GAVIN NEWSOM, GOVERNOR OFFICE OF ADMINISTRATIVE LAW California Regulatory Notice Register REGISTER 2021, NUMBER 38-Z P UBLISHED WEEKLY BY THE OFFICE OF ADMINISTRATIVE LAW S EPTEMBER 17, 2021 PROPOSED ACTION ON REGULATIONS TITLE 2. F AIR POLITICAL PRACTICES COMMISSION Conflict–of–Interest Code — Notice File Number Z2021–0907–05 ........................................ 1271 AMENDMENTS MUL TI – COUNTY: Scholarship Prep ST ATE AGENCY: Health and Human Services Agency TITLE 2.

F AIR POLITICAL PRACTICES COMMISSION Behested Payment Reporting — Notice File Number Z2021–0907–02. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1272 TITLE 4. SCHOOL FINANCE AUTHORITY Charter School Facilities Program — Succession — Notice File Number Z2021–0903–02 ..................... 1273 TITLE 4. SCHOOL FINANCE AUTHORITY Charter School Revolving Loan Program — Notice File Number Z2021–0902–04 ............................ 1278 TITLE 4. GAMBLING CONTROL COMMISSION AB 120 Hearings Update — Notice File Number Z2021–0907–03 ........................................ 1280 TITLE 13.

HIGHW AY PATROL Explosives Route — Map 12 — Notice File Number Z2021–0901–01 ...................................... 1288 TITLE 15. PRISON INDUSTRY AUTHORITY Conflict–of–Interest Code — Notice File Number Z2021–0902–02 ........................................ 1290 TITLE 16. BOARD OF PHARMACY Wholesaler/3PL Self–Assessment Form — Notice File Number Z2021–0902–05 ............................. 1291 TITLE 16. BOARD OF PHARMACY Inventory Reconciliation — Notice File Number Z2021–0907–01 ......................................... 1294 (Continued on next page) Time- Dated Material

TITLE 18. DEPAR TMENT OF TAX AND FEE ADMINISTRATION Newspapers and Periodicals — Notice File Number Z2021–0903–01 ...................................... 1296 TITLE 28.

DEPAR TMENT OF MANAGED HEALTH CARE Transfer of Enrollees Pursuant to a Public Order — Notice File Number Z2021–0902–01 ..................... 1298 GENERAL PUBLIC INTEREST AIR RESOURCES BOARD Hearing change re: Transport Refrigeration Units Airborne Toxic Control Measures Amendments ............................................................................. 1303 DEPARTMENT OF FISH AND WILDLIFE Request for Consistency Determination, No. 1653–2021–078–001–R1, Round Valley Meadow Restoration Project, Tehama County ............................................. 1304 DEPARTMENT OF FISH AND WILDLIFE Consistency Determination Request for Lost River Road Upgrade Project, Tracking Number 1653–2021–080–001–R1, Mendocino County ......................................... 1306 PROPOSITION 65 OFFICE OF ENVIRONMENTAL HEALTH HAZARD ASSESSMENT Proposition 65 Warnings — Cannabis 15–Day Modification, Cannabis Smoke and Delta–9–Tetrahydrocannabinol (Delta–9–THC) Exposure Warnings ...................................... 1306 ACCEPTANCE OF PETITION TO REVIEW ALLEGED UNDERGROUND REGULATIONS OFFICE OF ADMINISTRATIVE LAW Granting of Favorable Points for No Serious Disciplinary Action(

s) on Classification Scoresheets .............. 1307

SUMMARY OF REGULATORY ACTIONS Regulations filed with Secretary of State ............................................................. 1308 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 REGULATORY NOTICE REGISTER is published weekly by the Office of Administrative Law, 300 Capitol Mall, Suite 1250, Sacramento, CA 95814-4339. The Register is printed by Barclays, a subsidiary of West, a Thomson Reuters Business, and is offered by subscription for $205.00 (annual price). To order or make changes to current subscriptions, please call (800) 328−4880. The Register can also be accessed at http://www.oal.ca.gov.

CALIFORNIA REGULATORY NOTICE REGISTER 2021, VOLUME NUMBER 38-Z 1271 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 Government 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: Scholarship Prep State Agency: Health and Human Services Agency A written comment period has been established commencing on September 17, 2021 and closing on November 1, 2021.

Written comments should be directed to the Fair Political Practices Commission, Attention Daniel Vo, 1102 Q Street, Suite 3000, Sacramento, California 95811. At the end of the 45–day comment period, the proposed conflict–of–interest code(

s) will be submitted to the Commission’s Executive Director for his review, unless any interested person or his or her duly authorized 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 review the above–referenced conflict–of–interest code(s), proposed pursuant to Government Code

Section 87300, which designate, pursuant to Government Code

Section 87302, employees who must disclose certain investments, interests in real property and income. The Executive Director of the Commission, upon his or its own motion or at the request of any interested person, 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, arguments or comments, in writing to the Executive Director of the Commission, relative to review of the proposed conflict–of–interest code(s). Any written comments must be received no later than November 1, 2021. If a public hearing is to be held, oral comments may be presented to the Commission at the hearing.

COST TO LOCAL AGENCIES There shall be no reimbursement for any new or increased costs to local government which may re- sult 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 Government 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 Daniel Vo, Fair Political Practices Commission, 1102 Q Street, Suite 3000, Sacramento, California 95811, telephone (916) 322–5660. AVAILABILITY OF PROPOSED CONFLICT–OF–INTEREST CODES Copies of the proposed conflict–of–interest codes may be obtained from the Commission offices or the respective agency. Requests for copies from

CALIFORNIA REGULATORY NOTICE REGISTER 2021, VOLUME NUMBER 38-Z 1272 the Commission should be made to Daniel Vo, Fair Political Practices Commission, 1102 Q Street, Suite 3000, Sacramento, California 95811, telephone (916) 322–5660. TITLE 2. F AIR POLITICAL PRACTICES COMMISSION NOTICE IS HEREBY GIVEN that the Fair Political Practices Commission (the Commission), under the au- thority vested in it under 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 regulations at a public hearing on or after October 21, 2021, at the offices of the Fair Political Practices Commission, 1102 Q Street, Suite 3000, Sacramento, California, commencing at approximately 10:00 a.m. Written comments should be received at the Commission of- fices no later than 5:00 p.m. on October 20, 2021. BACKGROUND/OVERVIEW The proposed regulation pertains to the Act’s

Section 84224 behested payment reporting require- ments applicable to an elected officer or Public Utilities Commission member (hereinafter referred to collec- tively as “official”) when a payment involves a donor advised fund. The purpose of the behested payment reporting requirements is to capture payments that are not contributions or clear gifts to officials but are pay- ments in which the public would have an interest given the official’s role in the exchange.

Section 84224 imposes reporting requirements on behesting officials for payments that satisfy each of the following requirements:

(1) The payment is made at the behest of the official;

(2) The behesting official does not provide full and adequate consideration in exchange for the payment;

(3) The payment is made principally for a legislative, governmental, or charita- ble purpose; and

(4) If made principally for a legisla- tive or governmental purpose, the payment is made by a person other than a state, local, or federal govern- mental agency. (Section 84224(b).) A behested payment that meets the above descrip- tion must be reported and filed with the official’s agen- cy within 30 days following the date on which the payment or payments equal or exceed $5,000 in the aggregate from the same source in the same calendar 1 T he Political Reform Act is contained in Government Code Sections 81000 through 91014. All statutory references are to the Government Code, unless otherwise indicated.

The regulations of the Fair Political Practices Commission are contained in Sec- tions 18110 through 18998 of Title 2 of the California Code of Regulations. All regulatory references are to Title 2, Division 6 of the California Code of Regulations, unless otherwise indicated. year in which they are made. (See

Section 84224(a).) The report must include: “name of payor; address of payor; amount of the payment or payments; date or dates the payment or payments were made; the name and address of the payee; a brief description of the goods or services provided or purchased, if any; and a description of the specific purpose or event for which the payment or payments were made.” (Emphasis add- ed.) Once the reporting threshold is met, all additional payments made by the single source in the calendar year must be reported within 30 days after the pay- ment was made.

The statute does not define key terms, however, including “payor” or “single source.” Donor Advised Funds A donor advised fund (“DAF”) is a charitable giv- ing mechanism, where separately identified funds are maintained and operated by a

section 501(c)(3) organi- zation called a sponsoring organization. Each account is composed of contributions made by individual do- nors. Once the donor makes the contribution, the spon- soring organization has legal control over it. However, the donor, or the donor’s representative retains adviso- ry privileges with respect to the distribution of funds and the investment of the assets in the account. (See “Donor–Advised Funds | Internal Revenue Service” (irs.gov ).

See also, 26 USCS § 4 966, defining “donor advised fund” and “sponsoring organization.”) Under this structure, when an official reports a be- hested payment that comes from a DAF the sponsor- ing organization has written the check for payment from the donor’s DAF at the request of the donor. A donor may select to have a particular DAF payment be anonymous or may name the DAF in a manner that does not disclose the donor’s name.

The sponsoring organization sends notice to the payee charitable or- ganization that the payment is made from a DAF and, at the discretion of the donor, may or may not disclose the name of the DAF and name of the donor. Because the payment is made at the discretion of the donor, merely reporting the sponsoring organization as the “name of the payor” would not disclose the donor’s role in directing the payment. REGULATORY ACTION The Commission will consider regulatory action addressing the reporting of a DAF behested payment.

At the request of the Commission, staff has prepared draft regulatory language defining a “payor” and a “single source” in the context of a DAF behested pay- ment so that meaningful disclosure is provided to the public, and to provide additional guidance to report- ing officials. The Commission will consider proposed Regulation 18424.3 and may consider any related amendments to address the reporting of a DAF be- hested payment.

CALIFORNIA REGULATORY NOTICE REGISTER 2021, VOLUME NUMBER 38-Z 1273 Adopt 2 Cal. Code Regs.

Section 18424.3 Behested Payment Reporting. Donor Advised Fund. The Commission will consider the adoption of pro- posed Regulation 18424.3 to address reporting a be- hested payment from a DAF. As proposed, Regulation 18424.3: ● Requires the official to report the name of the sponsoring organization, the name of the donor advised fund, and the name of the donor, to the extent this information is known to the official.

