REGISTER Time- Dated Material EDMUND G. BROWN, JR., GOVERNOR OFFICE OF ADMINISTRATIVE LAW 2019, NO. 10−Z PUBLISHED WEEKLY BY THE OFFICE OF ADMINISTRATIVE LAW MARCH 8, 2019 PROPOSED ACTION ON REGULATIONS TITLE 2. FAIR POLITICAL PRACTICES COMMISSION Conflict−of−Interest Code — Notice File No. Z2019−0226−03 .......................................... 353 Amendment Multi−County: Inland Empire Health Plan Joint Powers Agency River Delta Unified School District State Agency: Department of Real Estate TITLE 2.

FAIR POLITICAL PRACTICES COMMISSION Gifts: Agency Provided Tickets or Passes, Valuation of Gifts, Exemptions to Gift Limits and Exceptions to Gift Limits — Notice File No. Z2019−0226−11 ........................................... 354 TITLE 4. CALIFORNIA HEALTH FACILITIES FINANCING AUTHORITY Community Services Infrastructure Grant Program — Notice File No. Z2019−0226−02 ...................... 355 TITLE 5. CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM Format for Employer Reports — Notice File No. Z2019−0226−12 ....................................... 360 TITLE 8.

LABOR COMMISSIONER’S OFFICE Enforcement of Client Employer Liability — Notice File No. Z2019−0225−02 .............................. 364 TITLE 10. DEPARTMENT OF INSURANCE California Automobile Assigned Risk Plan (CAARP) Plan of Operations — Notice File No. Z2019−0226−05 .................................................................. 369 TITLE 10. DEPARTMENT OF INSURANCE California Automobile Assigned Risk Plan (CAARP) Simplified Manual of Rules and Rates — Notice File No. Z2019−0226−04 .................................................. 372 TITLE 10.

DEPARTMENT OF INSURANCE Low Cost Auto Plan of Operations — Notice File No. Z2019−0226−06 ................................... 374 (Continued on next page)

(Continued on next page) TITLE 13. AIR RESOURCES BOARD Amendments to the Off−Highway Recreational Vehicles (OHRV) Red Sticker Program — Notice File No. Z2019−0219−05 ........................................................ 377 TITLE 14. BOARD OF FORESTRY AND FIRE PROTECTION Registered Professional Forester (RPF) and Certified Specialty Amendments, 2019 — Notice File No. Z2019−0226−01 .................................................................. 384 TITLE 16. VETERINARY MEDICAL BOARD Consumer Protection Enforcement Initiative (CPEI) — Notice File No. Z2019−0222−01 ..................... 388 TITLE 17.

AIR RESOURCES BOARD Cargo Tank Vapor Recovery Program — Notice File No. Z2019−0219−06 ................................. 391 TITLE 27. OFFICE OF ENVIRONMENTAL HEALTH HAZARD ASSESSMENT Proposition 65

Article 6 Rental Vehicle Exposure Warnings — Notice File No.

Z2019−0226−10 ................ 396 GENERAL PUBLIC INTEREST DEPARTMENT OF FISH AND WILDLIFE California Endangered Species Act (CESA) Consistency Determination Request for Dominie Creek Fish Passage Project, 2080−2019−004−01, Del Norte County .............................. 399 OFFICE OF ENVIRONMENTAL HEALTH HAZARD ASSESSMENT Hot Spots Cobalt Cancer Inhalation Unit Risk Factors (IURs) .......................................... 399 PROPOSITION 65 OFFICE OF ENVIRONMENTAL HEALTH HAZARD ASSESSEMENT Acceptance of a Request for a Safe Use Determination for Exposures to Crystalline Silica in Woodwise Products, and Opportunity for Public Comment ...................................... 400 OFFICE OF ENVIRONMENTAL HEALTH HAZARD ASSESSEMENT Acceptance of a Safe Use Determination for Exposures to Bisphenol A in Certain Eyewear Products Manufactured, Distributed or Sold by the Vision Council Member Companies, and Opportunity for Public Comment .................................................... 401 OFFICE OF ENVIRONMENTAL HEALTH HAZARD ASSESSEMENT Chemical Listed Effective March 8, 2019 as Known to the State of California to Cause Reproductive Toxicity: Bevacizumab ......................................................... 402 OFFICE OF ENVIRONMENTAL HEALTH HAZARD ASSESSEMENT Proposition 65 Chemical Listing .................................................................. 403

DISAPPROV AL DECISION DEPARTMENT OF SOCIAL SERVCIES Home Care Services Consumer Protection Act ....................................................... 423 A V AILABILITY OF INDEX OF PRECEDENTIAL DECISIONS DEPARTMENT OF SOCIAL SERVICES Availability of Index of Precedential Decisions ....................................................... 424

SUMMARY OF REGULATORY ACTIONS Regulations filed with the Secretary of State ......................................................... 424 Sections Filed, September 26, 2018 to February 27, 2019 .............................................. 428 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 (USPS 002−931), (ISSN 1041-2654) 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) 888-3600. “Periodicals Postage Paid in Saint Paul, MN.” POSTMASTER: Send address changes to the: CALIFORNIA REGULA TORY NOTICE REGISTER, Barclays, a subsidiary of West, a Thomson Reuters Business, P .O. Box 2006, San Francisco, CA 94126. The Register can also be accessed at http://www.oal.ca.gov .

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CALIFORNIA REGULATORY NOTICE REGISTER 2019, VOLUME NO. 10-Z 353 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: Inland Empire Health Plan Joint Powers Agency River Delta Unified School District STATE AGENCY: Department of Real Estate A written comment period has been established com- mencing on March 8, 2019, and closing on April 22, 2019.

Written comments should be directed to the Fair Political Practices Commission, Attention Brianne Kil- bane, 1102 Q Street, Suite 3000, Sacramento, Califor- nia 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 April 22, 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 Brianne Kilbane, 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-

CALIFORNIA REGULATORY NOTICE REGISTER 2019, VOLUME NO. 10-Z 354 spective agency. Requests for copies from the Commis- sion should be made to Brianne Kilbane, Fair Political Practices Commission, 1102 Q Street, Suite 3000, Sacramento, California 95811, telephone (916) 322−5660. TITLE 2. FAIR POLITICAL PRACTICES COMMISSION NOTICE IS HEREBY GIVEN that the Fair Political Practices Commission (the Commission), under the au- thority vested in it by the Political Reform Act (the Act) 1 by

Section 83112 of the Government Code pro- poses to adopt, amend, or repeal regulations in Title 2, Division 6 of the California Code of Regulations. The Commission will consider the proposed regulation at a public hearing on or after April 11, 2019 at the offices of the Fair Political Practices Commission, 1102 Q Street, Suite 3000, Sacramento, California 95811, com- mencing at approximately 10:00 a.m. Written com- ments should be received at the Commission offices no later than 5:00 p.m. on April 9, 2019.

BACKGROUND/OVERVIEW In an effort to reduce improper influences on public officials, the Political Reform Act regulates the receipt of gifts by public officials. The term “gift” is defined in

Section 82028(

a) as: “Any payment that confers a personal benefit on the recipient, to the extent that consideration of equal or greater value is not received and includes a rebate or discount in the price of anything of value unless the rebate or discount is made in the regular course of business to members of the public without regard to official status.” Regulation 18944.1 provides two alternative meth- ods by which an official may accept the types of tickets addressed herein: (1) the agency may treat the ticket as part of the official’s governmental salary, provided it is treated as such under applicable tax laws; or (2) the offi- cial may accept the ticket if there is a public purpose achieved through that official’s use of the ticket.

Regulation 18944.1 sets up a procedure for agencies that provide tickets to their officials that, if utilized, will establish for gift purposes that the official receiving the ticket has met the burden under

Section 82028 that equal or greater value has been provided in exchange therefor. Accordingly, under this procedure, no gift will have been received by the official. An agency is free to make its own choice whether or not to adopt a policy conforming to the regulation or to treat the tickets as in- come or gifts to the official and not apply the regulation. Tickets distributed under the policy, including tickets distributed at the behest of a public official, must be identified on a Form 802 and posted on the agency’s website to comply with this regulation.

The form must be completed within 45 days of distribution of a ticket or pass. Where the distribution is made pursuant to the public purpose exception, that purpose must also be de- scribed on the form.

To help clarify Regulation 18944.1, staff proposes in- cluding language specifying that an agency’s ticket dis- tribution policy must include a provision prohibiting the disproportionate use of tickets or passes by a mem- ber of the governing body, chief administrative officer of the agency, political appointee, or department head; as well as making clear that where the public purpose cited for the use of tickets involves the oversight or in- spection of facilities, the official must document the public purpose by submitting a written inspection re- port of findings and recommendations to be provided to the official’s agency.

Staff also proposes further clarifying the definition of “face value” to “fair value” contained in Regulation 18946, changing a refence from “face value” to “fair value” in Regulation 18946.1, and updating a cross− refence to Regulation 18944.1 contained in Regulation 18942. REGULATORY ACTION Adopt 2 Cal. Code Regs.

Section 18944.1 by adding language requiring an agency’s ticket distribution poli- cy to include a provision prohibiting the disproportion- ate use of tickets or passes by the members of the agen- cy’s governing board or chief administrative officer, as well requiring a written inspection report that includes findings and recommendations where the public pur- pose cited for the use of tickets involves the oversight or inspection of facilities. The amendments also include the removal of some redundant language from the defi- nition of “ticket.” Amend 2 Cal. Code Regs.

Section 18946 by changing the term “face value” to “fair value” and adding lan- guage clarifying the definition of “fair value” as it per- tains to the valuation of tickets in a luxury box or suite. Amend 2 Cal. Code Regs.

Section 18946.1 by chang- ing the term “face value” to “fair value.” Amend 2 Cal. Code Regs.

Section 18942 by changing a cross−reference from Regulation 18944.1, subdivi- sion (

f) to subdivision (d). 1 The Political Reform Act is contained in Government Code sec- tions 81000 through 91014. All further statutory references are to the Government Code. The regulations of the Fair Political Prac- tices Commission are contained in sections 18110 through 18997 of Title 2 of the California Code of Regulations (hereafter Regulation).

CALIFORNIA REGULATORY NOTICE REGISTER 2019, VOLUME NO. 10-Z 355 SCOPE The Commission may adopt the language noticed herein, or it may choose new language to implement its decisions concerning the issues identified above or any related issues. The Commission must determine that no alternative considered by the agency would be more ef- fective in carrying out the purpose for which the action is proposed or would be as effective and less burden- some to affected private persons than the proposed action. FISCAL IMPACT STATEMENT Fiscal Impact on Local Government.

This regulation will have no fiscal impact on any local entity or pro- gram. Fiscal Impact on State Government. This regulation will have no fiscal impact on any state entity or pro- gram. Fiscal Impact on Federal Funding of State Programs. This regulation will have no fiscal impact on the federal funding of any state program or entity. The adoption of the proposed amendments: (1) will not impose a cost or savings on any state agency, local agency or school district that is required to be reim- bursed under

Part 7 (commencing with

Section 17500) of Division 4 of the Government Code; (2) will not re- sult in any nondiscretionary cost or savings to local agencies; (3) will not result in any cost or savings in fed- eral funding to the state; (4) will not impose a mandate on local agencies or school districts; and (5) will not have any potential cost impact on private persons or businesses including small businesses. AUTHORITY Government Code

Section 83112 provides that the Fair Political Practices Commission may adopt, amend, and rescind rules and regulations to carry out the pur- poses and provisions of the Political Reform Act. REFERENCE The purpose of this regulation is to implement, inter- pret, and make specific Government Code

Section 82028. CONTACT Any inquiries should be made to Zachary W. Norton, Fair Political Practices Commission, 1102 Q Street, Suite 3000, Sacramento, CA 95811; telephone (916) 322−5660 or 1−866−ASK−FPPC. Proposed regulatory language can be accessed at http://www.fppc.ca.gov/ the−law/fppc−regulations/proposed−regulations−and− notices.html. TITLE 4.

