circumstances; or (

B) A First Year Charter School.” • Added the language “Late Applications and late Facility Invoice Expenditure Report are ineligible for Program funds and are not eligible for the appeal process described is

section 10170.10.” • Replace

section (

c) with subsection (2) • Reposition of existing sections (

d) and (

e) into the (

b) and (

c) position. • Removal of the words “The Authority may waive procedural defects in the submission of an Application, such as an Application filed past the deadline”

Section 10170.6 — “Content of the Application”: • Addition of the language “Requested documentation needed to complete the applicant’s eligibility review or award calculation shall be due to the Authority within 60 days of notice. Failure to submit this documentation by the stated deadline will result in ineligibility of the Program or applicable facility costs described in

section 10170.4 (a)(1) and (a)(2)”

Section 10170.7 — “Estimated Annual Entitlement Calculation”: • Replaces existing text (

c) with (a)(2) reference

Section 10170.9 — “Apportionment of Grant Funds”: • Replaces existing text (

c) with (a)(2) reference OTHER MATTERS PRESCRIBED BY STATUTES APPLICABLE TO THE SPECIFIC STATE AGENCY OR TO ANY SPECIFIC REGULATION OR CLASS OF REGULATIONS No other matters prescribed by statute are applicable to the Authority or to any specific Regulation or class of Regulations pursuant to

Section 11346.5(a) (4) of the California Government Code pertaining to the pro- posed Regulations or the Authority. MANDATE ON LOCAL AGENCIES OR SCHOOL DISTRICTS The Authority has determined that the Regulations do not impose a mandate on local agencies or school districts. FISCAL IMPACT The Authority has determined that the Regulations do not impose any additional cost or savings to any state agency, any costs to any local agency or school district requiring reimbursement under

Part 7 (commencing with

Section 17500) of Division 4 of Title 2 of the Gov- ernment Code, any other non−discretionary cost or sav- ings to any local agency, or any cost or savings in feder- al funding to the State. On an annual basis, the State Legislature will issue appropriations for purposes of the Program grant funds based on availability of funding and demand for the Program. For the current 2017−18 fiscal year, the State Legislature appropriated approximately $112 million towards Program grant funds.

The appropriation caused the Authority to apply the pro−rata share methodology since the ADA cost increased to $1,117 for all eligible schools. There will be no cost or savings to any State Agency pursuant to Government Code Sections 11346.1(

b) or 11346.5(a)(6). INITIAL DETERMINATION REGARDING ANY SIGNIFICANT, STATEWIDE ADVERSE ECONOMIC IMPACT DIRECTLY AFFECTING BUSINESS The Authority has made an initial determination that the Regulations will not have any significant, statewide adverse economic impact directly affecting businesses, including the ability of California businesses to com- pete with businesses in other states. EFFECT ON SMALL BUSINESSES The Authority has determined that the adoption of the Regulations will not affect small business.

The Pro- gram is a voluntary grant program available to Charter Schools to assist in the costs of Charter School facilities. COST IMPACTS The Authority is not aware of any cost impacts that a representative private person or business would neces- sarily incur in reasonable compliance with the proposed action.

CALIFORNIA REGULATORY NOTICE REGISTER 2019, VOLUME NO. 17-Z 642 ASSESSMENT OF EFFECT ON JOBS AND BUSINESS EXPANSION, ELIMINATION OR CREATION Adoption of these regulations will not: (1) create or eliminate jobs within California; (2) create new busi- nesses or eliminate existing businesses within Califor- nia; or (3) affect the expansion of businesses currently doing business within California. COST IMPACT ON HOUSING The Regulations will not have any effect on housing costs.

RESULTS OF ECONOMIC IMPACT ASSESSMENT The proposed regulations will unlikely have an im- pact on the creation or elimination of jobs within the State of California. In addition, the Authority is un- aware of any reason providing Grant funds to awardees would result in the elimination of jobs. The purpose of the proposed regulations is to set forth administrative criteria and requirements for administering a Grant pro- gram that will disburse funds to existing Charter Schools in need across the State of California for per pupil facilities funding.

There are no provisions within the proposed regulations which place additional bur- dens, obligations, or expenses on existing businesses such that jobs would be created or eliminated as a result. The proposed regulations will unlikely have an im- pact on the creation or elimination of new businesses within the State of California. As noted above, the pur- pose of the proposed regulations is to set forth adminis- trative criteria and requirements for administering a Grant program that provides per pupil facilities funding to existing Charter Schools in need.

There are no provi- sions within the proposed regulations, which place ad- ditional burdens, obligations, or expenses on existing businesses such that businesses would be created or eliminated as a result of the proposed regulations. The proposed regulations will unlikely have an im- pact on the expansion of businesses currently doing business within the State of California. The purpose of the proposed regulations is to set forth uniform and con- sistent criteria to administer a Grant program that will provide per pupil facilities funding to existing Charter Schools.