Where there is more than one donor, the name of the donor, or donors, who exercised advisory privileges over the DAF for this payment is provided. ● Places the duty on the official to identify and report the above information with as much specificity as the official knows or can determine by inquiring with the sponsoring organization.

If the official learns the identity of the donor or DAF with greater specificity after the report filing date, the official has a duty to amend the behested payment report with the information within 10 days of the official receiving the additional information. ● Clarifies how to identify the “single source” of a DAF payment, to determine the $5,000 threshold triggering a behested payment report, and any subsequent reporting requirements including instances in which there are multiple donors, or the sponsoring organization withholds the identity of the donor or DAF. ● Defines the terms “sponsoring organization,” “donor advised fund,” and “donor.” The proposed language provides for the meaningful disclosure of the parties involved in a behested pay- ment transaction, while limiting the reporting require- ments to payor information the official either knows or can determine by inquiring with the sponsoring orga- nization.

The proposed language places a duty on the official to promptly amend the report within 10 days of learning the specific identity of the donor or the do- nor advised fund. The language balances prompt, in- formative, and accurate public disclosure of behested payments by officials with the need to not discourage the important public service that these payments can provide, and the anonymity afforded such donors. SCOPE: The Commission may adopt the language noticed herein, or it may choose new language to implement its decisions concerning the issue identified above or any related issue.

FISCAL IMPACT STATEMENT Fiscal Impact on Local Government. None. Fiscal Impact on State Government. None. Fiscal Impact on Federal Funding of State Programs. None. AUTHORITY

Section 83112 provides that the Fair Political Practices Commission may adopt, amend, and rescind rules and regulations to carry out the purposes and provisions of the Act. REFERENCE The purpose of these regulations is to clarify and implement

Section 84224. CONTACT Any inquiries should be made to L. Karen Harrison, Fair Political Practices Commission, 1102 Q Street, Suite 3000, Sacramento, CA 95811; email KHarrison@fppc.ca.gov. 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.

SCHOOL FINANCE AUTHORITY THE CALIFORNIA SCHOOL FINANCE AUTHORITY PROPOSES TO AMEND REGULATION SECTIONS 10152 THROUGH 10157, TITLE 4, CALIFORNIA CODE OF REGULATIONS, RELATING TO THE CHARTER SCHOOL FACILITIES PROGRAM REGULATION SECTIONS PROPOSED FOR AMENDMENTS: ● 10152 ● 10153 ● 10154 ● 10155 ● 10156 ● 10157 NOTICE IS HEREBY GIVEN that the California School Finance Authority (Authority) proposes to amend the above–referenced regulation sections, contained in Title 4, California Code of Regulations (CCR). A public hearing is not scheduled.

A public hearing will be held if any interested person, or his or her duly authorized representative, submits a request for a public hearing to the contact person listed below no later than 15 days prior to the close of the written comment period. Following the public hearing, if one

CALIFORNIA REGULATORY NOTICE REGISTER 2021, VOLUME NUMBER 38-Z 1274 is requested, or following the written comment period if no public hearing is requested, the California School Finance Authority Board, upon its own motion or at the instance of any interested party, may thereafter adopt the proposals substantially as described below without further notice. AUTHORITY AND REFERENCE CITATIONS The Authority proposes to amend the above– references regulation sections under the authority provided by Sections 17078.57, 17179, 17180, and 17180.5 of the Education Code. The proposal interprets and makes specific reference to

Section 17078.62 of the Education Code. INFORMATIVE DIGEST/POLICY OVERVIEW STATEMENT The Leroy F. Greene School Facilities Act of 1998 established, through Senate Bill 50,

Chapter 407, Statutes of 1998, the School Facility Program (SFP). The SFP provides a per–pupil grant amount to qualifying school districts for purposes of constructing school facilities and modernizing existing school facilities. The State Allocation Board (SAB) adopted regulations to implement the Leroy F. Green School Facilities Act of 1998, which were approved by the Office of Administrative Law and filed with the Secretary of State on October 8, 1999.

The Charter School Facilities Program (CSFP) was enacted in 2002 by Assembly Bill 14, and funded through four state general obligation bond measures, totaling $1.4 billion. The program was created for the purpose constructing, acquiring, or renovating facilities for high–quality, site–based charter schools throughout California. CSFP provides charter schools access to facility funding for new construction directly or through the school district where the charter school is physically located. The program is jointly administered by the Authority and the Office of Public School Construction (OPSC).

At its June 24, 2021 meeting, the California School Finance Authority Board adopted proposed regulatory amendments that would provide additional clarity on how to proceed with the selection of a successor Charter School under CSFP should a Charter School be unable to continue occupancy of its CSFP–funded facility. These amendments include notification of interested applicants and selection of a successor Charter School, while ensuring the statutory intent for providing CSFP facilities is met.

Bond Funds Impacted ● Kindergarten–University Public Education Facilities Bond Act of 2002 (Proposition 47) ● Kindergarten–University Public Education Facilities Bond Act of 2004 (Proposition 55) ● Kindergarten–University Public Education Facilities Bond Act of 2006 (Proposition 1D) ● Kindergarten through Community College Public Education Facilities Bond Act of 2016 (Proposition 51) Attached to this Notice is a copy of the regulatory language at issue, along with the text of the specific proposed regulatory amendments.

The proposed regulations can also be reviewed on the Authority’s website at https://www.treasurer.ca.gov/csfa/csfp/ public–comment.asp. Copies of the proposed regulatory amendments will be mailed to any person requesting this information from the Contact Person as set forth below in this Notice. The proposed regulations amend the CSFP Regulations under the California Code of Regulations, Title 4, Division 15,

Article 1, Sections 10152 through 10157. Background and Problem Being Resolved In the course of administering CSFP, the Authority become aware of two separate Charter Schools that are unable to continue occupancy of their CSFP– funded facilities. Education Code

Section 17078.62 allows for a successor Charter School in the event a CSFP funded Charter School no longer occupies the facility. In working through facility disposition under the existing regulatory framework, OPSC and the Authority determined that regulations are necessary to provide clear and specific guidance to districts and interested successor Charter Schools concerning the process of selecting a successor Charter School in such instances. OPSC and the Authority held two virtual joint public stakeholder meetings: one on February 25, 2021, and one on May 26, 2021, to discuss the proposed amendments.

Stakeholders provided feedback regarding the proposed amendments at the February meeting. The comments were discussed at the May meeting. No additional comments were received following the May meeting. Anticipated Benefits of the Proposed Regulations The proposed amendments were drafted to provide a clear, transparent process and consistent guidance in the event a CSFP recipient Charter School is unable to continue occupancy of a CSFP–funded facility. The proposed changes are also necessary to provide clarity and internal consistency to the regulations as a whole.

Charter Schools and School Districts will benefit from a more predictable and standardized process. The State of California will benefit because the State’s investment will be maintained; a CSFP– funded facility will continue to operate once a successor Charter School has been selected. The proposed amendments are not anticipated to have a

CALIFORNIA REGULATORY NOTICE REGISTER 2021, VOLUME NUMBER 38-Z 1275 direct impact on the State’s economy or job creation because the successor Charter School will take over the facility on equal terms as the original occupant. The Authority has conducted an evaluation as to whether there are any related regulations on this matter and has found that these are the only regulations dealing with this type of hybrid grant/loan program. Therefore, the proposed regulations do not present any inconsistencies or incompatibilities with existing State laws or regulations. Proceeding with the proposed regulatory amendments aligns with the statute and carries out the will of the voters.

Summary of the Proposed Regulatory Amendments Pursuant to its authority to promulgate rules and regulations under

Section 17179 and 17180 of the Education Code, the Authority proposes to amend sections 10152 through 10157 of Title 4, Division 15 to the California Code of Regulations to accomplish the following objectives: ● Provide an overview of the successor notification and selection process: ○ Identify the entity responsible for notifying interested charter schools of an available facility; ○ Indicate what charter schools should be notified; ○ Provide the minimum requirements to be considered a successor charter school; ○ Provide examples of allowable district requirements to qualify as a successor charter school; ○ Identify state preference points that must be used if more than one charter school applies to be a successor charter school; ○ Provide examples of allowable district preference points that may be used if more than one charter school applies to be a successor charter school; and ● Clarify language and internal consistency throughout the regulations.

Statutory Authority and Implementation Under authority established in California Education Code sections 17179 and 17180, the Authority may adopt rules and regulations to carry out its responsibility of assisting school districts and community college districts with financing for school projects that may consist of the following elements; acquire, construct, enlarge, remodel, renovate, alter, improve, furnish, equip, own, maintain, manage, repair, operate, lease as lessee or lessor an educational facility to be financed or refinanced under

chapter 18 of the Education Code. All programs administered by the Authority refer to charter schools as established pursuant to Education Code

section 4700 et seq., the Charter Schools Act of 1992. Determination of Inconsistency or Incompatibility with Existing State Regulations SFP Regulation

Section 1859.17, passed under the authority of Education Code

Section 17078.62, allows for a successor Charter School in the event a CSFP recipient Charter School no longer occupies a CSFP–funded facility. Neither this regulation nor the Education Code provides specificity concerning the process whereby Charter Schools are notified of the availability of such facilities nor selected as successor Charter School, nor do the regulations clearly indicate what entity is responsible for this process.

After review, the Authority has concluded that these are the only regulations in this subject area and that the proposed amendments are therefore neither inconsistent nor incompatible with existing State laws and regulations. The proposed amendments are within the Authority’s enact regulations for CSFP under Education Code

Section 17179 and 17180. IMPACT ON LOCAL AGENCIES OR SCHOOL DISTRICTS The Authority has determined that the proposed regulatory amendments do not impose a mandate or a mandate requiring reimbursement by the State pursuant to

Part 7 (commencing with

Section 17500) of Division 4 or the Government Code. It will not require local agencies, school districts, or charter schools to incur additional costs in order to comply with the proposed regulatory amendments.