CALIFORNIA HEALTH FACILITIES FINANCING AUTHORITY NOTICE OF PROPOSED RULEMAKING The California Health Facilities Financing Authority (“Authority”) proposes to adopt the regulations de- scribed below after considering all comments, objec- tions and recommendations regarding the proposed action. PUBLIC HEARING The Authority has not scheduled a public hearing on this proposed action. However, the Authority 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 Authority. Comments may also be submitted by facsimile (FAX) at (916) 654−5362 or email at chffa@treasurer.ca.gov. The writ- ten comment period closes at 5:00 p.m. (Pacific Time) on April 22, 2019. The Authority will consider only comments received by the Authority office by that time.

Please submit comments to: Sondra Jacobs Program Manager California Health Facilities Financing Authority 915 Capitol Mall, Room 435 Sacramento, CA 95814 Following the written comment period, the Authority may thereafter adopt the proposed regulations substan- tially as described below or may modify the proposed regulations if the modifications are sufficiently related to the original text.

With the exception of nonsubstan- tive, technical, or grammatical changes, the full text of any modified proposed regulations will be available for 15 days prior to its adoption to all persons who submit written comments during the public comment period and all persons who request notification. Copies of the proposed regulations and the Initial Statement of Reasons are available from the office list- ed on the following page. This notice, the Initial State-

CALIFORNIA REGULATORY NOTICE REGISTER 2019, VOLUME NO. 10-Z 356 ment of Reasons, and the text of the proposed regula- tions are available on the Internet at https://www. treasurer.ca.gov/chffa/csi/csigp.asp. Welfare and Insti- tutions Code

Section 5848.51 charges the Authority with establishing a grant program to promote jail and prison diversion programs and services in local com- munities by increasing and expanding mental health treatment facilities, substance use disorder treatment facilities, and trauma−centered service facilities. The Community Services Infrastructure Grant Program reg- ulations and the enacting statute are available at https://www.treasurer.ca.gov/chffa/csi/csigp.asp.

This information also is available to the public, as is all infor- mation that the Authority considered as the basis for these proposed regulations, at the address listed below. Following its preparation, the Final Statement of Reasons will be available from the office listed below: California Health Facilities Financing Authority 915 Capitol Mall, Room 435 Sacramento, CA 95814 Telephone: (916) 653−2799 Facsimile: (916) 654−5362 Email: chffa@treasurer.ca.gov AUTHORITY AND REFERENCE CITATIONS The Authority adopts these regulations under the au- thority granted in

Section 5848.51, Welfare and Institu- tions Code, and cites the following reference:

Section 5848.51, W elfare and Institutions Code. INFORMATIVE DIGEST/POLICY STATEMENT OVERVIEW The Authority was established in 1979 and operates pursuant to the California Health Facilities Financing Authority Act in Government Code Sections 15430−15462.5. Senate Bill (“SB”) 843, (Chapter 33, Statutes of 2016,

Section 52), codified in Welfare and Institutions Code

Section 5848.51, charges the Authority with the responsibility of developing regulations to establish specific selection criteria for Grant awards, define eligi- ble costs, and determine minimum and maximum grant amounts for the purpose of expanding access to jail and prison diversion programs and services for those with mental health illness, substance use disorders, and trau- ma resulting from sex trafficking, domestic violence, and other violent crimes; creating or expanding mental health treatment, substance use disorder treatment, and trauma−centered service facilities in local communi- ties; and reducing the need of these treatments and ser- vices in jails and prisons.

To comply with the statutory mandate, these regula- tions provide the framework for eligible parties to apply for grant funds to expand jail and prison diversion pro- grams that provide mental health treatment, substance use disorder treatment, and trauma−centered services throughout California. The regulations include relevant

definitions; descriptions of eligible applicants and project costs; maximum grant amounts by county; the application process; the evaluation criteria the Authori- ty will use to make grant award determinations; the process by which allocations will be made; the terms and conditions grant recipients will need to agree to; and other provisions related to the administration of the Community Services Infrastructure Grant Program.

The Authority anticipates these proposed regulations will benefit Justice−Involved Individuals with mental health illness; with substance use disorders; and who are victims of trauma resulting from sex trafficking, do- mestic violence, and other violent crimes through the awarding of Grant funds for the specific purpose of di- verting Justice−Involved Individuals from jails and prisons. These proposed regulations are compatible and consistent with the intent of the Legislature in adopting Welfare and Institutions Code

Section 5848.51. Welfare and Institutions Code

Section 5848.51, sub- division (j), states the following: “The authority may adopt emergency regulations relating to the grants for the capital capacity and program expansion projects described in this section, including emergency regulations that define eligible costs and determine minimum and maximum grant amounts.” The regulations were submitted to the Office of Ad- ministrative Law (OAL) as emergency regulations.

The OAL approved the emergency regulatory action that became effective on November 26, 2018 and will expire on May 29, 2019, during which time the Authority must file the Certificate of Compliance. (The Certificate of Compliance is the process by which these regulations become permanent.) DOCUMENTS INCORPORATED BY REFERENCE Community Services Infrastructure Grant Program Application, Form No. CHFFA 9 CSI−01 (09/2018) Request for Disbursement Form No. CHFFA 9 CSI−02 (09/2018) Actual Expenditures Report Form No. CHFFA 9 CSI−03 (09/2018) Certificate of Completion & Final Report Form No. CHFFA 9 CSI−04 (09/2018)

CALIFORNIA REGULATORY NOTICE REGISTER 2019, VOLUME NO. 10-Z 357 DUPLICATION OF REGULATIONS The following is a list of the sections within the Com- munity Services Infrastructure Grant Program Applica- tion and Certificate of Completion & Final Report, where a

section of the Community Services Infrastruc- ture Grant Program regulations are duplicated. The Authority has included the regulatory language in the Application and the Certificate of Completion & Final Report for purposes of satisfying the requirement for clarity of regulations and forms incorporated by reference. Community Services Infrastructure Grant Program Application Form No. CHFFA 9 CSI−01 (09/2018): Evaluation Criteria — Pages 7−11 Paraphrased Regulations,

Section 7419 — Evaluation Criteria, subdivisions (a)(1) through (a)

(4) Certificate of Completion & Final Report Form No. CHFFA 9 CSI−04 (09/2018):

Part III: Program Outcome Crisis Residential Treatment, Crisis Stabilization and Mobile Crisis Support Team Program(s), items (

a) through (

e) Verbatim Regulations,

Section 7419 — Evaluation Criteria, subdivision (a)

(3) STATEMENT OF NECESSITY

Section 7413 —

Definitions This

section provides

definitions for terms: (

a) Where the definition may differ from that found in a dictionary. For example, “Authority” as defined with- in these regulations, refers specifically to the California Health Facilities Financing Authority. (

b) That are unique to the California Health Facilities Financing Authority and the process for awarding of Grant funds. For example, an “Initial Allocation” is the Grant amount that is recommended to the Authority for Final Allocation. “Final Allocation” is the Grant amount that is approved by the Authority.

Section 7414 — Eligibility This

section places into regulation, Welfare and Insti- tutions Code

Section 5848.51, subdivision (

d) that specifies the entities that are eligible to apply for a Grant, specifically to serve Justice−Involved Individu- als. This

section provides clarity to the users of the regulations.

Section 7415 — Eligible Project Costs This

section provides the users of the regulations in- formation as to the specific costs that are eligible for funding under this Grant Program. Additional stipula- tions on the use of the Grant funds are also provided, such as eligible costs include only those costs incurred during the Grant Period, Grant funds shall only be used for costs directly related to and essential for the comple- tion of the Project, etc.

Section 7416 — Grant Application This

section provides those entities that will be apply- ing for Grant funds important information regarding availability of the Application form, number of copies of Application to be submitted, etc.

Section 7417 — Funding Rounds and Application Deadlines This

section informs users of the regulations where information on the funding rounds is available, includ- ing the deadline dates for the first Funding Round and subsequent Funding Rounds (if needed).

Section 7418 — Maximum Grant Amounts This

section provides the amounts of Grant funds that are available for funding, based on county population. Provisions are made for Grant funds remaining after awarding of the Final Allocation in the first Funding Round.

Section 7419 — Evaluation Criteria This

section provides the users of the regulations with the specific criteria that will be evaluated and scored for entities requesting Grant funds.

Section 7420 — Initial Allocation Initial Allocation is a term defined in

Section 7413. The use of the term Initial Allocation is unique to the Grant process as used by the California Health Facili- ties Financing Authority. The Initial Allocation is the recommendation by the Authority Staff, to the Authori- ty, for a specific Application submitted for Grant funds. It is necessary for users of the regulations to understand that the Initial Allocation is a “recommendation” and does not guarantee that Grant funds will be awarded or that the amount of the Grant funds will be what was re- quested on the Application.

The Authority makes the fi- nal determinations based on staff recommendations. The process for arriving at the Initial Allocation is out- lined in this section.

Section 7421 — Appeals This

section provides an appeal process for those en- tities that submitted an Application, which the Authori- ty staff determined not to recommend a Grant, or an ap- peal of the amount of the Initial Allocation recommend- ed by the Authority staff. This

section provides infor-

CALIFORNIA REGULATORY NOTICE REGISTER 2019, VOLUME NO. 10-Z 358 mation on the timeline for appeals and information on the review process and decision of such appeals.

Section 7422 — Final Allocation This

section provides information that Final Alloca- tions will be determined by the Authority at a public meeting and Applicants approved for a Final Allocation will be sent a Grant Award Letter that provides specific information to the potential Grantee.

Section 7423 — Use of the Grant This

section informs users of the regulations of limi- tations on the use of Grant funds and that any change in the use of the Grant funds requires the approval of the Authority that the use of Grant funds is limited to that as described in the Grant Agreement and that the funds may supplement, but not supplant existing resources or financial commitments. (See

Section 7424)

Section 7424 — Grant Agreement This

section provides, in regulation, the terms and conditions of the Grant that will be specified in the Grant Agreement. Grant funds cannot be disbursed un- til the Grant Agreement is executed by the Authority and the Grantee.

Section 7425 — Release of Grant Funds This

section informs Grantees of the requirements and documentation that shall be completed before the Grant funds may be released. The documentation re- quired varies depending on what the Grant funds will be/were used for. For example, the documentation re- quired for a renovation project is different from the doc- umentation required for facility acquisition.

Section 7426 — Requirements for Renovation Projects on Leased Property This

section informs Grantees that Grant funds may be used for renovation of property on leased property. This

section is necessary as the Grant funds will be used for payment of the improvement of the leased property. It is the responsibility of the Authority, as a governmen- tal agency, to protect the use of Grant funds for the in- tended purpose. Specific requirements must be satisfied in order for Grant funds to be used on property leased to the Grantee.

Section 7427 — Recovery of Funds for Non−Performance and Unused Grant Funds; Remedies This

section specifies circumstances under which the Authority may require remedies that include the forfei- ture and return of the Grant funds. Provision is also made for the return to the Authority of any unused funds and any unused interest earnings.

Section 7428 — Reporting Requirements This

section informs Grantees of specific reports that shall be submitted to the Authority during the Grant pe- riod and beyond and the timeline for submission of these reports.

Section 7429 — Records Retention, Inspections and Audits This

section informs Grantees of the timeframe for records retention and also notifies Grantees that the Au- thority may perform site visits during the Grant Period and for three years after the certification of Project com- pletions have been submitted. AN EV ALUATION OF WHETHER OR NOT THE PROPOSED REGULATIONS ARE INCONSISTENT OR INCOMPATIBLE WITH EXISTING STATE REGULATIONS The Authority evaluated whether or not there were any other regulations concerning the awarding of grants to the California counties to implement Welfare and In- stitutions Code

Section 5848.51 and has found that these are the only regulations in this area. Therefore, the proposed regulations are neither inconsistent nor in- compatible with existing state regulations. DESCRIPTION OF THE BENEFITS OF THE PROPOSED ACTION, WHICH INCLUDES NONMONETARY BENEFITS SUCH AS PROTECTION OF THE PUBLIC HEALTH AND SAFETY , WORKER SAFETY , THE ENVIRONMENT, ETC. These regulations will directly benefit California counties that provide jail and prison diversion treatment and services to Justice−Involved Individuals with men- tal illness, substance use disorders, and/or who are vic- tims of trauma.

These regulations provide the mecha- nism to fund equipment and capital projects of the facil- ities that house these programs. The treatment and ser- vices provided could potentially reduce the number of individuals, in California jails and prisons, with mental health and substance use disorders, and improve public safety because these individuals are receiving the prop- er care.