The proposed regulations are intended to provide per pupil facilities funding to existing Charter Schools in need, especially serving communities with low− income households. As such, to the extent that the awards benefit the long−term viability of Charter Schools, the Program and its proposed regulations have the potential to directly benefit economically vulnera- ble populations and communities throughout the State. REASONABLE ALTERNATIVES In accordance with Government Code

Section 11346.5(a)(13), the Authority must determine that no reasonable alternative to the Regulations considered by the Authority or that has otherwise been identified and brought to the attention of the Authority, would be more effective in carrying out the purpose for which the Reg- ulations are proposed or would be as effective and less burdensome to affected private persons than the Regu- lations, or would be more cost−effective to affected pri- vate persons and equally effective in implementing the statutory policy or other provision of law.

The Authori- ty invites interested persons to present statements with respect to alternatives to the Regulations during the written comment period. AGENCY CONTACT PERSON(

S) Written comments, inquiries, and any questions re- garding the substance of the Regulations shall be sub- mitted or directed to: Katrina Johantgen, Executive Director California School Finance Authority at: 300 S. Spring Street, Suite 8500 Los Angeles, CA 90013 (213) 620−4608 or 915 Capitol Mall, Room 101 Sacramento, CA 95814 (916) 651−7710 or kjohantgen@treasurer.ca.gov or csfa@treasurer.ca.gov The following person is designated as a backup Con- tact Person for inquiries only regarding the Regulations: Ravinder Kapoor, Senior Attorney 915 Capitol Mall, Room 110 Sacramento, CA 95814 (916) 653−2995

CALIFORNIA REGULATORY NOTICE REGISTER 2019, VOLUME NO. 17-Z 643 WRITTEN COMMENT PERIOD Any interested person, or his or her authorized repre- sentative, may submit written comments relevant to the Regulations to the Authority. The written comment pe- riod on the Regulations will end on Monday, June 10, 2019. All comments to be considered by the Authority must be submitted in writing to the Agency Contact Per- son identified in this Notice by that time.

In the event that changes are made to the Regulations during the written comment period, the Authority will also accept additional written comments limited to any changed or modified Regulations for 15 calendar days after the date on which such Regulations, as changed or modified are made available to the public pursuant to Title 1,

Chapter 1,

Section 44 of the California Code of Regulations. Such additional written comments should be addressed to the Agency Contact Person identified in this Notice. A V AILABILITY OF INITIAL STATEMENT OF REASONS, RULEMAKING FILE AND EXPRESS TERMS OF PROPOSED REGULATIONS The Authority has established a rulemaking file for this regulatory action, which contains those items re- quired by law. The file is available for inspection at the Authority’s office at 915 Capitol Mall, Suite 101, Sacramento, California, during normal business hours.

As of the date this Notice is published in the Notice Reg- ister, the rulemaking file consists of this Notice, the Ini- tial Statement of Reasons, and the proposed text of the Regulations. Copies of these items are available upon request, from the Agency Contact Person designated in this Notice. The Sacramento address will also be the lo- cation for inspection of the rulemaking file and any oth- er public records, including reports, documentation and other materials related to this proposed regulatory ac- tion.

In addition, the rulemaking file, including the Ini- tial Statement of Reasons and the proposed text, may be viewed on the Authority’s Web site at www.treasurer. ca.gov/csfa. PUBLIC HEARING No public hearing regarding the Regulations has been scheduled. Anyone wishing a public hearing must sub- mit a request in writing, pursuant to

Section 11346.8 of the Government Code, to the Authority at least 15 days before the end of the written comment period. Such re- quest should be addressed to the Agency Contact Per- son identified in this Notice and should specify the Reg- ulations for which the hearing is being requested. 15−DAY AVAILABILITY OF CHANGED OR MODIFIED TEXT After the written comment period ends and following a public hearing, if any is requested, the Authority may adopt the Regulations substantially as described in this Notice, without further notice.

If the Authority makes modifications that are sufficiently related to the origi- nally proposed text, it will make the modified text (with the changes clearly indicated) available to the public (including through the Authority’s Web site described above) for at least fifteen (15) calendar days before the Authority adopts the proposed Regulations, as modi- fied. Inquiries about and requests for written copies of any changed or modified regulations should be ad- dressed to the Agency Contact Person identified in this Notice.