DISCLOSURES REGARDING THE PROPOSED REGULATORY ACTION The Authority has made the following initial determinations relative to the required statutory categories: ● The Authority has made an initial determination that there will be no significant, statewide, adverse economic impact directly affecting business, including the ability of California businesses to compete with businesses in other states. ● The Authority is not aware of any cost impacts that a representative private person or business would not necessarily incur in reasonable compliance with the proposed action. ● There will be no non–discretionary costs or savings to local agencies. ● The proposed regulatory amendments create no costs to any local agency, school district, or charter school requiring reimbursement pursuant to

Section 17500 et seq., or beyond those required

CALIFORNIA REGULATORY NOTICE REGISTER 2021, VOLUME NUMBER 38-Z 1276 by law, except for the required district contribution toward each project as stipulated in statute. ● There will be no costs or savings in federal funding to the State. ● The proposed regulatory amendments create no costs or savings to any State agency beyond those required by law. ● The Authority has made an initial determination that there will be no impact on housing costs.

RESULTS OF THE ECONOMIC IMPACT ANALYSIS Impact to Business and Jobs in California The proposed amendments promote transparency and consistency because the process will be clarified in regulation. This will benefit school districts and charter schools by ensuring equitability to all parties involved. The State of California will benefit because the State’s investment will be maintained as the CSFP–funded facility will continue to operate once a successor Charter School is installed.

The proposed amendments do not have a direct impact on the State’s economy or job creation because the successor Charter School will take over the facility on equal terms as the original occupant. Proceeding with the implementation of the proposed amendments align with statute and carries out the will of the voters. The proposed amendments do not have an impact on he creation or elimination of jobs within California. It does not have an impact on the creation of new businesses or elimination of existing businesses within California.

Nor will the proposal have an impact on the expansion of businesses currently doing business within the state. Benefits to Public Health and Welfare, Worker’s Safety, and the State’s Environment ● The proposed amendments promote transparency and consistency because the process will be clarified in regulation. This will benefit school districts and charter schools by ensuring equitability to all parties involved. The State of California will benefit because the State’s investment will be maintained as the CSFP– funded facility will continue to operate once a successor Charter School is installed.

The proposed amendments do not have a direct impact on the State’s economy or job creation because the successor Charter School will take over the facility on equal terms as the original occupant. ● There are continued benefits to the health and welfare of California residents and worker safety.

School districts, charter schools, and local educational agencies utilize construction and trades employees to work on school construction projects and although this proposed regulation does not directly impact workers’ safety, existing law provides for the availability of a skilled labor force and encourages improved health and safety of construction and trades employees through proper apprenticeship and training.

Further public health and safety is enhanced because a properly paid and trained workforce will build school construction projects that are higher quality, structurally code–compliant, and safer for use by pupils, staff, and other occupants on the site. ● There is no impact to the State’s environment for the proposed regulatory amendments. The Authority finds the proposed regulations fully consistent with the state purposes and benefits. EFFECT ON SMALL BUSINESS The proposed regulatory amendments will not have a negative impact on small businesses in the ways identified in subsections (a)(1)–(4) of

Section 4, Title 1, CCR. Although the proposed amendments only apply to school districts, charter schools, and local education agencies for the purpose of funding school facility projects, the proposed regulatory amendments do not have a direct impact on the creation of new small businesses, or expansion of small businesses and it will not eliminate jobs or eliminate existing small businesses within California.

Further, the nature of the proposed regulatory amendments is to provide specific guidance and additional clarity that promotes transparency and consistency necessary for the process of selecting a successor Charter School. SUBMISSION OF COMMENTS, DOCUMENTS, AND ADDITIONAL INFORMATION Any interested person may present statements or arguments relevant to the proposed regulatory action in writing, submitted via U.S. mail, e–mail, or fax. Written comments, submitted via U.S. mail, e–mail, or fax must be received by the Authority no later than Monday, November 1, 2021.

The express terms of the proposed regulations as well as the Initial Statement of Reasons are available to the public. Contact Person: Written comments, submitted via U.S. mail, e– mail, or fax regarding the proposed regulatory action, requests for copy of the proposed regulatory action or the Initial Statement of Reasons, and questions concerning the substance of the proposed regulatory action should be addressed to:

CALIFORNIA REGULATORY NOTICE REGISTER 2021, VOLUME NUMBER 38-Z 1277 Katrina Johantgen, Executive Director California School Finance Authority At: 300 South Spring Street, Suite 8500 Los Angeles, CA 90013 213•620•4467 OR 915 Capitol Mall, Room 101 Sacramento, CA 95814 916•651•7710 OR to: kjohantgen@treasurer.ca.gov OR csfp@treasurer.ca.gov The following person is designated as a backup Contact Person for inquiries only regarding the Regulations: Ravinder Kapoor, Senior Attorney State Treasurer’s Office 915 Capitol Mall, Room 110 Sacramento, CA 95814 916•653•2995 Website Access: Materials regarding this proposal can be found at: https://www.treasurer.ca.gov/csfa/ csfp/public–comment.asp.

ADOPTION OF REGULATIONS Please note that, following the public comment period, the Authority may adopt the regulations substantially as proposed in this notice or with modifications that are sufficiently related to the originally proposed text and notice of proposed regulatory activity. If modifications are made, the modified text with changed clearly indicated will be made available to the public for at least 15 days prior to the date on which the Authority adopts the regulations.

The modified regulations will be made available and provided to: ● All persons who submitted written comments at the public hearing, ● all persons who submitted written comments during the public comment period, and ● all persons who requested notification from the agency of the availability of such changes. Requests for copies of any modified regulations should be addressed to the Contact Person identified above. The Authority will accept written comments on the modified regulations during the 15–day period.

SUBSTANTIAL CHANGES WILL REQUIRE A NEW NOTICE If, after receiving comments, the Authority intends to adopt the regulations with modifications not sufficiently related to the original text, the modified text will not be adopted without complying anew with the notice requirements of the Administrative Procedures Act. RULEMAKING FILE Pursuant to Government Code

Section 11347.3, the Authority is maintaining a rulemaking file for the proposed regulatory action. The file currently contains: 1. A copy of the text of the regulations for which adoption is proposed in strikeout/underline. 2. A copy of this Notice. 3. A copy of the Initial Statement of Reasons for the proposed adoption. 4. The factual information upon which the Authority is relying in proposing the adoption. As data and other factual information, studies, reports, or written comments are received they will be added to the rulemaking file.

The file is available for public inspection at the Authority during normal working hours. Please be aware that due to COVID–19, the office may not be fully staffed at all times. If you wish to inspect the documents in person, please call first. Items 1 through 3 are also available on the Authority’s Internet Website at: https://www.treasurer. ca.gov/csfa/csfp/public–comment.asp. ALTERNATIVES In accordance with Government Code

Section 11346.5(a)(13), the Authority has determined that no reasonable alternative it considered or that has otherwise has been identified and brought to its attention would be more effective in carrying out the purpose for which the action in proposed, would be as effective and less burdensome to affected private persons than the proposed action, or would be more cost–effective to affected private persons than the proposed action, or would be more cost–effective to affected private persons and equally effective in implementing the statutory policy or other provision of law.

The alternative to these proposed amendments would be to take no action and not provide the guidance and clarity that is needed for the process. Without the proposed amendments, different processes would be followed, leading to inconsistencies and ultimately a

CALIFORNIA REGULATORY NOTICE REGISTER 2021, VOLUME NUMBER 38-Z 1278 longer period of time for a CSFP–funded facility to remain unoccupied. A VAILABILITY OF THE FINAL STATEMENT OF REASONS Upon its completion, the Final Statement of Reasons will be available, and copies may be requested from the agency’s Contact Person named in this Notice or may be accessed on the website listed above. TITLE 4.

SCHOOL FINANCE AUTHORITY NOTICE IS HEREBY GIVEN that the California School Finance Authority (Authority), organized and operating pursuant to Sections 17170 through 17199.6 of the Education Code, is proposing to take the action described in the Informative Digest. Any person interested may present written statements or arguments relevant to the proposed action. Written comments, including those sent by mail, facsimile, or e–mail to the address listed under Contact Person in this Notice, must be received by the Authority no later than Monday, November 1, 2021. A public hearing is not scheduled.

A public hearing will be held if any interested person, or his or her duly authorized representative, submits a written request for a public hearing to the contact person listed below no later than 15 days prior to the close of the written comment period.

Following the public hearing, if one is requested, or following the written comment period if no public hearing is requested, the California School Finance Authority Board, upon its own motion or at the instance of any interested party, may thereafter adopt the proposals substantially as described below or may modify such proposals if such modifications are sufficiently related to the original text.

With the exception of technical or grammatical changes, the full text of any modified proposal will be available for 15 days prior to its adoption from the person designated in this notice as Contact Person and will be mailed to those persons who submit statements related to this proposal or who have requested notification of any changes to the proposal. Public Comment Period: September 17, 2021 through November 1, 2021. AUTHORITY AND REFERENCE Authority & Reference cited: Sections 41365, 41366.5, 47600 et seq., and 47605, Education Code. INFORMATIVE DIGEST A.

Informative Digest Under authority established in California Education Code sections 17179 and 17180, the Authority may adopt rules and regulations to carry out its responsibility of assisting school districts and community college districts with financing for school projects that may consist of the following elements; acquire, construct, enlarge, remodel, renovate, alter, improve, furnish, equip, own, maintain, manage, repair, operate, lease as lessee or lessor. The Authority processes between 28 to 48 applications for loans under the Charter School Revolving Loan Fund Program (Program) each year.

These loans are intended to assist new Charter Schools in meeting their short–term cash flow needs when State revenues based on student attendance are not sufficient to cover operating expenses. These regulations are intended to refine and add clarity and specificity to the administration of the Program by defining terms, modifying the over subscription process, the loan application, application materials, and giving the schools the ability to remedy a default. The Authority submits these proposed regulations to provide guidance to the public and those charter schools eligible for the Program.

The regulations as proposed also serve to ensure Program regulations are consistent with current Program practices, and include revisions to language to provide clarity and promote internal consistency within the regulations as well as consistency between regulations of the programs administered by the Authority. Pursuant to its authority to promulgate rules and regulations under

Section 41365(

h) of the Education Code, the Authority proposes to amend sections 10170.17, 10170.18, 10170.19, 10170.20, 10170.21 and 10170.22 of Title 4, Division [15], [Article 1.6] to the California Code of Regulations to accomplish the following objectives: 1. Modify the use of Free and Reduced– Price Meal (FRPM) data and regions used to determine preference in the event of Program oversubscription. 2. Ensure that the regulations are consistent with current Program practices. 3. Update Program application content to align with current internal practices that focus on financial soundness for loan recommendations. 4. Improve internal consistency of the regulations and make them easier to understand.