CALIFORNIA REGULATORY NOTICE REGISTER 2019, VOLUME NO. 10-Z 359 COST ESTIMATE 1. Cost or Savings to State Agencies: No impact. 2. Cost to Local Agencies or School Districts Which Must Be Reimbursed in Accordance with Government Code Sections 17500−17630: None. 3. Nondiscretionary Costs or Savings to Local Agencies: No impact. 4. Federal Funding to State Agencies: No impact. LOCAL MANDATE STATEMENT These regulations do not impose a mandate upon lo- cal agencies or school districts. There are no “state− mandated local costs” in these regulations that require reimbursement under

Section 17500 et seq. of the Gov- ernment Code. FISCAL IMPACT These regulations do not impose any costs to any lo- cal agency or school district requiring reimbursement pursuant to

section 17500 et seq. of the Government Code, nor do these regulations identify any costs or sav- ings to any state agency, other nondiscretionary costs or savings to be imposed upon local agencies, or costs or savings in federal funding to the state. SIGNIFICANT STATEWIDE ADVERSE ECONOMIC IMPACT DIRECTLY AFFECTING BUSINESS, INCLUDING ABILITY TO COMPETE The California Health Facilities Financing Authority has not identified any significant statewide adverse eco- nomic impact directly affecting business, including the ability of California businesses to compete with busi- nesses in other states.

RESULTS OF THE ECONOMIC IMPACT ASSESSMENT The adoption of these regulations does not have an impact on the creation or elimination of jobs within the state. As a result of the adoption of these regulations, new businesses will not be created and current busi- nesses will not be eliminated within the state. The adop- tion of these regulations will not provide for the expan- sion of businesses currently doing business within the state. Additionally, neither benefits nor detriments are expected to worker safety or the state’s environment due to the adoption of these regulations.

These regulations will directly impact the health and welfare of California residents, specifically Justice− Involved Individuals, by promoting diversion pro- grams and mental health treatment, substance use disor- der treatment, and trauma−centered services by increas- ing and expanding mental health treatment facilities, substance use disorder facilities, and trauma−centered service facilities. COST IMPACTS ON REPRESENTATIVE PERSON OR BUSINESS The only entities that may apply for Grant funds un- der Welfare and Institutions Code

Section 5848.51 are counties and Counties Applying Jointly. Therefore, the California Health Facilities Financing Authority is not aware of any cost impacts that a representative private person or business would necessarily incur in reason- able compliance with the proposed action. BUSINESS REPORT The regulations do not require any report to be made by any business or other entity. SMALL BUSINESS The regulations will not affect small businesses as these regulations are specific to counties and Counties Applying Jointly.

CONSIDERATION OF ALTERNATIVES The Authority must determine that no reasonable al- ternative it considered or that has otherwise been identi- fied and brought to its attention would be more effective in carrying out the purpose for which the action is pro- posed, would be as effective and less burdensome to af- fected private persons than the proposed action, or would be more cost−effective to affected private per- sons and equally effective in implementing the statuto- ry policy or other provision of law.

In developing the regulatory action, the Authority it- self did not consider any alternatives because no rea- sonable alternatives have been presented to it. The Au- thority invites interested persons to submit comments and alternatives with respect to the proposed regula- tions during the public comment period. CHFFA REPRESENTATIVE REGARDING THE RULEMAKING PROCESS OF THE PROPOSED REGULATIONS Contact Person: Sondra Jacobs (916) 653−2799 Backup: Carolyn Aboubechara (916) 653−2799

CALIFORNIA REGULATORY NOTICE REGISTER 2019, VOLUME NO. 10-Z 360 TITLE 5. CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM California Code of Regulations Title 5. Education. Division 3. Teachers’ Retirement System

Chapter 1. Teachers’ Retirement System.

Article 15.5. Penalties and Interest for Late Remittances and Late and Unacceptable Reporting by Employers. Amendments to §§ 27000, 27001 and 27002 and

Chapter 3. Employer Reporting.

Article 1. Employer Direct Reporting. Amendments to §§ 27702 and 27703 and

Article 2. Format for Employer Reports. The California State Teachers’ Retirement System (“CalSTRS”) and the Teachers’ Retirement Board (“board”) propose to adopt amendments to regulations described here after considering all comments, objec- tions and recommendations regarding the proposed action. f PUBLIC HEARING The Teachers’ Retirement Board will hold a hearing: Date and Time 4:00 p.m. April 24, 2019 Please arrive promptly for check in before the scheduled start time. The hearing will be closed once each speaker has provided testimony.

Location California State Teachers’ Retirement System Boardroom 100 Waterfront Place West Sacramento, CA 95605 Purpose To receive written or oral comments about this action. Comments are limited to five minutes each and must not repeat comments already received in written or verbal form. Accessibility The hearing room is accessible to persons with mobility impairments, and it can be made accessible to persons with hearing or visual impairments upon advance request.

WRITTEN COMMENT PERIOD Any interested persons, or their authorized represen- tatives, may submit written comments relevant to the proposed regulatory action to CalSTRS. The written comment period closes on April 22, 2019. CalSTRS will only consider written comments received at Cal- STRS’ address as reflected below by that date. Submit comments to: Sal Sanchez Governmental Relations California State Teachers’ Retirement System P.O.

Box 15275, MS−14 Sacramento, CA 95851−0275 E−Mail: Regulations@CalSTRS.com AUTHORITY AND REFERENCE All Authority and Reference citations are to the Cali- ornia Education Code unless otherwise stated. The Teachers’ Retirement Board has exclusive au- thority to administer CalSTRS under

Article XVI, sec- tion 17 of the California Constitution.

Section 22207 authorizes the board to perform any acts necessary for the administration of CalSTRS and the plan in carrying into effect the provisions of the Teachers’ Retirement Law, California Education Code sections 22000 through

Section 22213 provides that the board shall regulate the duties of employers, employing agencies and other public authorities.

Section 22214 provides that the board may take any action it deems necessary to ensure the continued right of members or beneficiaries to receive monthly payments.

Section 22250 provides that the board and its officers and employees shall discharge their duties with respect to the system and the plan solely in the interest of its members, participants and beneficiaries, and for the ex- clusive purpose of providing benefits and defraying reasonable costs of administering the plan.

Section 22305 provides that any rules and regulations adopted by the board have the force and effect of law.

Section 22455 requires a county superintendent of schools or employing agency to furnish any further in- formation concerning any member or beneficiary the board may require.

Section 22455 further requires that

CALIFORNIA REGULATORY NOTICE REGISTER 2019, VOLUME NO. 10-Z 361 any information or reports required to be submitted to the system be submitted in a form, including, but not limited to, electronic transmission, as directed by the system.

Section 23004 requires a county superintendent of schools or employing agency to submit a report month- ly to the system containing information the board re- quires in the administration of the plan.

Section 23004 further requires that the monthly report be submitted electronically in an encrypted format provided by the system that ensures the security of the transmitted member data.

Section 26301 requires employers to report contribu- tions, along with all other information required by the system.

Section 26301 further provides that the board shall assess penalties for late and unacceptable submis- sion of reports for the Cash Balance Benefit Program. These amendments to the regulations further inter- pret and make specific Education Code sections 22457, 22717, 22717.5, 22718, 23004, 23006, 23008, 26301 and 26302. The board approved the proposed amendments on January 31, 2019, and directed CalSTRS staff to give public notice and

schedule a public hearing held by the CalSTRS Chief Executive Officer. INFORMATIVE DIGEST/POLICY STATEMENT OVERVIEW

Chapter 17 of

Part 13 of the Education Code requires that penalties and interest be assessed on employers for late or inaccurate contributions and reports. Effective July 1, 2012, the Penalties and Interest Regulations (Ar- ticle 15.5,

Chapter 1, Division 3, Title 5 of the Califor- nia Code of Regulations) were adopted by the board to ensure consistent and transparent assessment of penal- ties and interest. A key component of these regulations required that employers comply with the CalSTRS F496 and V oluntary Deduction File (VDF) specifica- tions when submitting monthly reports. CalSTRS has embarked on a pension administration system modernization effort, known as the Pension So- lution project, that will result in the replacement of the F496 and the VDF with a new file format (NFF).

CalSTRS’ pension administration system plays an es- sential role in the organization’s ability to fulfill its con- stitutional fiduciary responsibilities as well as its mis- sion of securing the financial future and sustaining the trust of California’s educators. The existing system is inflexible, increasingly expensive to maintain, and re- quires CalSTRS to undertake an increasing number of manual business processes.

The F496 and VDF files are authorized pursuant to sections 23004 and 26301 of the Education Code, which require employers to submit a report monthly or each pay period, respectively, (monthly report) to CalSTRS containing information the board may require in the administration of the Teachers’ Retirement Plan. In addition,

section 22455 of the Education Code re- quires county superintendents and other employing agencies to furnish any information concerning any member or beneficiary the board may require in a form, including electronic transmission, as directed by CalSTRS. Part of this information is necessary to uniquely iden- tify the employees for whom contributions are being re- mitted so that CalSTRS can accurately record and at- tribute the creditable service they have performed and the associated contributions for that service.

In addi- tion, mail and email addresses are necessary to comply with statutes requiring CalSTRS to provide members with an annual statement of their account. Lastly, the other information that CalSTRS requires from employ- ers is necessary to correctly and accurately calculate benefits, determine benefit eligibility or determine the effective date of those benefits. Pension Solution is a multi−year project with com- pletion anticipated in fiscal year 2022−23. The second of three implementation phases is currently scheduled for the fall of 2021.

This second implementation will in- clude the NFF, which consists of a contribution file and an employment file, and require the corresponding changes to CalSTRS regulations. The Contribution File, which replaces the existing F496 and VDF files, is associated with monthly payroll and contribution re- porting. The Employment File, which replaces the cur- rent MR87, address and accounts receivable files, is as- sociated with new hires, leaves, terminations, retire- ments, deaths, installment payments, address changes and other demographic changes.

Most data fields that are contained in the existing F496 and VDF files are be- ing carried forward into either the new Employment File or the new Contribution File. No other nonmonetary benefits, such as the protec- tion of public health and safety, worker safety or the en- vironment; the prevention of discrimination; the pro- motion of fairness or social equity; or an increase in transparency in business and government are anticipated. The regulations proposed in this rulemaking action make specific the Education Code as it relates to the re- quired submission of data from employers to the sys- tem.

CalSTRS evaluated whether the proposed regula- tions were inconsistent or incompatible with existing state regulations and found that there are no overlap- ping provisions with other state regulations. Thus, the

CALIFORNIA REGULATORY NOTICE REGISTER 2019, VOLUME NO. 10-Z 362 proposed regulations are neither inconsistent nor in- compatible with existing state regulations. DISCLOSURES REGARDING THE PROPOSED ACTION CalSTRS has made the following initial determina- tions, as required by the California Administrative Procedure Act and Office of Administrative Law regulations: 1. Mandate on local agencies and school districts: None. The proposed amendments to the regulations do not place a mandate on local agencies or school districts.

CalSTRS has determined that the regulations proposed do not constitute a mandate on school districts or other local agencies. The regulations do not mandate a new program or require a higher level of service in an existing program. These amendments affect school employers (including school districts, community college districts and county offices of education). They provide an updated format for existing responsibilities, the proper reporting of employee compensation to CalSTRS via an encrypted format provided by the system and the submission of member information required to provide benefits. 2.

Cost or savings to any state agency: None. The proposed amendments to the regulations are part of a larger technology project replacing the CalSTRS legacy pension administration system (the Pension Solution project). The regulations coincide with the new technology and are not themselves expected to result in any costs or savings to any state agency. 3. Cost to any local agency or school district which must be reimbursed in accordance with California Government Code sections 17500 through 17630: None.

While CalSTRS is aware that there will be a fiscal impact to employers, these costs, as noted above, are not considered state−mandated reimbursable claims. The California Supreme Court established that “new program or higher level of service” means an underlying program of services to the public. Although the proposed regulations would impose costs for reporting information to CalSTRS under the NFF, the reporting requirements do not constitute a program or service to the public.