A V AILABILITY OF FINAL STATEMENT OF REASONS The Authority is required to prepare a Final State- ment of Reasons pursuant to Government Code

Section 11346.9. Once the Authority has prepared a Final State- ment of Reasons, a copy will be made available to any- one who requests a copy and will be available on the Authority’s Web site described above. Written requests for copies should be addressed to the Agency Contact Person identified in this Notice. TITLE 10. BUREAU OF REAL ESTATE APPRAISERS NOTICE IS HEREBY GIVEN that the Bureau of Re- al Estate Appraisers (“Bureau”) is proposing to take the action described in the informative digest below.

Any interested person may present statements or arguments relevant to the action proposed, orally or in writing, at a hearing to be held at: Department of Consumer Affairs 1747 North Market Blvd. 1st Floor Hearing Room 186 Sacramento, CA 95834 Date: June 14, 2019 Time: 1:00 p.m. Written comments including those sent by mail, fac- simile, or email to the address listed under “Contact Person” in this Notice, must be received by the Bureau at its office not later than 5:00 p.m. on June 13, 2019 or must be received by the Bureau at the hearing.

The Bureau, upon its own motion or at the instance of any interested party, may thereafter adopt the proposals substantially as described below or may modify such

CALIFORNIA REGULATORY NOTICE REGISTER 2019, VOLUME NO. 17-Z 644 • • • proposals if such modifications are sufficiently related to the original text. With the exception of technical or grammatical changes, the full text of any modified pro- posal will be available for 15 days prior to its adoption from the person designated in this Notice as contact per- son and will be mailed to those persons who submit written or oral testimony related to this proposal or who have requested notification of any changes to the proposal.

Authority and Reference: Pursuant to the authority vested by Sections 11313, 11343, 11350, 11352, 11400, 11401, 11404, 11405, 11406, 11406.5, 11408, and 11422, Business and Professions Code, and

Section 17520 of the Family Code, and to implement, interpret and make specific Sections 11350, 11401, 11404, 11406, and 11406.5 of the Business and Professions Code, the Bureau is considering revising

Section 3582 of Title 10 of the California Code of Regulations as de- scribed in this Notice. INFORMATIVE DIGEST/POLICY STATEMENT OVERVIEW In 1996, California Code of Regulations

section (CCR) 3582 became effective and established most of the Bureau’s fees.1 In 2000, the Bureau amended CCR 3582 to update the application and issuance fees. In Fis- cal Year 2006−07, the licensed appraiser population peaked at 20,080 licensed appraisers. Due to the num- ber of appraisers licensed, the Bureau’s beginning fund balance peaked in 2008−09 to approximately $18.7 mil- lion. Over a span of several years, surplus funds were borrowed by the general fund beginning in 2003 and re- turned to the Bureau through payments plus interest. In 2006, the Bureau temporarily reduced issuance fees with CCR 3583.

Surplus funds were not sufficient- ly reduced when CCR 3583 expired in 2014, so the Bu- reau continued with the reduction until July 1, 2018, to effectively eliminate the surplus. Now, the number of li- censed appraisers is about half of what it was at the peak. As a result, revenue from license fees has de- creased by about half. Repayments from the general fund will also cease after this fiscal year. The Bureau implemented cost−saving measures, but will need to in- crease fees to ensure the Bureau can continue to meet its statutory obligation of public protection.

The Bureau is a self−funded program seeking to maintain a reserve of six months to manage through the fluctuations of the li- censee and registrant population. The following describes the increases in costs and other events that have led to the Bureau’s need to in- crease fees. Personnel Costs Personnel Costs (salary and benefits) have increased by approximately 64 percent since 2000−01 as depicted in the table below. This increase is not unique to the Bu- reau as personnel costs are rising for all state agencies.

Year2 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 Salaries $1,771 $1,331 $1,164 $1,229 $1,268 $1,317 $1,447 $1,631 Benefits $323 $291 $315 $387 $425 $429 $470 $466 Year 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 Salaries $1,581 $1,634 $1,705 $1,969 $1,933 $2,101 $2,304 $2,361 $2,319 Benefits $495 $552 $608 $719 $719 $908 $1,057 $1,132 $1,114 During the above timeframe, there were minor fluc- tuations to the number of the Bureau’s budgeted posi- tions, but individual personnel costs have increased considerably.

Personnel costs are approximately 60 percent of the Bureau’s budget, so as the Bureau down- sizes staff, it will be helpful in reducing costs. 3 None- theless, the fees need to be raised to ensure the Bureau is sufficiently funded to conduct its core licensing and en- forcement functions. Departmental Services Cost In 2011−2012, the Bureau (then the office of Real Es- tate Appraisers4) was paying the Department of Real Estate (DRE) $120,000 for administrative services pro- vided by the DRE.