CALIFORNIA REGULATORY NOTICE REGISTER 2021, VOLUME NUMBER 38-Z 1279 B. Policy Statement Overview/Anticipated Benefits or Proposal The regulations will benefit the welfare of California residents because they will assist in providing school districts and community college districts access to financing for working capital improvements, a purpose the Legislature explicitly stated was in the interest of the state and its people. After administrating the Program since 2013–14, the Authority has found that many items that were once requested for review of applicant charter schools are no longer necessary.

A majority of the proposed changes are to simplify and streamline the application and the review process conducted by staff. The Authority are not subject matter experts in regards to the qualifications needed to get a charter petition approved. As such, staff now rely on process of the approval done by the authorizer, as they are in the position to determine if the qualifications of opening a school are met and sufficient. Furthermore, the Authority is proposing to delete and re–write the methodology of establishing priority if there are insufficient funds due to oversubscription.

The current method is overly complicated and the Authority wishes to simplify the process. Additionally, the Program has only been oversubscribed once where staff had to ensure equal representation amongst “Regions” that were established in the first approved Program regulations. Instead, the Authority recommends determining priority by the age of the charter school, confirmed by the California Department of Education’s (CDE) website.

These changes streamline and clarify Program requirements and procedures, helping to ensure the Authority has clear and uniform standards, internal controls, and guidelines that ensure consistent and effective administration of the Program. This in turn protects Program funds and clarifies Program expectations for the charter school community and the public at large. C.

Consistency/Compatibility with Existing State Regulations The Authority has conducted an evaluation as to whether there are any related regulations on this matter and has found that these are the only regulations dealing with this type of loan program. Therefore, the proposed regulations do not present any inconsistencies or incompatibilities with existing state regulations. D. Documents Incorporated by Reference In accordance with 1 CCR 20(c)(3) and Government Code Sections 11346.1(b)(2) and 11346.5(a)(3), the Authority provides a Good Standing Confirmation Form (GSCF) (CSFA 1119, rev.

November 2019), incorporated herein by reference. FISCAL IMPACT ESTIMATES AND RESULTS OF THE ECONOMIC IMPACT ASSESSMENT Fiscal Impact on Public Agencies Including Costs or Savings to State Agencies or Costs/Savings in Federal Funding to the State: None. Nondiscretionary Costs/Savings to Local Agencies: None. Mandate on local agencies and school districts: None. Cost to Any Local Agency or School District for Which Government Code Sections 17500–17630 Require Reimbursement: None.

Significant Statewide Adverse Economic Impact Directly Affecting Business, including the Ability to Compete: The Authority has made an initial determination that this regulatory action merely proposes to implement, interpret, or make specific existing requirements and procedures and therefore will not have a significant, statewide adverse economic impact directly effecting business, including the ability of California businesses to compete with businesses in other states.

In fact, by providing additional funding opportunities to charter schools, this regulatory action will make establishing a new charter school in California easier and more attractive. Impact on Jobs/New Businesses: The Authority has determined that this regulatory proposal will not have any negative impact on the creation of jobs or new businesses or the elimination of jobs or existing businesses of the expansion of businesses in the State of California.

However, because of the increased funding opportunities for new Charter Schools, such schools in California may be able to begin operations more quickly and be at less risk of failure. Cost Impact on Representative Private Person or Business: The Authority is not aware of any cost impacts that a representative private person or business would necessarily incur in reasonable compliance with the proposed action. Effect on Housing Costs: None. Effect on Small Business: The Authority has determined that this regulatory proposal may have a positive impact on charter schools and businesses supporting Charter Schools.

The creation of additional funding opportunities to provide start–up costs to California Charter Schools may result in a large number of Charter Schools, or in the survival of Charter Schools that would not have survived without funding assistance. Economic Impact Assessment/Analysis

Summary Comments: This proposed regulation is not a “major regulation”, therefore there is no economic impact assessment comment from the Department of Finance and no response.

CALIFORNIA REGULATORY NOTICE REGISTER 2021, VOLUME NUMBER 38-Z 1280 CONSIDERATION OF ALTERNATIVES In accordance with Government Code

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

Any interested persons may present statements or arguments relevant to the above determination during the written comment period. INITIAL STATEMENT OF REASONS, THE TEXT OF PROPOSAL, AND THE RULEMAKING FILE The Authority has prepared an Initial Statement of the reasons for the proposed action and has available all of the information upon which the proposal is based. The Initial Statement of Reasons is available on the Authority’s website.

Copies of the express language of the proposed regulations, any document incorporated by reference, the Initial Statement of Reasons, and all of the information upon which the proposal is based, may be obtained throughout the rulemaking process upon request from the Authority Contact Person or on the website listed below. The file is available for inspection at CSFA ’s office at 915 Capitol Mall, Sacramento, California, during normal business hours. Please be aware that due to COVID–19, the office is not fully staffed at all times. If you wish to inspect the documents in person, please call first.

A VAILABILITY AND LOCATION OF THE FINAL STATEMENT OF REASONS AND RULEMAKING FILE A Final Statement of Reasons will be created after the closing of the public comment period. You may obtain a copy of the final statement of reasons once it has been prepared from the Contact Person named below or aby accessing the website listed below.

CONTACT PERSON Written comments, inquiries, and any questions regarding the substance of the Regulations shall be submitted or directed to: Katrina Johantgen, Executive Director California School Finance Authority at: 300 South Spring Street, Suite 8500 Los Angeles, CA 90013 (213) 620–4467 or 915 Capitol Mall, Room 101 Sacramento, CA 95814 (916) 651–7710 Or to: kjohantgen@treasurer.ca.gov or csrlf@treasurer.ca.gov The following person is designated as a backup Contact Person for inquiries only regarding the Regulations: Ravinder Kapoor, Senior Attorney State Treasurer’s Office 915 Capitol Mall, Room 110 Sacramento, CA 95814 (916) 653–2995 Website Access: Materials regarding this proposal can be found at https://www.treasurer.ca.gov/csfa/ csfgp/public–comment.asp.

TITLE 4. GAMBLING CONTROL COMMISSION AB 120 HEARINGS UPDATE CGCC–GCA–2021–06–R NOTICE IS HEREBY GIVEN that the California Gambling Control Commission (Commission) is proposing to take the action described in the Informative Digest after consideration of all relevant public comments, objections, and recommendations received concerning the proposed action.

Comments, objections, and recommendations may be submitted as follows: WRITTEN COMMENT PERIOD Any interested person, or his or her authorized representative, may submit written comments relevant to the proposed regulatory action to the Commission at any time during the 45–day public comment period. To be eligible for the Commission’s consideration, all written comments must be received at its office no later than midnight on November 2, 2021. Comments

CALIFORNIA REGULATORY NOTICE REGISTER 2021, VOLUME NUMBER 38-Z 1281 sent to persons and/or addresses other than those specified under Contact Persons, or received after the date and time specified above, will be included in the record of this proposed regulatory action, but will not be summarized or responded to regardless of the manner of transmission. Written comments relevant to the proposed regulatory action may be sent by mail, facsimile, or e–mail, directed to one of the individuals designated in this notice as a contact person.

PUBLIC HEARING The Commission has not scheduled a public hearing on this matter. Any interested person, or his or her authorized representative, may request a hearing pursuant to Government Code

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

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

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

AUTHORITY AND REFERENCE Pursuant to the authority vested by sections 19811, 19823, 19824, 19840, and 19841 of the Business and Professions Code; and to implement, interpret or make specific sections 19825, 19862, 19869, 19870, and 19871, Business and Professions Code, the Commission is proposing to adopt the following changes to Chapters 1 and 2 of Division 18 of Title 4 of the California Code of Regulations: INFORMATIVE DIGEST AND POLICY STATEMENT OVERVIEW Introduction: The Commission is the state agency charged with the administration and implementation of the Gambling Control Act (Act). 1 The Commission is authorized to adopt regulations governing applications for licenses, permits, registrations, findings of suitability, or other approvals, 2 including the consideration of an application at an evidentiary hearing.3 The Commission’s regulations provide comprehensive procedures for evidentiary and non– evidentiary hearings and related topics.

At a non– evidentiary hearing meeting, the Commission may, among other actions, issue a license, temporary license, interim license, registration, permit, finding of suitability, renewal, or other approval; or it may elect to hold an evidentiary hearing if issues are identified that require additional information or consideration related to an applicant’s suitability for licensure.

For evidentiary hearings on applications, the regulations require the hearing to be conducted as a Gambling Control Act hearing (GCA hearing), unless the Commission determines the hearing should be conducted as an Administrative Procedure Act hearing (APA hearing). This proposed regulatory action will implement the changes made in Assembly Bill (AB) 120 (Salas,

Chapter 45, Statutes of 2021), which becomes effective January 1, 2022. AB 120 made a number of changes to the way the Commission can choose to consider an application. These include: 1. C hanging the timeline for when a request to withdraw an application may be made from when the Bureau of Gambling Control within the Department of Justice (Bureau) has completed its initial review of an application and prepared any recommendation for the Commission to when the Commission has issued its final decision on the application. 2.

P roviding the Commission with the authority to deny an application, or approve an application with limits, restrictions, or conditions, without an evidentiary hearing provided that the action of the Commission is stayed for 30 days to allow the applicant the opportunity to request an evidentiary hearing. Existing Law: Business and Professions Code

section 19869 provides that a request for withdrawal of an application may be made at any time prior to the final action upon the application by the Commission. The Commission shall not grant the request if it determines it would not be consistent with the public interest and policies of the Act. Additionally, the Commission may approve the withdrawal request with or without prejudice. 1 B usiness and Professions Code, Division 8,

Chapter 4,

section 19800 et seq. 2 B usiness and Professions Code

section 19824, subdivision (a). 3 B usiness and Professions Code

section 19870.