Also, the court has established that contributions to public retirement systems are not programs to the public, but instead are part of the compensation of employees. Similarly, the information that is required to be reported under the proposed regulations, as with the existing regulations, is part of the process of accepting contribution payments and does not constitute a program in itself. 4. Other nondiscretionary costs or savings imposed on local agencies: There are 90 employers that report contribution information directly to CalSTRS. Of those 90 employers, 13 use custom payroll software.

CalSTRS estimates that those 13 employers would incur costs in the range of $50,000 to $400,000 each associated with updating their software. An additional five employers that do not report contribution information directly to CalSTRS also use custom payroll systems and are expected to make similar updates, with a similar cost range, in order to remain compatible with their respective county offices of education.

Based on feedback from all vendors with whom CalSTRS has met, CalSTRS anticipates that the 77 employers that report contribution information directly to CalSTRS using partner agency or vendor−supported payroll software would be covered by an updated release and would not incur additional costs. CalSTRS anticipates that no system upgrades are necessary for submission of information under the Employment File because this information can be submitted via a secure employer website portal. Some savings are anticipated by transitioning from paper forms to electronic transactions for several business processes. 5.

Cost or savings in federal funding to the state: None. These regulations do not relate to any federal program. 6. Significant, statewide adverse economic impact directly affecting business including the ability of California businesses to compete with businesses in other states: None. The proposed amendments are of interest to businesses within or outside the state that provide payroll software services to California school employers; however, the regulations do not place any mandate on those businesses or regulate those businesses in any way. 7.

Cost impacts on a representative private person or business: 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. The proposed amendments do not affect private persons or businesses.

CALIFORNIA REGULATORY NOTICE REGISTER 2019, VOLUME NO. 10-Z 363 8. Results of the economic impact assessment/ analysis: These regulations are not anticipated to have any direct, indirect or induced effect on California businesses. Specifically: The action will not have any effect on the creation or elimination of jobs within the state. The action will not affect the creation of new businesses or the elimination of existing businesses within the state. The action will not affect the expansion of businesses currently doing business within the state.

The action will have no effect on worker safety and the state’s environment. These regulations will not affect the health and welfare of California residents. The proposed action will clarify the standards for, and promote clear and consistent reporting of, compensation by public school employers.

As stated in the Informative Digest/Policy Statement Overview, the proposed regulations provide an updated format for correct reporting for county offices of education and school and community college district employers filing reports with CalSTRS and help ensure that retirement and other benefits payable to educators are based on properly reported data. 9. Significant effect on housing costs: None. The proposed amendments do not relate directly or indirectly to housing costs. 10.

Small business determination: The board has determined that the proposed regulations do not affect small business as small businesses are not governed or affected, either directly or indirectly, by the statute that these regulations are clarifying. CONSIDERATION OF ALTERNATIVES In accordance with paragraph (13) of subdivision (

a) of

section 11346.5 of the Government Code, CalSTRS and the board must determine that no reasonable alter- native considered or otherwise identified and brought to its attention would be: More effective in carrying out the purpose for which the action is proposed, As effective and less burdensome to affected private persons than the proposed action, or More cost effective to affected private persons and equally effective in implementing the statutory policy or other provision of law.

CalSTRS and the board invite interested persons to present any statements or arguments that would support an alternative to the proposed regulations in the form of written comments or by providing testimony at the pub- lic hearing. CONTACT PERSON Inquiries concerning the proposed action may be di- rected to: Sal Sanchez Governmental Relations California State Teachers’ Retirement System P.O.

Box 15275, MS−14 Sacramento, CA 95851−0275 Telephone: (916) 414−1994 E−Mail: Regulations@CalSTRS.com The backup contact person for these inquiries is: John Maradik−Symkowick Governmental Relations California State Teachers’ Retirement System P.O. Box 15275, MS−14 Sacramento, CA 95851−0275 Telephone: (916) 414−1994 E−Mail: Regulations@CalSTRS.com Please direct requests for copies of the proposed text of the regulations, the Initial Statement of Reasons, the modified text of the regulations, if any, or other infor- mation upon which the rulemaking is based to CalSTRS using the contact information listed above.

A V AILABILITY OF STATEMENT OF REASONS AND TEXT OF PROPOSED REGULATIONS The rulemaking file is available for public inspection and copying throughout the rulemaking process at CalSTRS headquarters at 100 Waterfront Place, West Sacramento, CA, 95605. As of the date this notice is published in the California Notice Register, the rule- making file consists of this notice, the proposed text of the regulations, the Initial Statement of Reasons and the Economic and Fiscal Impact Statement (STD 399).

Copies of this notice, the proposed text of the regula- tions, the Initial Statement of Reasons and the Econom- ic and Fiscal Impact Statement are available at no charge by contacting CalSTRS using the contact infor- mation listed above. • • • • • • •

CALIFORNIA REGULATORY NOTICE REGISTER 2019, VOLUME NO. 10-Z 364 A V AILABILITY OF CHANGED OR MODIFIED TEXT After considering all timely and relevant comments received, the board may adopt the proposed regulations substantially as described in this notice or may, on its own motion or at the recommendation of any interested person, modify the proposed regulations. If the board makes modifications that are sufficiently related to the original proposed text, it will make the modified text (with the changes clearly indicated) avail- able to the public for at least 15 days before adopting the regulations as revised.

The board will accept written comments on the modified regulations for 15 days after the date on which they are made available. Please refer to www.CalSTRS.com/regulations or contact CalSTRS using the contact information listed above for copies of modifications, if any. A V AILABILITY OF FINAL STATEMENT OF REASONS Following its preparation, CalSTRS will have the Fi- nal Statement of Reasons available for public inspec- tion and copying at its headquarters, located at 100 Wa- terfront Place, West Sacramento, CA, 95605.

Upon fil- ing of the amended regulations with the Secretary of State, the Final Statement of Reasons will also be avail- able temporarily on the CalSTRS website at www.CalSTRS.com/approved−regulations. A V AILABILITY OF DOCUMENTS ON THE INTERNET The Notice of Proposed Rulemaking, the Initial Statement of Reasons and the text of the proposed amendments to the regulations in underline and strike- out are posted on the CalSTRS website at www.CalSTRS.com/regulations. TITLE 8.

LABOR COMMISSIONER’S OFFICE DEPARTMENT OF INDUSTRIAL RELATIONS Division of Labor Standards Enforcement Subject Matter of Regulations: Enforcement of Client Employer Liability Under Labor Code

Section 2810.3 Sections 13830, 13831, 13832 NOTICE IS HEREBY GIVEN that the Labor Com- missioner, Chief of the Division of Labor Standards En- forcement, Department of Industrial Relations, pur- suant to the authority vested in the Labor Commissioner by Labor Code

section 2810.3(j), proposes to adopt sec- tions 13830 through 13832 in proposed Subchapter 13.5 of existing

Chapter 6, of Division 1, of Title 8, Cal- ifornia Code of Regulations, relating to Enforcement of Client Employer Liability Under Labor Code

Section 2810.3. PROPOSED REGULATORY ACTION The Labor Commissioner proposes to adopt Sub-

chapter 13.5 of

Chapter 6 of Division 1, regulations consisting of the following:

Section 13830

Definitions

Section 13831 Recordkeeping

Section 13832 Methods for Determining Liability Among Multiple Client Employers TIME AND PLACE OF PUBLIC HEARING A public hearing has been scheduled to permit all in- terested persons the opportunity to present statements or arguments, either orally or in writing, with respect to the subjects noted above.

The hearing will be held at the following time and place: Date: April 26, 2019 Time: 10:00 a.m. to 5:00 p.m., or conclusion of business Place: Elihu Harris State Building Room 2 Meeting Room, 2nd Floor 1515 Clay Street Oakland, CA 94612 The State Office Building and designated room are accessible to persons with mobility impairments. Alter- nate formats, assistive listening systems, sign language interpreters, or other type of reasonable accommoda- tion to facilitate effective communication for persons with disabilities, are available upon request. Please con-

CALIFORNIA REGULATORY NOTICE REGISTER 2019, VOLUME NO. 10-Z 365 tact the Division of Labor Standards Enforcement at 510−285−2118 to request an accommodation, or through the California Relay Service by dialing 711 or 1−800−735−2929 (TTY/English) or 1−800−855−3000 (TTY/Spanish) as soon as possible to request assistance. Please note that public comment will begin promptly at 10:00 a.m. and will conclude when the last speaker has finished his or her presentation or 5:00 p.m., whichever is earlier. If public comment concludes before the noon recess, no afternoon session will be held.

The Labor Commissioner requests, but does not re- quire, that any persons who make oral comments at the hearing also provide a written copy of their comments. Equal weight will be accorded to oral comments and written materials. 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 of Indus- trial Relations, Division of Labor Standards Enforce- ment. The written comment period closes at mid- night on April 22, 2019.

The Labor Commissioner will consider only comments received at the Division by that time. Equal weight will be accorded to comments presented at the hearing and to other written comments received by midnight on that date by the Division.

Submit written comments concerning the proposed regulations prior to the close of the public comment pe- riod to: Jennifer Stevens, Legislative Analyst and Regulations Coordinator Department of Industrial Relations Division of Labor Standards Enforcement, Legal Unit 2031 Howe Avenue, Suite 100 Sacramento, CA 95825 Written comments may be submitted by facsimile transmission (FAX), addressed to the above−named contact person at (916) 263−2920. Written comments may also be sent electronically (via e−mail) using the following e−mail address: DLSERegulations@dir. ca.gov.

AUTHORITY AND REFERENCE The Labor Commissioner is undertaking this regula- tory action pursuant to the authority under Labor Code

section 2810.3(j). Reference is to Labor Code

section 2810.3. INFORMATIVE DIGEST AND POLICY STATEMENT OVERVIEW Existing law establishes that a “client employer” (specifically defined with exemptions) shall “share” with its “labor contractor” (specifically defined with exemptions) “all civil legal responsibility and civil lia- bility for all workers supplied by that labor contractor,” meaning joint and several liability of the labor contrac- tor and its client business(es) for any failure on the part of the labor contractor to pay wages as provided by law or to secure workers’ compensation insurance. (AB 1897 [Chapter 728, Statutes of 2014].) Existing law provides that, for purposes of client em- ployer liability under Labor Code

section 2810.3, “wages” has the same meaning provided in Labor Code

section 200, and includes all sums payable to an em- ployee or the state based upon any failure to pay wages, as provided by law. “Wages” is defined under Labor Code

section 200 as “all amounts for labor performed by employees of every description.” Under Labor Code

section 2810.3, “labor” is also defined according to La- bor Code

section 200, as including “labor, work, or service.” Existing law authorizes the Labor Commissioner to seek from both client employers and their labor contrac- tors “any information” required to verify compliance with the law. Existing law does not specify how the statutory shared liability under Labor Code

section 2810.3 should be allocated when a labor contractor provides the same workers to perform labor, work, or services for more than one client employer, at each respective client employer’s worksite or premises, in a workday or work- week, and the labor contractor fails to pay wages as re- quired by law. Existing law authorizes the Labor Commissioner to adopt regulations and rules of practice and procedure necessary to administer and enforce the shared liability and information−provision requirements of the law. The proposed regulation will provide necessary stan- dards for enforcement of client employer liability under Labor Code

section 2810.3. These standards include a definition of “wages” for purposes of Labor Code sec- tion 2810.3(a)(4), which specifies the wages, as well as damages and penalties as “sums payable to an employee or the state based upon any failure to pay wages, as pro- vided by law,” that are encompassed within this section. In addition, the proposal establishes a recordkeeping re- quirement specifying the types of records a labor con- tractor employer must maintain and make available to the Labor Commissioner upon request, in order to en- sure compliance with the law.

Finally, the proposal pro- vides methods for allocating client employers’ shared statutory liability for wages, damages, and penalties

CALIFORNIA REGULATORY NOTICE REGISTER 2019, VOLUME NO. 10-Z 366 where the same workers have performed labor, work, or services for more than one client employer, at each re- spective client employer’s worksite or premises, during a workweek or workday and the labor contractor has failed to pay the workers’ wages as required by law. These methods may be used to determine each client employer’s proportionate share of liability, as appropri- ate under the circumstances of the case.