The next year the Bureau was reorga- nized under the Department of Consumer Affairs (DCA), and the costs for administrative services have increased. In budget year 2017−18, the Bureau paid $584,000 to DCA for administratrive services. Bureau Surplus and Loan Repayment with Interest 1 Business and Professions Code

section 11313 allows the Bureau to adopt regulations as determined reasonably necessary to carry out the purpose of the Real Estate Appraisers’ Licensing and Cer- tification Law. 2 Number in thousands 3 See page 645 for more information on the Bureau downsizing staff 4 The Bureau of Real Estate Appraisers was the Office of Real Es- tate Appraisers until the Governor’s reorganization plan two be- came effective in 2012.

CALIFORNIA REGULATORY NOTICE REGISTER 2019, VOLUME NO. 17-Z 645 • • • • • The State of California (State) general fund borrowed $1 million in 2003−04, $2 million in 2004−5, and $16.6 million in 2008−09 of Bureau surplus funds. In fiscal year 2009−10, the State began repaying the Bureau. This allowed the Bureau to receive loan proceeds with interest at the pooled money investment rate to offset the revenue decline caused by the appraiser population decrease. The Bureau would have increased fees years ago if it did not have the surplus fund to cover the opera- tional costs.

License Population Decline In 2006−07 the license population peaked at 20,080.5 After the housing crash in 2009, many appraisers did not renew their licenses as the demand for appraisals dropped. This resulted in the Bureau losing about half of its licensee population from its peak. This caused the Bureau’s revenue to drop and would have resulted in immediate fee increases if the Bureau was not receiving loan repayment plus interest (the Bureau’s surplus funds) from the State.

Temporary Reduction Extension In 2006, amidst a booming licensee population and thus booming budget, the Bureau temporarily reduced its issuance fee for trainees and residential appraisers to $150 (from $300) and certified appraisers to $200 (from $375) until 2014. In 2014, the Bureau was still receiv- ing loan repayments from the state and extended the temporary reduction until 2018−19 when the Bureau would need additional revenue. This resulted in four more years of subsidized lowered fees.

Informal Technology (IT) Upgrades Beginning in 2008, the Bureau (then Office) em- barked on an IT system modernization effort to replace aging technology. The Bureau hired a contractor to build the infrastructure to conduct online functions at a cost of approximately $2.47 million. After the system was constructed, the Bureau hired IT personnel to run the system. This resulted in increased security and im- proved user services such as online license renewal. Having to hire two IT programming staff increased the Bureau’s operating costs by approximately $300,000 annually.

Cost Saving Plan To delay a fee increase as long as possible and miti- gate how much of an increase is required, the Bureau has engaged in a cost saving plan. In 2017−18, the Bu- reau did not fill 2.0 high salaried vacant positions and instead reclassified the positions for a savings of ap- proximately $316,000 annually. In 2019/20, the Bureau plans to not fill 4.0 positions, resulting in approximately $527,000 of projected future savings annually. The Bu- reau has determined it can adequately perform all func- tions without these positions.

In November 2018 the Bureau is moving to a new of- fice space to save $41,000 on rent per year. The Bureau also froze non−mission critical employee travel. The Bureau has maintained operating expenses (sup- plies, etc.) at or below inflation levels for years. As the table below reflects, the consistent level in the Bureau’s Operating Expenses & Equipment (OE&

E) costs are due to the Bureau proactively searching for less expen- sive services and negotiating good rates. Year 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 OE&E $1,655 $1,075 $1,125 $1,609 $1,464 $929 $1,026 $1,220 $1,443 Year 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 OE&E $1,590 $1,276 $1,452 $1,845 $1,979 $2,010 $2,105 $1,808 $1,715 The Bureau is executing a cost saving plan and must now look to fee increases to balance the Bureau’s budget. Fee Increase is Needed The Bureau will no longer receive state loan repay- ments and thus must balance its budget without the loan proceeds.

The Bureau is projected to have a 8.8 month reserve at the end of 2018−19, but the Bureau is project- ed to have 3.6 months in reserve 2019−20 without a fee increase. This means the Bureau will have to increase fees in order to stay solvent beyond 2019−20. The Bu- reau’s anticipated expenses in 2019−20 are $5.7 million and the anticipated revenue in 2019−20 are $3.5 mil- lion. To achieve a structurally balanced fund, fees will be increased. See page 647 or the proposed regulation for the amount of fee increase. 5 Current population le

Document details

CollectionCalifornia Z Register
CitationCal. Reg. Notice Reg. 2019, No. 17
Typegazette
Languageen
Formatpdf
SourceCA_ZREG
Identifier07f889c7eb6e267c040a48a996cf842f5a234e36

Source file is stored in the law ingest library (pdf).

California Regulatory Notice Register — Register 2019, No. 17-Z (April 26, 2019)

Cal. Reg. Notice Reg. 2019, No. 17

California Z Register

Loading PDF viewer…