CALIFORNIA REGULATORY NOTICE REGISTER 2021, VOLUME NUMBER 38-Z 1282 Business and Professions Code

section 19870 provides the conditions under which the Commission considers an application, the recommendation of the Chief, and any other testimony and written comments and decides to either grant an application, grant an application with conditions, limitations, or restrictions, deny an application, or consider an application at an evidentiary hearing. Business and Professions Code

section 19871 provides authority for promulgating regulations pertaining to the evidentiary hearing process, and provides a list of items that must be part of the process. Effect of Regulatory Action : This proposed action has been prepared to modify existing GCA hearing regulations including the Notice of Defense form, CGCC–CH1–03, to implement the statutory changes made in AB 120.

This includes the establishment of two new options for the Commission to consider at a Commission meeting, the denial of an application for a license, work permit, finding of suitability, or other approval, or the approval of an application for a license, work permit, finding of suitability, or other approval with conditions, restrictions, or limitations. Additionally, the proposed action includes other necessary changes to integrate these two options with the Commission’s existing evidentiary hearing processes.

Other regulatory changes are proposed to implement the other provisions of AB 120, including staying specified Commission action for up to 30 days, extending the request period for the withdrawal of an application through the Commission’s review period, and adjusting the Commission’s timeline for issuing an interim renewal license.

Anticipated Benefits of Proposed Regulation : This proposed action will have the benefit of providing the Commission a process to consider an application that saves the steps of a default decision or a hearing without applicant participation, should the applicant choose to waive their right to an evidentiary hearing.

Specific Proposal : This proposed action will make changes within the California Code of Regulations, Title 4, Division 18 as follows: General Notes A general change throughout has been made in all references to the current version of the Notice of Defense form, CGCC–CH1–03 (Rev. 09/21), as amendments to the form are being proposed as part of this regulatory package.

Chapter 1. General Provisions.

Article 1.

Definitions and General Provisions. Amend

Section 12002. General

Definitions This

section provides general

definitions for overall use in this division. Subsection (

g) provides the definition of “Bureau report” to mean the final determination by the Chief of the Bureau regarding his or her recommendation to the Commission on an application. This provision is modified to provide a definition of Bureau report, which references the filing by the Chief of the Bureau of his or her written reasons, as provided in Business and Professions Code

section 19868(b), regarding his or her recommendation of denial or approval with restrictions or conditions, or the notification to the Commission that the Bureau is recommending approval or is not issuing a recommendation of denial or approval with restrictions or conditions. Amend 12006. Service of Notices, Orders, and Communications.

Section 12006 provides standards for notices that are required by Commission regulation. Subsection (

b) provides that an applicant, licensee, or designated agent may request that the Commission provide communications electronically instead of mailing written communications. This provision is modified to change the date of the Notice of Defense. Amend 12012. Ex Parte Communication.

Section 12012 provides the Commission’s guidelines for what is and is not an ex parte communication and what to do should an inappropriate communication occur. Subsection (

a) provides the definition for “ex parte communication” and “ ex parte .” This definition includes a misspelling for the word “communication” which is being corrected. Subsection (

d) provides a list of communications that do not qualify as ex parte. Paragraph (2) provides that communications made at a public hearing or meeting that has been properly noticed do not qualify as ex parte communications. This provision is modified to replace “public hearing or meeting” with “evidentiary hearing or Commission meeting.” Subsection (

e) provides when the Commission’s ex parte regulations apply to an APA hearing. With the addition of new paragraphs within

Section 12054(a), this provision is renumbered to reference the current provision’s new number. Amend 12015. Withdrawal of Applications.

Section 12015 provides the process by which an applicant can request, and the Commission considers, the withdrawal of an application. Subsection (

a) provides that a request may be made by an applicant, or his, her, or its designated agent. The provision provides that a request must be made

CALIFORNIA REGULATORY NOTICE REGISTER 2021, VOLUME NUMBER 38-Z 1283 prior to the Bureau report being submitted to the Commission. The regulations have been revised to repeal the reference to the Bureau report and replacing it with a reference to

Section 12066(b). Additionally, subsection (

a) provides that the Executive Director, upon receipt of information or documentation provided by the Bureau will

schedule the withdrawal request for Commission consideration. This provision is amended to provide that the information and documentation provided by the Bureau must be that information required by Business and Professions Code

section 19869. Subsection (

d) provides that if a request for withdrawal is granted with prejudice, the applicant will not be eligible to apply again for a license or approval for one year. This provision has been modified to be consistent with the changes to AB 120, specifically, revising the restriction from “will not be eligible” to “will be ineligible.” Additionally, an applicant will no longer be limited from applying for a license or approval, but will instead be ineligible to submit or renew an application for the one–year period. Amend 12035. Issuance of Interim Renewal Licenses.

Section 12035 provides standards and conditions for issuing an interim renewal license. Subsection (

a) provides when the Commission will issue an interim renewal license to an applicant. The proposed action would provide that the Commission would instead provide the interim renewal license prior to the expiration of the existing license should a triggering event occur. Additionally, the language is revised to include “finding of suitability” separate from “other approval.

Finally, the proposed action would amend one paragraph and adopt two more paragraphs: ● Paragraph (1) provides that the Commission will issue an interim renewal license when it has elected to hold an evidentiary hearing on a renewal license, work permit, or other approval.

This provision is renumbered to reference the current provision’s new number. ● New paragraph (4) will provide that the Commission will issue an interim renewal license to an applicant for a renewal license, work permit, finding of suitability, or other approval when their requested renewal license, work permit, finding of suitability, or other approval has been issued with conditions, restrictions, or limitations at a Commission meeting. ● New paragraph (5) will provide that the Commission will issue an interim renewal license to an applicant for the denial of a renewal license, work permit, finding of suitability, or other approval at a Commission meeting.

Subsection (

b) provides that the Commission will issue a new interim renewal license if the hearing process will not be concluded before the expiration of the current interim renewal license. With the addition of new paragraphs within

Section 12054(a), this provision is renumbered to reference the current provision’s new number.

Article 2. Procedures for Hearings and Meetings on Applications. Amend 12052. Commission Meeting; General Procedures; Scope; Notice; Rescheduling of Meeting.

Section 12052 provides information on how the Commission issues notices for the consideration of applications. Subsection (

c) provides what the Commission will include in a notice for any license, permit, finding of suitability, renewal, or other approval. ● Paragraph (1) provides what the Commission will include in a notice for a non–evidentiary hearing meeting, now renamed Commission meeting. ○ Subparagraph (

C) provides notice that an individual who is making an oral statement might be required to be placed under oath. This provision is repealed. ● Paragraph (2) provides what the Commission will include in a notice for a GCA hearing. Subparagraph (

E) is modified to change the date of the Notice of Defense. Additionally, the Notice of Defense form has been amended. ● A new paragraph is proposed to be added to the form’s instructions. This paragraph would provide the timeline for requesting an evidentiary hearing when an application has been approved with conditions, restrictions, or limitations, or has been denied at a Commission meeting. The instructions inform the applicant that the Notice of Defense form must be submitted to both the Commission and the Bureau, otherwise it will result in the Commission’s decision becoming final.

Additionally, the Notice of Defense must be received by the Commission within 30 calendar days of the Commission meeting where the application was approved with conditions, restrictions, or limitations, or has been denied. ● The existing instructions on the form have been amended to provide clarification that the existing process will apply for applications that the Commission has referred to an evidentiary hearing. Additionally, the timeline for submittal of the Notice of Defense has been changed from 21 days to 30 calendar days.

CALIFORNIA REGULATORY NOTICE REGISTER 2021, VOLUME NUMBER 38-Z 1284 Amend 12054. Consideration at Regular Commission Meeting.

Section 12054 provides a limited list of the possible actions that could be taken by the Commission at a non–evidentiary hearing meeting. This section’s title has been changed to Consideration at a Commission meeting. Subsection (

a) provides a list of nine possible actions that the Commission could take at a non–evidentiary hearing meeting, now renamed Commission meeting. This proposed action would add two new items to the list of possible Commission actions. The actions authorized by AB 120 are: ● Paragraph (2) provides that the Commission can issue a license, work permit, finding of suitability, or other approval with conditions, restrictions, or limitations. ● Paragraph (3) provides that the Commission can deny an application for a license, work permit, finding of suitability, or other approval.

Additionally, both of these provisions provide that if the application is for a renewal, the Commission will issue an interim renewal license. As the list of actions in subsection (

a) is designed to provide an applicant with a list of possible results, it is consistent to reference this additional action here. ● Existing paragraphs (2) through (9) are renumbered (4) through (11). This is a non– substantive change. Amend 12056. Evidentiary Hearings.

Section 12056 provides the process when the Commission elects to hold an evidentiary hearing, including information such as limitations to discovery, costs, and the ability of the Commission to decide, at any time, that a referred application should be considered at a GCA hearing, APA hearing, or Commission meeting instead of the evidentiary hearing it had previously been referred to. Subsection (

a) provides that when the Commission has elected to hold an evidentiary hearing, that evidentiary hearing will by default be a GCA hearing, unless the Commission or Executive Director determines that the application should be considered at an APA hearing. This provision is modified to require that when an applicant has elected to request an evidentiary hearing following the Commission’s denial of an application, or its approval with conditions, restrictions, or limitations, the evidentiary hearing process will follow the same process as when the Commission has elected to hold an evidentiary hearing. Subsection (

d) provides that the Commission reserves the ability to decide, at any time, that a referred application should be considered at a GCA hearing, APA hearing, or Commission meeting instead of the evidentiary hearing it had previously been referred to. With the addition of new paragraphs within

Section 12054(a), this provision is renumbered to reference the current provision’s new number. Amend 12057. Default Decisions and Uncontested Applications.

Section 12057 provides the specifics of the Commission’s default decision process. Subsection (

a) provides what happens if an applicant fails to submit a completed Notice of Defense according to the timelines provided on the form or affirmatively waives their right to an evidentiary hearing. This provision is modified to change the date of the Notice of Defense. ● Paragraph (5) is proposed to provide that if an application was approved with conditions, limitations, or restrictions, or was denied at a Commission meeting and the applicant affirmatively waives their rights to an evidentiary hearing or 30 calendar days has passed, the Commission need only finalize the decision pursuant to

Section 12055(b)(4). Amend 12060. GCA Hearings.