The regulation containing methods of allocating shared liability, along with the recordkeeping and definitional provisions, is necessary for the Labor Commissioner to efficiently and equitably administer and enforce multiple client employer wage liability under Labor Code

section 2810.3. The proposed regulation implements, interprets, and clarifies shared liability of multiple client employers under Labor Code

section 2810.3 as follows: Proposed Subchapter 13.5 (of

Chapter 6, Division 1, Title 8 of the California Code of Regulations) contains three discrete regulatory provisions to address client employer liability when a labor contractor provides the same workers to perform labor, work, or services for more than one client employer, at each respective client employer’s worksite or premises, in a workday or work- week, and the labor contractor fails to pay wages as re- quired by law.

Section 13830 provides a definition of “wages” for purposes of client employer liability under Labor Code

section 2810.3(a)(4), which states that “wages” has the same meaning provided in Labor Code

section 200, and includes all sums payable to an employee or the state based upon any failure to pay wages, as provided by law. The proposed definition references relevant Labor Code provisions relating to wages (including mini- mum, regular, overtime, or other premium wages), as well as relevant Labor Code provisions relating to dam- ages and penalties that are due to the worker or to the state based upon any failure to pay wages as provided by law.

Section 13831 provides a recordkeeping requirement for labor contractors under Labor Code

section 2810.3 that addresses situations in which there are multiple client employers. In addition to existing requirements in Labor Code sections 226, 1174, and

section 6 or 7 of any applicable order of the Industrial Welfare Commis- sion with respect to employers’ obligation to maintain records of daily hours worked (including compensable travel time), when the employee begins and ends each work period, and meal periods, labor contractors also would be required to maintain records showing when each employee begins and ends each work period at each worksite or premises of each client employer, as well as workers’ time traveling between each worksite or premises of the client employer(s).

This proposed recordkeeping provision also requires labor contractors to maintain a list identifying each client employer for which workers were provided by the labor contractor to perform labor, work, or services, the address of the worksite or premises where labor, work, or services were performed, and the corresponding time period (beginning and end calendar dates) of such performance.

Section 13832 provides several methods for allocat- ing shared liability where a labor contractor has provid- ed the same workers to perform labor, work, or services at the worksite or premises of more than one client em- ployer in a workweek or workday, and has failed to pay the workers’ wages as provided by law.

The basis for al- locating liability may consist of: (1) the proportionate share of the hours worked per workweek for each client employer as compared to the total hours worked in the workweek; (2) the proportionate share of the hours worked per workday for each client employer as com- pared to the total hours worked in the workday; (3) if records maintained by the labor contractor are insuffi- cient to determine allocations under the previous two methods, worker testimony and any other available evi- dence, including reliable client employer evidence, may be used to determine allocations under either pre- ceding method; and (4) if records, worker testimony, and any other available evidence are insufficient to de- termine allocations under the first two methods, the full amount of liability will be apportioned equally amongst all known client employers.

Election among these op- tions is at the discretion of the Labor Commissioner or a court, as appropriate under the circumstances of the case. OBJECTIVE AND ANTICIPATED BENEFITS OF THE PROPOSED REGULATIONS The proposed regulation is intended to address a dis- crete enforcement issue under Labor Code

section 2810.3, which created shared liability for client em- ployers that obtain or are provided workers through la- bor contractors to perform labor, work, or services with- in the client employer’s usual course of business.

Ac- cording to the author of this legislation, the purpose of the bill was to “hold[ ] companies accountable for seri- ous violations of workers’ rights, committed by their own labor suppliers, to workers on their premises” and to “incentivize the use of responsible contractors.” (Senate Judiciary Committee Bill Analysis June 23, 2014 at p.5.) The author further explained that the legis- lation would benefit both vulnerable workers, by “of- fering a clear path to accountability for workplace vio- lations,” and businesses that follow the law, by “of- fer[ing] a clear path to compliance.” (Id.) Since enactment of the statute, the Labor Commis- sioner’s Office has encountered cases where workers of

CALIFORNIA REGULATORY NOTICE REGISTER 2019, VOLUME NO. 10-Z 367 labor contractors perform labor, work, or services at the worksite or premises of more than one client employer business within a workday or workweek. Labor Code

section 2810.3 does not provide guidance for determin- ing the statutory shared liability among multiple client employers in this situation, and there is a need to pro- vide more uniform guidance for the regulated commu- nity (including labor contractors and their client busi- nesses), workers, and the courts regarding standards for allocating liability where there are multiple client em- ployers subject to liability under the statute. The objec- tive of the proposed regulation is to establish standards necessary for the Labor Commissioner to efficiently and equitably administer and enforce multiple client employer wage liability under Labor Code

section 2810.3. The benefit of the proposed regulation is that it will facilitate payment of unpaid wages, damages, and penalties due to workers and the state under the statuto- ry shared liability provision in

section 2810.3, and pro- vide clarity regarding how this provision will be en- forced when the same workers perform labor, work, or services at the worksite or premises of more than one client employer in a given workweek or workday. Workers, labor contractors, and client employers in- volved in subcontracted work arrangements will be aid- ed by clear rules regarding allocation of liability, and courts and the Labor Commissioner’s Office will be able to more efficiently render liability determinations following promulgation of this regulation.

Thus, the regulatory action furthers the mission of the Labor Commissioner’ Office, which is to ensure a just day’s pay to every worker and promote economic justice. In addition, the proposed regulation increases transparen- cy in business and government by setting forth rules for allocating liability. Finally, the proposed action indi- rectly prevents discrimination, and promotes fairness and social equity.

DETERMINATION OF INCONSISTENCY AND/OR INCOMPATIBILITY WITH EXISTING STATE REGULATIONS The Labor Commissioner has determined that these proposed regulations are not inconsistent or incompati- ble with existing state statutes or other regulations. Af- ter conducting a review for any regulations that would relate to or affect this area, the Labor Commissioner has concluded that these are the only regulations that per- tain to enforcement of client employer liability under Labor Code

section 2810.3. DISCLOSURES REGARDING THE PROPOSED REGULATORY ACTION The Labor Commissioner has made the following ini- tial determinations: Mandate on 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. Direct cost impacts on housing: None.

Cost impacts on a representative private person or business: The Labor Commissioner’s Office estimates one−time recordkeeping compliance costs of $138.84 for a representative private person or business. Effect on Small Business: The Labor Commissioner’s Office estimates one−time recordkeeping compliance costs of $138.84 for a small business. Significant Statewide Adverse Economic Impact Directly Affecting Business, Including the Ability of California Businesses to Compete with Businesses in Other States: None.

Summary of Results of the Economic Impact Analysis/Assessment The Labor Commissioner’s Office concludes that it is (1) unlikely that the proposal will create any jobs within the State of California; (2) unlikely that the proposal will eliminate any jobs within the State of California; (3) unlikely that the proposal will create any new busi- nesses within the State of California; (4) unlikely that the proposal will eliminate any existing businesses within the State of California; (5) unlikely that the pro- posal would cause the expansion of businesses current- ly doing business within the State of California; and (6) likely to provide clarity to businesses that face statutory shared liability under Labor Code

section 2810.3. Ac- cordingly, the Labor Commissioner has determined that the proposed regulatory action will not have a signifi- cant impact on business. Benefits of the Proposed Action: By facilitating pay- ment of unpaid wages to workers and setting forth rules for allocating liability, the proposed regulations will benefit California residents. The regulatory action fur- thers the mission of the Labor Commissioner’ Office, which is to ensure a just day’s pay to every worker and promote economic justice. In addition, the proposed regulation increases transparency in business and gov- ernment by setting forth rules for allocating liability. Fi-

CALIFORNIA REGULATORY NOTICE REGISTER 2019, VOLUME NO. 10-Z 368 nally, the proposed action indirectly prevents discrimi- nation, and promotes fairness and social equity. CONSIDERATION OF ALTERNATIVES In accordance with Government Code

section 11346.5(a)(13), the Labor Commissioner must deter- mine that no reasonable alternative considered or that has otherwise been identified and brought to the Labor Commissioner’s attention would be more effective in carrying out the purpose for which the actions are pro- posed, or would be as effective and less burdensome to affected private persons than the proposed actions, or would be more cost−effective to affected private per- sons and equally effective in implementing the statuto- ry policy or other provision of law.

The Labor Commissioner has initially determined that no alternatives would be more effective in carrying out the purpose that underlies the proposed regulatory action, or would be at least as effective or less burden- some on the regulated public (labor contractors and businesses that use labor contractors). The Labor Commissioner invites interested persons to present reasonable alternatives to the proposed regu- lations at the scheduled hearing or during the written comment period.

PUBLIC DISCUSSIONS OF PROPOSED REGULATIONS Prior to proposing to adopt these regulations, the La- bor Commissioner discussed the need for regulations governing multiple client employer liability with repre- sentatives from worker and employer communities. A V AILABILITY OF INITIAL STATEMENT OF REASONS, TEXT OF PROPOSED REGULATIONS, RULEMAKING FILE AND DOCUMENTS SUPPORTING THE RULEMAKING FILE/INTERNET ACCESS An Initial Statement of Reasons and the text of the proposed regulations in plain English have been pre- pared and are available from the contact person named in this notice.

The entire rulemaking file will be made available for inspection and copying at the address indi- cated below. As of the date of this Notice, the rulemaking file con- sists of the Notice, the Initial Statement of Reasons, pro- posed text of the regulations, and the Economic and Fis- cal Impact Statement (Form STD 399). In addition, the Notice, Initial Statement of Reasons, and proposed text of regulations may be accessed and downloaded from the Department of Industrial Rela- tions’ website at https://www.dir.ca.gov/Rulemaking/ DIRProposed.html.

To access them, please scroll to Di- vision of Labor Standards Enforcement (DLSE), and click on the link for Enforcement of Client Employer Liability Under Labor Code

Section 2810.3. Any interested person may inspect a copy or direct questions about the proposed regulations and any sup- plemental information contained in the rulemaking file. The rulemaking file will be available for inspection at the Division of Labor Standards Enforcement, 2031 Howe Avenue, Suite 100, Sacramento, California, be- tween 9:00 a.m. and 4:30 p.m., Monday through Friday, unless the state office is closed for a state holiday. Copies of the proposed regulations, initial statement of reasons and any information contained in the rulemak- ing file may be requested in writing to the contact per- son.

CONTACT PERSON Nonsubstantive inquiries concerning this action, such as requests to be added to the mailing list for rule- making notices, requests for copies of the text of the proposed regulations, the Initial Statement of Reasons, and any supplemental information contained in the rulemaking file may be requested in writing at the same address.

The contact person is: Jennifer Stevens, Legislative Analyst and Regulations Coordinator Department of Industrial Relations Division of Labor Standards Enforcement, Legal Unit 2031 Howe Avenue, Suite 100 Sacramento, CA 95825 E−mail: jstevens@dir.ca.gov The telephone number of the contact person is (916) 263−1563.

CONTACT PERSON FOR SUBSTANTIVE QUESTIONS In the event the contact person is unavailable, or to obtain responses to questions regarding the substance of the proposed regulations, inquiries should be direct- ed to the following backup contact person: Laura Moskowitz, Staff Attorney Department of Industrial Relations Division of Labor Standards Enforcement, Legal Unit 455 Golden Gate Avenue, 9th Floor San Francisco, CA 94102 E−mail: lmoskowitz@dir.ca.gov The telephone number of the backup contact person is (415) 703−5252.

CALIFORNIA REGULATORY NOTICE REGISTER 2019, VOLUME NO. 10-Z 369 A V AILABILITY OF CHANGES FOLLOWING PUBLIC HEARING If the Labor Commissioner makes changes to the pro- posed regulations as a result of the public hearing and public comment received, the modified text with changes clearly indicated will be made available for public comment for at least 15 days prior to the date on which the regulations are adopted.

A V AILABILITY OF THE FINAL STATEMENT OF REASONS Upon its completion, the Final Statement of Reasons will be available and copies may be requested from the contact person named in this notice or may be accessed on the Department of Industrial Relations’ website at www.dir.ca.gov/Rulemaking/DIRProposed.html. AUTOMATIC MAILING A copy of this Notice, the Initial Statement of Rea- sons, and the text of the regulations, will automatically be sent to those interested persons on the DLSE’s mail- ing list. If adopted, the regulations as amended will appear in title 8, California Code of Regulations, commencing with

section 13830. The text of the final regulations will also be available through the website of the Office of Administrative Law at www.oal.ca.gov. TITLE 10. DEPARTMENT OF INSURANCE REG−2019−00008 NOTICE OF PROPOSED ACTION AND NOTICE OF PUBLIC HEARING REGARDING THE CALIFORNIA AUTOMOBILE ASSIGNED RISK PLAN PLAN OF OPERATIONS SUBJECT OF HEARING California Insurance Commissioner Ricardo Lara will hold a public hearing to address the proposed amendments to the California Automobile Assigned Risk Plan (CAARP) Plan of Operations.