Section 12060 provides the specifics of a GCA hearing. Subsection (

b) provides that if the Commission has elected to hold a GCA hearing, the Executive Director will provide notices to the various parties, as specified, 60 days in advance of the GCA hearing. This provision is amended to include when the Commission has made a decision on an application at a Commission meeting, and the applicant has requested an evidentiary hearing. Amend 12066. Final Decisions; Judicial Review.

Section 12066 provides when a decision by the Commission is final and what judicial remedies are available. Subsection (

a) provides information on when a decision is final if the Commission accepts a request for withdrawal or a decision of abandonment is made. With the addition of new paragraphs within

Section 12054(a), this provision is renumbered to reference the current provision’s new number. Subsection (

b) provides a list of when a decision on an application is final. ● Paragraph (4) is proposed to provide that an application is final if the application was approved with conditions, limitations, or restrictions, or was denied at a Commission meeting and the applicant affirmatively waives their rights to an evidentiary hearing or 30 calendar days has passed. Subsection (

c) provides that a decision of the Commission denying an application or imposing conditions on a license is subject to judicial review, as specified. This provision is amended to clarify that

CALIFORNIA REGULATORY NOTICE REGISTER 2021, VOLUME NUMBER 38-Z 1285 judicial review only applies if the denial or approval with conditions was made after an evidentiary hearing.

Chapter 2. Licenses and Work Permits.

Article 4. Interim Owner Category License. Amend 12134. General Provisions.

Section 12134 provides a series of general provisions that apply to the interim owner category license process. Subsection (

c) provides that if the Bureau determines that the holder of an interim owner category license has become disqualified or may have violated a condition of their interim owner category license, the matter will be set for Commission consideration at a non–evidentiary hearing meeting, now renamed Commission meeting. CONSISTENCY OR COMPATIBILITY WITH EXISTING STATE REGULATIONS The Commission has evaluated this regulatory action and determined that the proposed regulations are neither inconsistent nor incompatible with any other existing state regulations.

COMPARABLE FEDERAL LAW There are no existing federal regulations or statutes comparable to the proposed regulations. FISCAL IMPACT ESTIMATES Fiscal Impact on Public Agencies Including Costs or Savings to State Agencies or Costs/ Savings in Federal Funding to the State : Amend

Section 12035. Issuance of Interim Renewal Licenses. Existing regulations require that the Commission will provide an interim renewal license when a triggering event occurs, without considering the existing duration of the current license. The proposed action would provide that the Commission would instead provide an interim renewal license prior to the expiration of the existing license. Currently, the Commission does not believe this timeline will have a significant impact on the Commission.

The vast majority of applicants that go to an evidentiary hearing, including those that are considered as a default decision, have a timeline sufficiently extended to require the issuance of an interim renewal license, no matter if it is immediately issued or issued in conjunction with the expiration of the existing license. Where the Commission does expect to realize some savings, is for applications that are now denied, or approved with conditions, limitations, or restrictions, at a Commission meeting and whose applicant does not submit a notice of defense requesting an evidentiary hearing.

As discussed in greater detail below, the Commission does not have an estimate on how many applications may be resolved in this way; however, based upon a recent fee study, the Commission has determined that the issuance of the badge associated with the interim renewal license is approximately $8 per instance. So regardless of how many applicants will no longer require an interim renewal license, the total savings will not be significant. Amend

Section 12054. Consideration at a Commission Meeting The proposed action provides two new options for the Commission to consider at a Commission meeting. These changes do not significantly alter the Commission’s evidentiary hearing process. Currently, after receiving the application from the Bureau, the application can follow one of two paths: (1) the Executive Director can directly

schedule the application to an evidentiary hearing or (2) the Commission considers the application at a Commission meeting, at which point it can approve the application or send it to an evidentiary hearing.

Either way, once the application has been sent to an evidentiary hearing, the applicant will receive a Notice of Defense form, at which point the applicant can: (1) accept a default decision which can be either denial or approval with conditions, restrictions, or limitations, (2) request an evidentiary hearing, or (3) fail to submit a Notice of Defense, in which case the Commission may decide to deny the application or approve it with conditions, restrictions, or limitations.

Under the proposed regulations, the Commission can decide at the Commission meeting to either deny the application or approve it with conditions, restrictions, or limitations, at which point the applicant will receive a Notice of Defense form and can: (1) accept the Commission’s denial or approval with conditions, restrictions, or limitations, (2) request an evidentiary hearing, or (3) fail to submit a Notice of Defense, in which case the Commission’s previous decision to deny the application or approve it with conditions, restrictions, or limitations will stand.

As illustrated here, the only alteration is for applications that are denied or approved with conditions, limitations, or restrictions at a Commission meeting and whose applicant does not request an evidentiary hearing.

Additionally, there may be some savings from applicants who would have otherwise participated in a hearing had the Commission chosen to send an application to an evidentiary hearing, but who choose not to based upon an initial decision at a Commission meeting; either because they are willing to accept the Commission’s conditions, limitations, or restrictions, or because they choose not to request an evidentiary hearing after having their application denied.

CALIFORNIA REGULATORY NOTICE REGISTER 2021, VOLUME NUMBER 38-Z 1286 For applications where the Commission will now approve with conditions, limitations, or restrictions, the Commission estimates no impact. Currently, when electing to send an application to an evidentiary hearing, the Commission is required to provide a focus for the evidentiary hearing.

For applications that the Commission is sending to an evidentiary hearing to consider approval with conditions, limitations, or restrictions, the Notice of Defense currently allows the applicant to waive their right to an evidentiary hearing and accept the conditions, limitations, or restrictions, or request an evidentiary hearing to challenge them. This process is in line with how the process will work under the proposed action, and so in these types of cases there will be no impact to the Commission.

For applications where the Commission will now deny an application at an Commission meeting, the Commission estimates some unknown impact. The Commission regulations allow for two responses to a denial (besides accepting it): 1. F ail to submit a Notice of Defense 2. R equest an evidentiary hearing For the first situation, the Commission expects that there will be a reduction in default decisions, and thus a savings to the Commission.

An analysis of the Commission’s workload tracking database and the entries related to applications that result in a default decision shows the following average time allocated to these projects is: Table 1.

C ommission costs for default decisions Position: Senior Legal Analyst Number of Hours: 3.5 Hourly Rate: $40.84 Cost: $408 Position: Attorney Number of Hours: 10 4 Hourly Rate: $73.84 Cost: $258 Position: Chief Counsel Number of Hours: .5 Hourly Rate: $76.89 Cost: $38 Position: Executive Director Number of Hours: .5 Hourly Rate: $77.14 Cost: $39 4 T his reflects the combined total hours of all attorneys working on a project in their various roles.

Position: Commissioner Number of Hours: 25 Hourly Rate: $79.96 Cost: $160 Position: Chair Number of Hours: .5 Hourly Rate: $82.50 Cost: $41 Total: $945 While the Commission is unable to accurately predict how the Commission might decide an application, the Commission does expect that those applications who exhibit information that would result in a mandatory denial under the Gambling Control Act will be denied at a Commission meeting.

The Commission averages approximately 20 default decisions a year, and based on an analysis of these cases estimates that approximately 75% or 15 per year include facts that would result in a mandatory denial. As such, the Commission expects to save the costs of a minimum 15 default decisions at a total of $14,175 per year. Additionally, the Commission expects that some other portion of those 20 annual default decisions will be denied at a Commission meeting, but is unable to predict how many.

For the second situation, the Commission estimates that there may be a reduction in evidentiary hearings, and thus a savings to the Commission. An analysis of the Commission’s workload tracking database and the entries related to applications that result in an evidentiary hearing shows the following average time allocated to these projects is: Table 2.

C ommission costs for evidentiary hearings Position: Senior Legal Analyst Number of Hours: 26 Hourly Rate: $40.84 Cost: $1,062 Position: Attorney Number of Hours: 77.06 6 Hourly Rate: $73.84 Cost: $5,690 Position: Chief Counsel Number of Hours: 6.8 Hourly Rate: $76.89 Cost: $523 5 T his reflects four Commissioners each spending .5 hours on a project. 6 T his reflects the combined total hours of all attorneys working on a project in their various roles.

CALIFORNIA REGULATORY NOTICE REGISTER 2021, VOLUME NUMBER 38-Z 1287 Position: Executive Director Number of Hours: 15 Hourly Rate: $77.14 Cost: $1,157 Position: Commissioner Number of Hours: 60 7 Hourly Rate: $79.96 Cost: $4,798 Position: Chair Number of Hours: 15 Hourly Rate: $82.50 Cost: $1,238 Total: $14,467 The Commission is unable to predict how many applications that are currently sent to an evidentiary hearing and for which an evidentiary hearing was held will now result in no evidentiary hearing being held.

Each of these applications had their applicants affirmatively indicate a desire to participate in an evidentiary hearing, and so while it is possible that a denial at a Commission meeting will impact the applicant’s willingness to participate in a hearing, there is no way to estimate that amount. Non–discretionary Cost or Savings Imposed Upon Local Agencies: None. Mandate Imposed on any Local Agency or School District for Which

Part 7 (Commencing with

Section 17500) of Division 4 of the Government Code Requires Reimbursement: None. Cost to any Local Agency or School District for Which

Part 7 (Commencing with

Section 17500) of Division 4 of the Government Code Requires Reimbursement : None. Effect on Housing Costs: None. Impact on Business: The Commission has determined that the proposed regulatory action would have no significant statewide adverse economic impact directly affecting businesses, including the ability of California businesses to compete with businesses in other states.

This determination is based on the following facts or evidence/documents/testimony: The basis for this determination is that this proposed action imposes no mandatory requirement on businesses or individuals and does not significantly 7 T his reflects four Commissioners each spending 15 hours on a project. change the Commission’s current practices and procedures. The proposed action provides an alternative timeline on how applications can be considered, it does not remove or significantly alter any existing process.

Cost Impact on Representative Private Person or Business: The Commission has determined there would be no increase in costs to representative private persons or businesses as a result of complying with the proposed action. The proposed action provides an alternative timeline on how applications can be considered; it does not remove or significantly alter any existing process.

Effect on Small Business: The Commission has made a determination that the proposed regulatory action would have no significant impact on small businesses as the proposed action only provides an alternative timeline on how applications can be considered; it does not remove or significantly alter any existing process.

RESULTS OF ECONOMIC IMPACT ASSESSMENT/ANALYSIS Impact on Jobs/New Businesses: The Commission has determined that this regulatory proposal will not have a significant impact on the creation of new jobs or businesses, the elimination of jobs or existing businesses, or the expansion of businesses in California. For this purpose, the consolidated small business definition provided in Government Code

section 11346.3, subdivision (b), paragraph (4) was utilized. The basis for this determination is that this proposed action imposes no mandatory requirement on businesses or individuals and does not significantly change the Commission’s current practices and procedures. The proposed action provides an alternative timeline on how applications can be considered; it does not remove or significantly alter any existing process.

Benefits of Proposed Regulation : This proposed action will have the benefit of providing the Commission a process to consider an application that saves the steps of a default decision or a hearing without applicant participation, should the applicant choose to waive their right to an evidentiary hearing. Health and Welfare of California Residents : It has been determined that the proposed action will protect the health, safety, and general welfare of California residents by aiding and preserving the integrity of controlled gambling.

CALIFORNIA REGULATORY NOTICE REGISTER 2021, VOLUME NUMBER 38-Z 1288 Worker Safety: It has been determined that the proposed action will not affect worker safety because it does not pertain to working conditions or worker safety issues. State’s Environment: It has been determined that the proposed action will not affect the State’s environment because it has nothing to do with environmental issues.

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

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

A VAILABILITY AND LOCATION OF THE RULEMAKING FILE AND THE FINAL STATEMENT OF REASONS All the information upon which the proposed action is based is contained in the Rulemaking File that will be available for public inspection and copying at the Commission’s office throughout the rulemaking process. Arrangements for inspection and/or copying may be made by contacting the primary contact person named below. You may obtain a copy of the Final Statement of Reasons, once it has been prepared, by making a written request to one of the contact persons named below or by accessing the Commission’s Website listed below.

CONTACT PERSONS All comments and inquiries concerning the substance of the proposed action should be directed to the following primary contact person: Joshua Rosenstein, Legislative and Regulatory Specialist Legislative and Regulatory Affairs Division California Gambling Control Commission 2399 Gateway Oaks Drive, Suite 220 Sacramento, CA 95833–4231 Telephone: (916) 274–5823 Fax: (916) 263–0499 E–mail: jrosenstein@cgcc.ca.gov Requests for a copy of the Initial Statement of Reasons, proposed text of the regulation, modified text of the regulation, if any, or other technical information upon which the proposed action is based should be directed to the following backup contact person: Alex Hunter, Legislative and Regulatory Specialist Legislative and Regulatory Affairs Division California Gambling Control Commission 2399 Gateway Oaks Drive, Suite 220 Sacramento, CA 95833–4231 Telephone: (916) 263–1301 Fax: (916) 263–0499 E–mail: ahunter@cgcc.ca.gov WEB SITE ACCESS Materials regarding this proposed action are also available on the Commission’s website at www.cgcc. ca.gov.

TITLE 13. HIGHWAY PATROL EXPLOSIVES ROUTES — MAP 12 (CHP–R–2021–06204) The California Highway Patrol (CHP) proposes to amend regulations in Title 13 of the California Code of Regulations, Division 2,

Chapter 6,

Article 1,

Section 1152.2, regarding the designated routes for the transportation of explosives by commercial vehicles on highways in the state. INFORMATIVE DIGEST/POLICY STATEMENT OVERVIEW Pursuant to Division 14, Transportation of Explosives, commencing with

Section 31600 of the California Vehicle Code (CVC), the CHP shall adopt regulations specifying the routes to be used in the transportation of explosives. The CVC requires the

CALIFORNIA REGULATORY NOTICE REGISTER 2021, VOLUME NUMBER 38-Z 1289 CHP to keep information current in regulations with maps indicating the designated routes. The proposed regulation amendments will remove 11.4 miles and extend 4.1 miles of currently designated routes in the Pismo Beach/Grover Beach/Oceano area. These updates will provide carriers an alternative route to reduce potential risks associated with the transportation of explosives, thereby enhancing public health and safety.

The proposed amendments have received concurrence from the CHP’s Coastal Division, Pismo Beach Fire Department, Five Cities Fire Authority, San Luis Obispo County Fire Department, State Fire Marshal, and California Department of Transportation. Once adopted, the proposed amendments will be provided to the Federal Motor Carrier Safety Administration of the United States Department of Transportation. This proposed regulatory action will continue to provide a nonmonetary benefit by protecting the health, safety, and welfare of California’s residents, workers, and environment.

The changes to the application of the regulation are not substantive and bring the regulation in conformance with existing statute. The proposed changes update and clarify highway routes designated for carriers transporting explosives, and contribute to transportation safety and public health. During the process of developing these regulation amendments, the CHP has conducted a search of any similar regulations on this topic and has concluded that these regulations are neither inconsistent, nor incompatible, with existing federal and state regulations.

PUBLIC COMMENT Any interested person may submit written comments on the proposed action via facsimile at (916) 322–3154, by electronic mail to cvsregulations@chp.ca.gov, or by writing to: California Highway Patrol Commercial Vehicle

Section Attention: Dr. Tian–Ting Shih P.O. Box 942898 Sacramento, CA 94298–0001 Written comments must be received by November 1, 2021. PUBLIC HEARINGS No public hearing has been scheduled. If any person desires a public hearing, a written request must be received by the CHP, Commercial Vehicle

Section (CVS), no later than 15 days prior to the close of the written comment period. AVAILABILITY OF INFORMATION The CHP has available for public review an initial statement of reasons for the proposed regulatory action, the information upon which this action is based, and the proposed regulation text in strikeout and underline format. Requests to review or receive copies of this information should be directed to the CHP at the above address; by facsimile, at (916) 322–3154; or by calling the CHP, CVS, at (916) 843–3400.

All requests for information should include the following: the title of the rulemaking package, the requester’s name, proper mailing address (including city, state, and zip code), and a daytime telephone number in case the information is incomplete or illegible. The rulemaking file is available for inspection. Interested parties are advised to call the CHP, CVS, for an appointment. All documents regarding the proposed action are available through the CHP’s website at https://www. chp.ca.gov/News–Alerts/Regulatory–Actions.

Any person desiring to obtain a copy of the adopted text and a final statement of reasons may request them at the above–noted address. Copies will also be posted on the CHP website. CONTACT PERSON Any inquiries concerning the written materials pertaining to the proposed regulations or the substance of the proposed regulations should be directed to Dr. Tian–Ting Shih or Sergeant Robert Daniels, at (916) 843–3400. ADOPTION OF PROPOSED REGULATIONS After consideration of public comments, the CHP may adopt the proposal substantially as set forth without further notice.

If the proposal is modified prior to adoption and the change is not solely grammatical or substantive in nature, the full text of the resulting regulation, with the changes clearly indicated, will be made available to the public for at least 15 days prior to the date of adoption.

FISCAL IMPACT AND RESULTS OF THE ECONOMIC IMPACT ASSESSMENT The CHP has made an initial determination that this proposed regulatory action: (1) will have no effect on housing costs; (2) will not impose any new mandate upon local agencies or school districts; (3) will involve no nondiscretionary cost or savings to any local agency, no cost to any local agency or school district for which Government Code (GC) Sections 17500–17630 require reimbursement, no cost or savings to any state agency, nor costs or savings

CALIFORNIA REGULATORY NOTICE REGISTER 2021, VOLUME NUMBER 38-Z 1290 in federal funding to the state; (4) will neither create nor eliminate jobs in the State of California, nor result in the elimination of existing businesses or create or expand businesses in the State of California; and (5) will not have a significant statewide adverse economic impact directly affecting businesses, including the ability of California businesses to compete with businesses in other states.

Benefits of the Proposed Action: The proposed regulations updating the designated routes for carriers transporting explosives will continue to provide benefits, including the nonmonetary benefit of protecting public health and safety for the residents, workers, and the environment by providing a regulatory basis for enforcement efforts as they relate to safety–compliance ratings. The regulated community is encouraged to respond during the comment period of this regulatory process if significant impacts are identified.

COST IMPACTS ON REPRESENTATIVE PRIVATE PERSONS OR BUSINESSES The CHP is not aware of any cost impacts that a representative private person or business would necessarily incur in reasonable compliance with the proposed action. EFFECT ON SMALL BUSINESSES The CHP has determined that the proposed regulatory action will not affect small businesses. The action is intended to clarify and update the designated routes for commercial vehicles transporting explosives on the highways. As a result, no small business will be affected by the update. ALTERNATIVES In accordance with

Section 11346.5(a)

(13) GC, the CHP must determine that no reasonable alternative considered by the CHP, or otherwise identified and brought to the attention of the CHP, would be more effective in carrying out the purpose for which the action is proposed, would be as effective and less burdensome to affected private persons than the proposed action, or would be more cost–effective to affected private persons and equally effective in implementing the statutory policy or other provision of law. The CHP invites interested parties to present statements or arguments with respect to alternatives to the proposed regulations during the written comment period. AUTHORITY This regulatory action is being taken pursuant to

Section 31616, CVC. REFERENCE This action implements, interprets, or makes specific Sections 31303, 31304, 31601, 31602, 31607, 31611, 31614, and 31616, CVC. TITLE 15. PRISON INDUSTRY AUTHORITY NOTICE OF INTENTION TO AMEND THE CONFLICT–OF–INTEREST CODE OF THE CALIFORNIA PRISON INDUSTRY AUTHORITY NOTICE IS HEREBY GIVEN that the California Prison Industry Authority (CALPIA), pursuant to the authority vested in it by

section 87306 of the Government Code, proposes amendment to its conflict–of–interest code. A comment period has been established commencing on September 17, 2021 and closing on November 1, 2021. All inquiries should be directed to the contact listed below. CALPIA proposes to amend its conflict–of–interest code to include employee positions that involve the making or participation in the making of decisions that may foreseeably have a material effect on any financial interest, as set forth in subdivision (

a) of

section 87302 of the Government Code. The amendment carries out the purposes of the law and no other alternative would do so and be less burdensome to affected persons. Changes to the conflict–of–interest code include: adding, renaming, and eliminating positions; adding new divisions and reorganizing positions; revising disclosing categories; and other technical changes. The proposed amendment and explanation of the reasons can be obtained from the agency’s contact or website.