AUTHORITY TO ADOPT RULES AND PROCEDURES AND REFERENCE The Commissioner will consider the proposed changes pursuant to the authority vested in him by Sec- tion 11620 of the California Insurance Code. The Com- missioner’s decision on the proposed changes will im- plement, interpret, or make specific the requirements of Insurance Code

Section 11624(e). Insurance Code Sec- tion 11620(

c) applies to this proceeding. HEARING DATE AND LOCATION Notice is hereby given that a public hearing will be held to permit all interested persons the opportunity to present statements or arguments, orally or in writing, with respect to the application at the following date, time, and place: Date: May 7, 2019 Time: 1:00 p.m. Place: Department of Insurance Hearing Room 300 South Spring Street Los Angeles, CA 90013 The hearing will continue on the date noted above until all testimony has been submitted or until 5:00 p.m., whichever is earlier.

ACCESS TO HEARING ROOM The facilities to be used for the public hearing are ac- cessible to persons with mobility impairments. Persons with sight or hearing impairments are requested to noti- fy the contact person (listed below) for this hearing in order to make special arrangements, if necessary. WRITTEN AND/OR ORAL COMMENTS: AGENCY CONTACT PERSON All persons are invited to submit written comments to the Insurance Commissioner on the application prior to the public comment deadline.

Comments should be ad- dressed to the contact person for this proceeding: Contact Person: Michael Riordan, Attorney California Department of Insurance Rate Enforcement Bureau 45 Fremont Street, 21st Floor San Francisco, CA 94105 riordanm@insurance.ca.gov Telephone: (415) 538−4226 Facsimile: (415) 904−5490

CALIFORNIA REGULATORY NOTICE REGISTER 2019, VOLUME NO. 10-Z 370 The backup agency contact person for this proceed- ing will be: Emily Gallagher, Attorney California Department of Insurance Rate Enforcement Bureau 45 Fremont Street, 21st Floor San Francisco, CA 94105 gallaghere@insurance.ca.gov Telephone: (415) 538−4108 All persons are invited to present oral and/or written testimony at the scheduled public hearing. DEADLINE FOR WRITTEN COMMENTS All written materials, unless submitted at the hearing, must be received by the Insurance Commissioner at the address listed above no later than 5:00 p.m. on May 7, 2019.

Any written materials received after that time will not be considered. Written comments may also be sub- mitted to the contact person by e−mail or facsimile transmission. Please select only one method to submit written comments. ADVOCACY OR WITNESS FEES Persons or groups representing the interest of con- sumers may be entitled to reasonable advocacy fees, witness fees, and other reasonable expenses, in accor- dance with the provisions of California Code of Regula- tions, Title 10, Sections 2662.1−2662.6 in connection with their participation in this matter.

Interested persons must submit a Petition to Participate, as specified in California Code of Regulations, Title 10,

Section 2661.4. The Petition to Participate must be submitted to the Commissioner at the Office of the Public Advisor at the following address: California Department of Insurance Office of the Public Advisor 300 Spring Street, 12th Floor Los Angeles, CA 90013 Telephone: (213) 346−6635 A copy of the Petition to Participate must also be sub- mitted to the contact person for this hearing (listed above). For further information, please contact the Of- fice of the Public Advisor.

INFORMATIVE DIGEST/POLICY STATEMENT OVERVIEW CA 19−02 The Commercial Automobile Insurance Program (“CAIP”) servicing carrier may charge off uncollected deposit, installment, or additional premium payments in accordance with Plan rules. This is provided they are eligible in accordance with CAIP Accounting and Sta- tistical Manual Requirements. In the past several years, there has been a significant increase in the number of premium charge−offs resulting from applicant checks with nonsufficient funds. This problem can be ad- dressed by introducing a certified funds requirement for all CAIP risks.

CAARP proposes that all CAIP risks be required to only accept a certified check for deposits. This should eliminate CAIP charge−offs related to nonsufficient funds checks. This will result in a reduction in the amount of CAIP charge−offs borne by member compa- nies through CAIP member participation and passed on to consumers in rate increases. COMPARABLE FEDERAL LAW There are no comparable existing federal regulations or statutes. LOCAL MANDATE DETERMINATION The Insurance Commissioner has initially deter- mined that the application will not result in any new program mandates on local agencies or school districts.

MANDATES ON LOCAL AGENCIES OR SCHOOL DISTRICTS OR COSTS WHICH MUST BE REIMBURSED PURSUANT TO GOVERNMENT CODE SECTIONS 17500 THROUGH 17630 The Insurance Commissioner has initially deter- mined that the application will not result in any cost or significant savings to any local agency or school district for which

Part 7 (commencing with

Section 17500) of Division 4 of the Government Code would require re- imbursement, or in other nondiscretionary costs or sav- ings to local agencies. COST OR SA VINGS TO ANY STATE AGENCY; FEDERAL FUNDING The Commissioner has determined that the applica- tion will result in no cost or savings to any state agency and no cost or savings in federal funding to the state.

CALIFORNIA REGULATORY NOTICE REGISTER 2019, VOLUME NO. 10-Z 371 SIGNIFICANT STATEWIDE ADVERSE ECONOMIC IMPACT ON BUSINESSES AND THE ABILITY OF CALIFORNIA BUSINESSES TO COMPETE The Commissioner has initially determined that the proposal will not have a significant statewide adverse economic impact directly affecting businesses, includ- ing the ability of California businesses to compete with businesses in other states.

This proposal will have no ef- fect on the creation or elimination of jobs in California, the creation of new businesses, the elimination of exist- ing businesses in California, or the expansion of busi- nesses in California. COST IMPACTS ON PRIV ATE PERSONS OR ENTITIES The Insurance Commissioner has initially deter- mined that the proposal will not affect private persons or entities. IMPACT ON HOUSING COSTS The Insurance Commissioner has initially deter- mined that the application will not affect housing costs. IMPACT ON SMALL BUSINESS The proposed rate changes could affect small businesses.

SPECIFIC TECHNOLOGIES OR EQUIPMENT The application would not mandate the use of specif- ic technologies or equipment. ALTERNATIVES The Insurance Commissioner must determine that no reasonable alternative considered by the agency, or that has otherwise been identified and brought to the atten- tion of the agency, would be more effective in carrying out the purpose for which the action is proposed or would be as effective and less burdensome to affected private persons than the proposed action. PLAIN ENGLISH The application describing the proposal is in plain English.

However, the application itself is based on technical actuarial principles. TEXT AND INITIAL STATEMENT OF REASONS The Department has prepared an Initial Statement of Reasons addressing the proposed rate application in ad- dition to the Informative Digest included in this notice. The Initial Statement of Reasons, Notice of Proposed Action and Regulation Text are available for inspection or copying, and will be provided at no charge upon re- quest to the contact person listed above. Further details on CAARP’s proposal are on file with the Commission- er and available for review as set forth below.

FINAL STATEMENT OF REASONS A Final Statement of Reasons will be prepared at the conclusion of this proceeding. Upon written or e−mail request to the contact person listed above, the Final Statement of Reasons will be made available for inspec- tion and copying once it has been prepared. A copy of the Final Statement of Reasons will also be posted on the Department’s website.

ACCESS TO RULEMAKING FILE Any interested person may inspect a copy of or direct questions about CAARP’s application, the statement of reasons, and any supplemental information contained in the rulemaking file by contacting the contact person listed above. By prior appointment, the rulemaking file is available for inspection at 45 Fremont Street, 21 st Floor, San Francisco, California 94105, between the hours of 9:00 a.m. and 4:30 p.m. Monday through Friday. AUTOMATIC MAILING A copy of this Notice, including the Informative Di- gest, is being sent to all persons on the Insurance Com- missioner’s mailing list.

A V AILABILITY OF DOCUMENTS ON THE INTERNET The Initial Statement of Reasons, proposed text, and this Notice of Proposed Action will be published online and may be accessed through the Department’s website at www.insurance.ca.gov. A V AILABILITY OF MODIFIED TEXT OF REGULATIONS If the Department amends the application with changes that are sufficiently related to the original ap- plication, the Department will make the full text of the

CALIFORNIA REGULATORY NOTICE REGISTER 2019, VOLUME NO. 10-Z 372 amended rates, with the changes clearly indicated, available to the public for at least 15 days before the date the Department adopts the amended rates. TITLE 10.

DEPARTMENT OF INSURANCE REG−2019−00009 NOTICE OF PROPOSED ACTION AND NOTICE OF PUBLIC HEARING FOR THE CALIFORNIA AUTOMOBILE ASSIGNED RISK PLAN SIMPLIFIED MANUAL OF RULES AND RATES SUBJECT OF HEARING California’s Insurance Commissioner will hold a public hearing to consider the application of the Cali- fornia Automobile Assigned Risk Plan (“CAARP” or “Plan”) for changes to the Simplified Manual of Rules and Rates. AUTHORITY AND REFERENCE TO ADOPT RATES The Commissioner will consider the application pur- suant to the authority vested in him by

Section 11620 of the California Insurance Code. The Commissioner’s decision on the application will implement, interpret, or make specific the requirements of Insurance Code Sec- tion 11624(e). Government Code §11340.9(

g) applies to this proceeding. HEARING DATE AND LOCATION Notice is hereby given that a public hearing will be held to permit all interested persons the opportunity to present statements or arguments, orally or in writing, with respect to the application at the following date, time, and place: Date: May 7, 2019 Time: 1:00 p.m. Place: Department of Insurance Hearing Room 300 South Spring Street Los Angeles, CA 90013 The hearing will continue on the date noted above until all testimony has been submitted or until 5:00 p.m., whichever is earlier.

ACCESS TO HEARING ROOM The facilities to be used for the public hearing are ac- cessible to persons with mobility impairments. Persons with sight or hearing impairments are requested to noti- fy the contact person (listed below) for this hearing in order to make special arrangements, if necessary. WRITTEN AND/OR ORAL COMMENTS: AGENCY CONTACT PERSON All persons are invited to submit written comments to the Insurance Commissioner on the application prior to the public comment deadline.

Comments should be ad- dressed to the contact person for this proceeding: Contact Person: Michael Riordan, Attorney California Department of Insurance Rate Enforcement Bureau 45 Fremont Street, 21st Floor San Francisco, CA 94105 riordanm@insurance.ca.gov Telephone: (415) 538−4226 Facsimile: (415) 904−5490 The backup agency contact person for this proceed- ing will be: Emily Gallagher, Attorney California Department of Insurance Rate Enforcement Bureau 45 Fremont Street, 21st Floor San Francisco, CA 94105 gallaghere@insurance.ca.gov Telephone: (415) 538−4108 All persons are invited to present oral and/or written testimony at the scheduled public hearing.

DEADLINE FOR WRITTEN COMMENTS All written materials, unless submitted at the hearing, must be received by the Insurance Commissioner at the address listed above no later than 5:00 p.m. on May 7, 2019. Any written materials received after that time will not be considered. Written comments may also be sub- mitted to the contact person by e−mail or facsimile transmission. Please select only one method to submit written comments. ADVOCACY OR WITNESS FEES Persons or groups representing the interest of con- sumers may be entitled to reasonable advocacy fees, witness fees, and other reasonable expenses, in accor-

CALIFORNIA REGULATORY NOTICE REGISTER 2019, VOLUME NO. 10-Z 373 dance with the provisions of California Code of Regula- tions, Title 10, Sections 2662.1−2662.6 in connection with their participation in this matter. Interested persons must submit a Petition to Participate, as specified in California Code of Regulations, Title 10,

Section 2661.4. The Petition to Participate must be submitted to the Commissioner at the Office of the Public Advisor at the following address: California Department of Insurance Office of the Public Advisor 300 Spring Street, 12th Floor Los Angeles, CA 90013 Telephone: (213) 346−6635 A copy of the Petition to Participate must also be sub- mitted to the contact person for this hearing (listed above). For further information, please contact the Of- fice of the Public Advisor. INFORMATIVE DIGEST/POLICY STATEMENT OVERVIEW CA 19−01 Recent changes have impacted a common provision in business contracts.

The change requires that when a party to the contract amends its insurance policy to pro- vide coverage that is primary to the other party’s insur- ance that party will not seek contribution from that oth- er party’s insurance if there is a claim. CAARP proposes (1) retitling Rule 60 and amending the Waiver of Subrogation rule to include a primary and noncontributory other insurance condition if required by contract, (2) introducing Form AP 70 71 09 18, Pri- mary and Noncontributory — Other Insurance Condi- tion endorsement, and (3) amending AIP 1251, the Commercial Application, to include a

section for use when this condition is required by contract. COMPARABLE FEDERAL LAW There are no comparable existing federal regulations or statutes. LOCAL MANDATE DETERMINATION The Insurance Commissioner has initially deter- mined that the application will not result in any new program mandates on local agencies or school districts. MANDATES ON LOCAL AGENCIES OR SCHOOL DISTRICTS OR COSTS WHICH MUST BE REIMBURSED PURSUANT TO GOVERNMENT CODE SECTIONS 17500 THROUGH 17630 The Insurance Commissioner has initially deter- mined that the application will not result in any cost or significant savings to any local agency or school district for which

Part 7 (commencing with

Section 17500) of Division 4 of the Government Code would require re- imbursement, or in other nondiscretionary costs or sav- ings to local agencies. COST OR SA VINGS TO ANY STATE AGENCY; FEDERAL FUNDING The Commissioner has determined that the applica- tion will result in no cost or savings to any state agency and no cost or savings in federal funding to the state.

SIGNIFICANT STATEWIDE ADVERSE ECONOMIC IMPACT ON BUSINESSES AND THE ABILITY OF CALIFORNIA BUSINESSES TO COMPETE The Commissioner has initially determined that the proposal will not have a significant statewide adverse economic impact directly affecting businesses, includ- ing the ability of California businesses to compete with businesses in other states. This proposal will have no ef- fect on the creation or elimination of jobs in California, the creation of new businesses, the elimination of exist- ing businesses in California, or the expansion of busi- nesses in California.

COST IMPACT ON PRIV ATE PERSONS OR ENTITIES The Insurance Commissioner has initially deter- mined that the proposal will not affect private persons or entities. IMPACT ON HOUSING COSTS The Insurance Commissioner has initially deter- mined that the application will not affect housing costs. IMPACT ON SMALL BUSINESS The proposed rate changes could affect small businesses. SPECIFIC TECHNOLOGIES OR EQUIPMENT The application would not mandate the use of specif- ic technologies or equipment.

CALIFORNIA REGULATORY NOTICE REGISTER 2019, VOLUME NO. 10-Z 374 ALTERNATIVES The Insurance Commissioner must determine that no reasonable alternative considered by the agency, or that has otherwise been identified and brought to the atten- tion of the agency, would be more effective in carrying out the purpose for which the action is proposed or would be as effective and less burdensome to affected private persons than the proposed action. PLAIN ENGLISH The application describing the proposal is in plain English. However, the application itself is based on technical actuarial principles.

TEXT AND INITIAL STATEMENT OF REASONS The Department has prepared an Initial Statement of Reasons addressing the proposed rate application in ad- dition to the Informative Digest included in this notice. The Initial Statement of Reasons, Notice of Proposed Action and Regulation Text are available for inspection or copying, and will be provided at no charge upon re- quest to the contact person listed above. Further details on CAARP’s proposal are on file with the Commission- er and available for review as set forth below.

FINAL STATEMENT OF REASONS A Final Statement of Reasons will be prepared at the conclusion of this proceeding. Upon written or e−mail request to the contact person listed above, the Final Statement of Reasons will be made available for inspec- tion and copying once it has been prepared. A copy of the Final Statement of Reasons will also be posted on the Department’s website.

ACCESS TO RULEMAKING FILE Any interested person may inspect a copy of or direct questions about CAARP’s application, the statement of reasons, and any supplemental information contained in the rulemaking file by contacting the contact person listed above. By prior appointment, the rulemaking file is available for inspection at 45 Fremont Street, 21 st Floor, San Francisco, California 94105, between the hours of 9:00 a.m. and 4:30 p.m. Monday through Friday. AUTOMATIC MAILING A copy of this Notice, including the Informative Di- gest, is being sent to all persons on the Insurance Com- missioner’s mailing list.

A V AILABILITY OF DOCUMENTS ON THE INTERNET The Initial Statement of Reasons, proposed text, and this Notice of Proposed Action will be published online and may be accessed through the Department’s website at www.insurance.ca.gov. A V AILABILITY OF MODIFIED TEXT OF REGULATIONS If the Department amends the application with changes that are sufficiently related to the original ap- plication, the Department will make the full text of the amended rates, with the changes clearly indicated, available to the public for at least 15 days before the date the Department adopts the amended rates. TITLE 10.

DEPARTMENT OF INSURANCE REG−2019−00007 NOTICE OF PROPOSED ACTION AND NOTICE OF PUBLIC HEARING REVISIONS TO CALIFORNIA LOW COST AUTOMOBILE PLAN OF OPERATIONS SUBJECT OF HEARING California Insurance Commissioner Dave Jones will hold a public hearing to address the proposed amend- ments to the California Low Cost Automobile (“CLCA”) Plan of Operations. AUTHORITY TO ADOPT RULES AND PROCEDURES AND REFERENCE The Commissioner will consider the proposed changes pursuant to the authority vested in him by Sec- tion 11620 of the California Insurance Code.

The Com- missioner’s decision on the proposed changes will im- plement, interpret, or make specific the requirements of Insurance Code

Section 11624(e). Insurance Code Sec- tion 11620(

c) applies to this proceeding.

CALIFORNIA REGULATORY NOTICE REGISTER 2019, VOLUME NO. 10-Z 375 HEARING DATE AND LOCATION Notice is hereby given that a public hearing will be held to permit all interested persons the opportunity to present statements or arguments, orally or in writing, with respect to the proposed changes at the following date, time, and place: Date: May 7, 2019 Time: 1:00 p.m. Place: Department of Insurance Hearing Room 300 South Spring Street Los Angeles, CA 90013 The hearing will continue on the date noted above until all testimony has been submitted or until 5:00 p.m., whichever is earlier.

ACCESS TO HEARING ROOM The facilities to be used for the public hearing are ac- cessible to persons with mobility impairments. Persons with sight or hearing impairments are requested to noti- fy the contact person (listed below) for this hearing in order to make special arrangements, if necessary. WRITTEN AND/OR ORAL COMMENTS: AGENCY CONTACT PERSON All persons are invited to submit written comments to the Insurance Commissioner on the application prior to the public comment deadline.

Comments should be ad- dressed to the contact person for this proceeding: Contact Person: Michael Riordan, Attorney California Department of Insurance Rate Enforcement Bureau 45 Fremont Street, 21st Floor San Francisco, CA 94105 riordanm@insurance.ca.gov Telephone: (415) 538−4226 Facsimile: (415) 904−5490 The backup agency contact person for this proceed- ing will be: Emily Gallagher, Attorney California Department of Insurance Rate Enforcement Bureau 45 Fremont Street, 21st Floor San Francisco, CA 94105 gallaghere@insurance.ca.gov Telephone: (415) 538−4108 All persons are invited to present oral and/or written testimony at the scheduled public hearing.

DEADLINE FOR WRITTEN COMMENTS All written materials, unless submitted at the hearing, must be received by the Insurance Commissioner at the address listed above no later than 5:00 p.m. on May 7, 2019. Any written materials received after that time will not be considered. Written comments may also be sub- mitted to the contact person by e−mail or facsimile transmission. Please select only one method to submit written comments.

ADVOCACY OR WITNESS FEES Persons or groups representing the interest of con- sumers may be entitled to reasonable advocacy fees, witness fees, and other reasonable expenses, in accor- dance with the provisions of California Code of Regula- tions, Title 10, Sections 2662.1−2662.6 in connection with their participation in this matter. Interested persons must submit a Petition to Participate, as specified in California Code of Regulations, Title 10,

Section 2661.4. The Petition to Participate must be submitted to the Commissioner at the Office of the Public Advisor at the following address: California Department of Insurance Office of the Public Advisor 300 Spring Street, 12th Floor Los Angeles, CA 90013 Telephone: (213) 346−6635 A copy of the Petition to Participate must also be sub- mitted to the contact person for this hearing (listed above). For further information, please contact the Of- fice of the Public Advisor. INFORMATIVE DIGEST/POLICY STATEMENT OVERVIEW LC 19−01 Current Plan rules need to revise the Named Driver Endorsement to clarify that individuals who are 16 to 18 years of age are included on the

schedule to be consid- ered an insured. CAARP proposes revising the California Low Cost Named Driver Endorsement to include language clari- fying that individuals who are 16 to 18 years of age are included on the

schedule to be considered an insured. COMPARABLE FEDERAL LAW There are no comparable existing federal regulations or statutes. LOCAL MANDATE DETERMINATION The Insurance Commissioner has initially deter- mined that the proposal will not result in any new pro- gram mandates on local agencies or school districts.

CALIFORNIA REGULATORY NOTICE REGISTER 2019, VOLUME NO. 10-Z 376 MANDATES ON LOCAL AGENCIES OR SCHOOL DISTRICTS OR COSTS WHICH MUST BE REIMBURSED PURSUANT TO GOVERNMENT CODE SECTIONS 17500 THROUGH 17630 The Insurance Commissioner has initially deter- mined that the proposal will not result in any cost or sig- nificant savings to any local agency or school district for which

Part 7 (commencing with

Section 17500) of Division 4 of the Government Code would require re- imbursement, or in other nondiscretionary costs or sav- ings to local agencies. COST OR SA VINGS TO ANY STATE AGENCY; FEDERAL FUNDING The Commissioner has determined that the proposed regulation will result in no cost or savings to any state agency and no cost or savings in federal funding to the state.

SIGNIFICANT STATEWIDE ADVERSE ECONOMIC IMPACT ON BUSINESSES AND THE ABILITY OF CALIFORNIA BUSINESSES TO COMPETE The Commissioner has initially determined that the proposal will not have a significant statewide adverse economic impact directly affecting businesses, includ- ing the ability of California businesses to compete with businesses in other states. This proposal will have no ef- fect on the creation or elimination of jobs in California, the creation of new businesses, the elimination of exist- ing businesses in California, or the expansion of busi- nesses in California.

COST IMPACT ON PRIV ATE PERSONS OR ENTITIES The Insurance Commissioner has initially deter- mined that the proposal will not affect private person or entities. IMPACT ON HOUSING COSTS The Insurance Commissioner has initially deter- mined that the proposal will not affect housing costs. IMPACT ON SMALL BUSINESS The Insurance Commissioner has initially deter- mined that the proposal will not affect small business. SPECIFIC TECHNOLOGIES OR EQUIPMENT The Insurance Commissioner has initially deter- mined that specific technologies or equipment will be needed.

ALTERNATIVES The Insurance Commissioner must determine that no reasonable alternative considered by the agency, or that has otherwise been identified and brought to the atten- tion of the agency, would be more effective in carrying out the purpose for which the action is proposed or would be as effective as and less burdensome to affect- ed private persons than the proposed action. PLAIN ENGLISH The proposed changes describing CAARP’s propos- als are in plain English.

TEXT AND INITIAL STATEMENT OF REASONS The Department has prepared an Initial Statement of Reasons addressing the proposed amendments in addi- tion to the Informative Digest included in this notice. The Initial Statement of Reasons, Notice of Proposed Action and Text of Regulations are available for inspec- tion or copying, and will be provided at no charge upon request to the contact person listed above. Further de- tails on CAARP’s proposal are on file with the Commis- sioner and available for review as set forth below.

FINAL STATEMENT OF REASONS A Final Statement of Reasons will be prepared at the conclusion of this proceeding. Upon written or e−mail request to the contact person listed above, the Final Statement of Reasons will be made available for inspec- tion and copying once it has been prepared. A copy of the Final Statement of Reasons will also be posted on the Department’s web site.

ACCESS TO RULEMAKING FILE Any interested person may inspect a copy of or direct questions about CAARP’s proposed amendments, the statement of reasons, and any supplemental informa- tion contained in the rulemaking file by contacting the contact person listed above. By prior appointment, the rulemaking file is available for inspection at 45 Fre- mont Street, 21 st Floor, San Francisco, California 94105, between the hours of 9:00 a.m. and 4:30 p.m. Monday through Friday.

CALIFORNIA REGULATORY NOTICE REGISTER 2019, VOLUME NO. 10-Z 377 AUTOMATIC MAILING A copy of this Notice, including the Informative Di- gest, is being sent to all persons on the Insurance Com- missioner’s mailing list. A V AILABILITY OF DOCUMENTS ON THE INTERNET The Initial Statement of Reasons, proposed text, and this Notice of Proposed Action will be published online and may be accessed through the Department’s website at www.insurance.ca.gov.

A V AILABILITY OF MODIFIED TEXT OF REGULATIONS If the Department amends the proposed regulations with changes that are sufficiently related to the original text, the Department will make the full text of the amended regulations, with the changes clearly indicat- ed, available to the public for at least 15 days before the date the Department adopts the amended regulations. TITLE 13.

AIR RESOURCES BOARD NOTICE OF PUBLIC HEARING TO CONSIDER PROPOSED AMENDMENTS TO THE RED STICKER PROGRAM FOR OFF−HIGHWAY RECREATIONAL VEHICLES The California Air Resources Board (CARB or Board) will conduct a public hearing at the time and place noted below to consider approving for adoption the proposed amendments for the red sticker program for off−highway recreational vehicles. DATE: April 25, 2019 TIME: 9:00 a.m.

LOCATION: California Environmental Protection Agency California Air Resources Board Byron Sher Auditorium 1001 I Street Sacramento, California 95814 This item will be considered at a meeting of the Board, which will commence at 9:00 a.m., April 25, 2019, and may continue at 8:30 a.m., on April 26, 2019. Please consult the agenda for the hearing, which will be available at least ten days before April 25, 2019, to de- termine the day on which this item will be considered.

WRITTEN COMMENT PERIOD AND SUBMITTAL OF COMMENTS Interested members of the public may present com- ments orally or in writing at the hearing and may pro- vide comments by postal mail or by electronic submittal before the hearing. The public comment period for this regulatory action will begin on March 8, 2019. Written comments not physically submitted at the hearing must be submitted on or after March 8, 2019, and received no later than 5:00 p.m. on April 22, 2019.

CARB re- quests that when possible, written and email statements be filed at least ten days before the hearing to give CARB staff and Board members additional time to con- sider each comment. The Board also encourages mem- bers of the public to bring to the attention of staff in ad- vance of the hearing any suggestions for modification of the proposed regulatory action.

Comments submitted in advance of the hearing must be addressed to one of the following: Postal mail: Clerk of the Board, California Air Resources Board 1001 I Street, Sacramento, California 95814 Electronic submittal: http://www.arb.ca.gov/lispub/comm/bclist.php Please note that under the California Public Records Act (Gov. Code, § 6250 et seq.), your written and oral comments, attachments, and associated contact infor- mation (e.g., your address, phone, email, etc.) become part of the public record and can be released to the pub- lic upon request.

Additionally, the Board requests but does not require that persons who submit written comments to the Board reference the title of the proposal in their comments to facilitate review. AUTHORITY AND REFERENCE This regulatory action is proposed under the authority granted in Health and Safety Code, sections 39600, 39601, 43013, 43018, 43101, 43105, 43107, 43205.5, 43210, and 43824; and Vehicle Code sections 38020 and 38390.

This action is proposed to implement, inter- pret, and make specific Health and Safety Code sections 43013, 43018, 43101, 43102, 43104, 43105, 43106, 43107, 43204, 43205, 43205.5, 43210, and 43824.

CALIFORNIA REGULATORY NOTICE REGISTER 2019, VOLUME NO. 10-Z 378 • • • • • • • • INFORMATIVE DIGEST OF PROPOSED ACTION AND POLICY STATEMENT OVERVIEW (GOV . CODE, § 11346.5, subd. (a)(3)) Sections Affected: Proposed amendments to California Code of Regulations, title 13, sections 2411, 2412, 2415, 2416, 2418, and 2419.4.

Background and Effect of the Proposed Regulatory Action: While significant reductions in harmful emissions from vehicles have occurred in recent years, California needs additional reductions of reactive organic gases (ROG) and oxides of nitrogen (NOx) emissions to achieve attainment of the ozone standard in all areas of the state. Mobile sources have historically been the largest source of ROG and NOx emissions in Califor- nia.

As on−road mobile sources have become progres- sively cleaner, the emissions contribution from off− road sources, as well as mobile sources under federal and international jurisdiction (e.g., ships, locomotives, and aircraft) has become more prominent. One signifi- cant source of ROG in California is off−highway recre- ational vehicles (OHRV), which includes all−terrain vehicles, off−road motorcycles, and specialty off− highway vehicles. CARB adopted the first emissions control regulations for OHRV in 1994. These regulations went into effect starting in 1997 and were technology forcing.

To com- ply, the OHRV industry had to shift from predominantly high−emitting two−stroke engines to cleaner four− stroke engines. As the 1997 effective date approached, OHRV dealers and manufacturers expressed concern that there was not an adequate range of certified models available. To address this concern, CARB adopted the red sticker program in 1998. The red sticker program al- lows for the certification and sale of high−emitting OHRV with no emissions controls. The red sticker pro- gram was envisioned as a temporary program to allow additional time for the OHRV industry to develop cleaner engines.

To mitigate emissions from these vehi- cles, their use is restricted on public lands during the summer months in areas where ozone levels exceed federal standards. CARB amended California’s OHRV regulations in 2006 and 2013 to require increasingly stringent control of evaporative emissions from OHRV . Vehicles certi- fied under the red sticker program remained exempt from evaporative control requirements. Now, more than 20 years after the red sticker program was adopted, cleaner engine technology is readily available.

Howev- er, more than half of all off−highway motorcycles sold in California are red sticker models with no emissions controls. CARB staff has found that the red sticker pro- gram’s seasonal riding restrictions do not significantly reduce emissions and that the program does not address evaporative emissions that occur during vehicle stor- age, which comprise the majority of emissions from OHRV .

To attain the 8−hour federal ambient air quality stan- dard for ozone, which is both more challenging and more protective of public health than the previous stan- dard, it is necessary to incorporate expanded off−road mobile source emissions control into California’s State Strategy for the State Implementation Plan (SIP). In March 2017, the Board adopted amendments to the State Strategy, which comprises state and local air qual- ity planning documents showing how and when Cali- fornia will meet ambient air quality standards (AAQS).

The Revised Proposed 2016 State Strategy for SIP de- scribes proposed commitments to achieve necessary re- ductions from CARB categories, including mobile sources, through a series of regulatory programs to meet federal air quality standards. Measures in the 2016 State Strategy include the fur- ther deployment of cleaner technologies for off−road vehicles. The proposed regulatory amendments carry out the State Strategy by ending the red sticker program and therefore ending certification of OHRV with no emissions controls starting in 2022.

The proposed amendments are projected to reduce ROG and NOx emissions by approximately six tons per day statewide, including ozone nonattainment areas throughout Cali- fornia. Proposed Regulatory Action: In

summary, staff proposes the following: End the red sticker certification program for OHRV beginning in model year 2022; Lift the seasonal riding restrictions on existing red sticker OHRV starting on January 1, 2025; Harmonize with U.S. EPA evaporative standards for off−highway motorcycles of model years 2020 through 2026; Harmonize with U.S.

EPA exhaust standards for off−highway motorcycles from 2022 through 2027; Establish cost−effective alternative requirements for controlling evaporative emissions from OHRV starting in 2020; Set more stringent exhaust emission control standards for ATV , off−road sport vehicles, and off−road utility vehicles from 2022; Amend the current emissions fleet averaging and zero emission vehicle credit provisions to provide manufacturers with flexible compliance pathways and accelerate development of zero emission OHRV; and Adopt more stringent California−specific emissions standards for new OHRV starting with

CALIFORNIA REGULATORY NOTICE REGISTER 2019, VOLUME NO. 10-Z 379 the 2027/28 model year to reduce emissions and help achieve California’s air quality goals. Objectives and Benefits of the Proposed Regulatory Action: The purpose of the proposed amendments is to reduce exhaust and evaporative emissions from OHRV . The proposal focuses on the highest emitting OHRV mod- els. Specifically, the proposed amendments would end certification and thus sales of new red sticker models in the 2022 model year.

Thereafter, all OHRV must be cer- tified as meeting emissions standards or sold and used exclusively for competition use. From 2020 through 2026, California’s evaporative standards for off− highway motorcycles (OHMCs) and all−terrain vehi- cles (A TVs) will be identical to U.S. EPA standards. To help California’s OHRV dealers and manufacturers comply with these requirements, the proposal includes alternative evaporative emissions standards for OHMCs and ATVs from 2020 through 2026. Beginning in model year 2022, California’s exhaust standards for OHMCs and ATVs will be at least as stringent as the U.S.

EPA standards. Exhaust standards for ATVs, off− road sport vehicles, and off−road utility vehicles will slowly become more stringent until 2027. Exhaust stan- dards for OHMCs will remain identical to U.S. EPA standards until 2027. After the 2020 through 2027 tran- sitional period, all OHRV will be subject to California− specific standards (green sticker) that are more strin- gent than federal standards but are technically feasible and provide cost−effective emissions reductions.

Staff has worked with OHMC manufacturers to provide suf- ficient time and certification flexibility to allow com- pliance with limited disruptions to the market. Staff held multiple public workshops with stakehold- ers during the regulation development process and pre- sented updates to the California State Parks Off− Highway Motor Vehicle Recreation Commission throughout the rule development process. The proposed regulatory action was developed with input from OHRV manufacturers to ensure that the proposal achieves cost−effective emission reductions without creating an unnecessary burden on industry.

Based on internal CARB emissions testing and an industry−wide cost survey, staff determined that this proposal will significantly reduce emissions from OHRV starting in 2022 and will be cost−effective rela- tive to other mobile source regulations. Furthermore, the adoption of the proposed amendments will harmo- nize CARB’s OHRV certification requirements with the U.S. EPA OHRV program that requires certification of compliant vehicles and provides an exemption for competition vehicles.

ATVs and other specialty vehi- cles are mostly compliant with existing emissions con- trols and ATV manufacturers stated they anticipate no additional costs to meet the more stringent proposed ex- haust standards. This proposal will require the transfer of proven evaporative and exhaust emissions control technolo- gies from other vehicle categories to OHRV . The pro- posed amendments provide sufficient flexibility and time to allow OHRV manufacturers to incorporate vari- ous emissions control technologies and comply with applicable standards, reduce OHRV emissions, and help meet California’s air quality goals.

The proposed regulatory action will deliver signifi- cant emission reduction benefits well into the future. Staff project a more than 50 percent reduction in Cali- fornia’s statewide OHRV emissions in 2040 as com- pared to 2020. A slight increase in summertime emis- sions is expected in 2025 when seasonal riding restric- tions are lifted for existing red sticker OHRV . However, this increase is more than offset by the reductions pro- vided by the regulation from 2022 through 2024. Most of these reductions will be achieved by ending certifica- tion of the highest emitting OHRV starting in 2022.

Fur- ther reductions will be achieved by gradually imple- menting tighter evaporative and exhaust standards in subsequent years, and as users’ existing red sticker ve- hicles wear out, break down, and are taken out of active use. The fleet emissions averaging provisions will pro- vide manufacturers with flexibility to apply controls where they are most beneficial and cost effective, while enhancements to OHRV advanced fuel system credits will encourage the expansion of zero emission vehicle technology into the off−road sector to achieve addition- al future emissions reductions.

Fleet averaging will be a valuable means for manufacturers to transition their currently uncontrolled vehicles to meeting applicable emissions standards. The proposed changes enhance the current fleet averaging and zero emission provi- sions, further helping to encourage manufacturers to develop and market zero emissions OHRV and to en- sure a wide range of certified OHRV once the certifica- tion of new red sticker vehicles ends in 2022.

The expected emission reductions associated with the proposed regulation will result in indirect benefits to the health and welfare of California residents and the State’s environment. The proposed amendments woul