Any interested person may submit written com- ments relating to the proposed amendment by submit- ting them no later than November 1, 2021, or at the conclusion of the public hearing, if requested, which- ever comes later. At this time, no public hearing is scheduled. A person may request a hearing no later than October 17, 2021. CALPIA has determined that the proposed amendments: 1. Impose no mandate on local agencies or school districts. 2. Impose no costs or savings on any state agency.

CALIFORNIA REGULATORY NOTICE REGISTER 2021, VOLUME NUMBER 38-Z 1291 3. Impose no costs on any local agency or school district that are required to be reimbursed under

Part 7 (commencing with

Section 17500) of Division 4 of Title 2 of the Government Code. 4. Will not result in any nondiscretionary costs or savings to local agencies. 5. Will not result in any costs or savings in federal funding to the state. 6. Will not have any potential cost impact on private persons, businesses or small businesses. All inquiries concerning this proposed amendment and any communication required by this notice should be directed to: Lindsay Yoshitomi, Attorney, (916) 358–1711, CALPIAregs@calpia.ca.gov. TITLE 16.

BOARD OF PHARMACY NOTICE OF PROPOSED REGULATORY ACTION CONCERNING: WHOLESALER SELF–ASSESSMENTS NOTICE IS HEREBY GIVEN that the California State Board of Pharmacy (board) is proposing to take the rulemaking action described below under the heading Informative Digest/Policy Statement Overview. Any person interested may present statements or arguments relevant to the action proposed in writing. Written comments, including those sent by mail, facsimile, or e–mail to the addresses listed under Contact Person in this Notice, must be received by the board at its office on November 1, 2021.

The board has not scheduled a public hearing on this proposed action. The board will, however, hold a hearing if it receives a written request for a public hearing from any interested person, or his or her authorized representative, no later than 15 days prior to the close of the written comment period. The board may, after considering all timely and relevant comments, adopt the proposed regulations substantially as described in this notice, or may modify the proposed regulations if such modifications are sufficiently related to the original text.

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

Section 4005 of the Business and Professions Code (BPC) authorizes the board to adopt these regulations. The proposed regulations implement, interpret, and make specific sections 4022.5, 4022.7, 4043, 4044.5, 4045, 4053, 4053.1, 4059, 4120, 4160, 4161, 4201, 4301 and 4305.5 of the Business and Professions Code.

INFORMATIVE DIGEST/POLICY STATEMENT OVERVIEW Existing law requires that a wholesaler and a third– party logistics provider (3PL) be licensed by the California State Board of Pharmacy (board) in order to operate. (BPC sections 4160 and 4161.) There are some distinctions between the two settings although they are subject to the same general requirements. They must designate a designated presentative–in– charge (DRIC) or responsible manager (RM) who is responsible for their compliance with all state and federal laws and regulations pertaining to the practice of pharmacy. (BPC sections 4160(

d) and 4160(e).) All wholesalers and 3PLs are subject to extensive state and federal laws and regulations including those governing the scope of practice; prescription and labeling requirements; record keeping requirements, including policies and procedures; cooperating with inspections; duties related to storage, handling, and security of drugs and devices; duties related to compounding sterile drug products; and duties with respect to notices to the board about certain changes to staff, facilities, and operations. Existing regulations, California Code of Regulations, title 16 (CCR)

section 1784, requires the DRIC of a wholesaler to complete a self–assessment every odd–numbered year, and within 30 days when specific conditions are met. The self–assessment form assists with increasing compliance with federal and state requirements and makes the board inspection process more efficient. The self–assessment form is incorporated by reference within 16 CCR

section 1784, so as law and regulations change, the form must be updated through the rulemaking process. This is a time–intensive process and the board has not been able to update the regulation and self–assessment form as frequently as necessary, with the last update being completed in 2014. One example of this problem is the addition of the 3PL licensing category, which was established in 2014. Previously, the board licensed 3PLs as wholesalers. However, in response to a federal law change in 2013, the board successfully obtained legislation to establish 3PLs as a separate licensing category (Assembly Bill 2605, Bonilla,

Chapter 507, Statutes of 2014). To address this, the board further seeks to more clearly and directly state the requirements of the self– assessment form within regulation. By specifying the requirements in regulation, it will allow future updates to the self–assessment form to be expedited through the streamlined rulemaking process afforded

CALIFORNIA REGULATORY NOTICE REGISTER 2021, VOLUME NUMBER 38-Z 1292 for nonsubstantive changes in

Section 100 of CCR (Title 1). The board proposes to amend

Section 1784 of

Article 10 of Division 17 of Title 16 of the CCR for the purpose of updating the form incorporated by reference therein (Wholesaler Dangerous Drugs and Dangerous Devices Self–Assessment (17M–26 Rev. 10/14)) to include recent changes in law and regulation. Additionally, the proposal will add the requirement for the new licensing category, 3PLs and RMs, to complete the self–assessment, and will more clearly and directly state the requirements of the self– assessment form within regulation.

ANTICIPATED BENEFITS OF THE PROPOSED REGULATIONS The self–assessment form aids licensees in assessing their compliance with federal and state pharmacy law. This proposal will update the form to include laws and regulations adopted since 2014, and remove any laws and regulations superseded or repealed since 2014. Additionally, this proposal will add the requirement for the RM of the 3PL to complete the self–assessment form. Requiring 3PLs to complete the self–assessment will maintain the same level of oversight as when they were licensed as wholesalers.

As the DRIC or RM goes through the biennial process of completing the self–assessment form, they will be made aware of any areas where the wholesaler or 3PL may be out of compliance with laws and regulations. This awareness can increase self–correction and promote compliance with state and federal laws and regulations. This should assist wholesalers and 3PLs in complying with current law; since the laws are designed for consumer protection, consumer protection will be advanced by the licensee’s compliance.

This proposal also allows for a streamlined process for updating the self– assessment form as changes to pharmacy law occur, which will provide a more effective and efficient use of board resources, by reducing the workload associated with the rulemaking process. EVALUATION OF CONSISTENCY AND COMPATIBILITY WITH EXISTING STATE REGULATIONS During the process of developing these regulations and amendments, the Board conducted a search of similar regulations on this topic and concluded that these regulations are neither inconsistent nor incompatible with existing state regulations.

INCORPORATION BY REFERENCE Wholesaler Dangerous Drugs & Dangerous Devices Self–Assessment (17M–26 Rev. 10/14) which is currently incorporated by reference in the same regulation, is being renamed and revised to Wholesaler/Third Party Logistics Provider Self– Assessment (17M–26 Rev. 09/18). DISCLOSURES REGARDING THE PROPOSED ACTION, INCLUDING FISCAL IMPACTS The Board has made the following initial determinations: Mandate on Local Agencies and School Districts : None. Cost to Any Local Agency or School District That Requires Reimbursement Pursuant to Government Code Sections 17500–17630: None.

Costs/Savings to Any State Agency: The proposed regulations do not result in a fiscal impact to the state. The board currently requires wholesalers and 3PLs to complete and submit self– assessments, as specified. The regulations do not increase the number of self–assessments to be submitted or require additional board workload or costs from the current process. Nondiscretionary Costs/Savings to Local Agencies: None. Costs/Savings in Federal Funding to the State: None. Effect on Housing Costs: None.

Business Impact: The board has made an initial determination that the proposed regulatory action would have no significant statewide adverse economic impact directly affecting businesses, including the ability of California businesses to compete with businesses in other states. Cost Impact on Representative Private Person or Business: The agency 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 board currently requires wholesalers and 3PLs to complete and submit self– assessments.

The proposed regulations do not increase the workload or costs for these licensees to comply. Effect on Housing Costs: None. EFFECT ON SMALL BUSINESS The board has made an initial determination that the proposed regulatory action would not have a significant adverse economic impact directly affecting small businesses. While the board does not have specific

CALIFORNIA REGULATORY NOTICE REGISTER 2021, VOLUME NUMBER 38-Z 1293 data to determine if its licensees are a “small business” as defined in Government Code

section 11342.610, the board anticipates that 3PLs are, by their nature, rather large businesses. The proposal makes the regulatory oversight of 3PLs, previously licensed as wholesalers, consistent with the standards for wholesalers. Completion of a self–assessment form is required by existing regulation biennially and based on certain events; the completed forms are also required to be maintained.

The updates will change some of the questions on the forms, but do not ask significantly more questions, it is therefore not anticipated that the licensee will use more time completing, or more space storing, the self–assessment form. As the requirement to complete and maintain these forms already exists in regulations, this proposal, that updates the form used and places some of the requirements, currently contained only in the form, into regulations will not have an impact on businesses.

RESULTS OF ECONOMIC IMPACT ASSESSMENT/ANALYSIS Impact on Jobs/New Businesses: The Board has determined that it is: (1) unlikely that this proposal will create jobs within California; (2) unlikely that this proposal will eliminate jobs within California; (3) unlikely that this proposal will create new businesses within California; (4) unlikely that this proposal will eliminate of existing businesses within California; (5) unlikely that this proposal will expand businesses cur rently doing business in the State of Califor nia.

Benefits of Regulation: The board has determined that this regulatory proposal benefits the health and welfare of California residents and worker safety because the DRICs and RMs in wholesalers and third–party logistics providers both in and outside California will be conducting self–assessments based on current and up–to–date laws, rather than outdated laws, which will make it more likely that they will follow current laws and regulations.

When DRICs/RMs are actively engaged in assessing a facility’s compliance with current laws and regulations, they are more likely to identify and remedy any violations of pharmacy law. The board believes this periodic review and accountability will result in increased consumer safety and improve facility operations with respect to employee safety and the state’s environment. Additionally, this proposal will allow for a more efficient use of board resources during inspections, as compliance should be better, and in updating the forms for the future. The proposal does not impact the state’s environment.

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

Any interested person may present statements or arguments in writing relevant to the above determinations at the address listed for the Contact Person during the written comment period. AVAILABILITY OF RULEMAKING FILE, INCLUDING INITIAL STATEMENT OF REASONS, TEXT OF PROPOSED REGULATIONS, AND INFORMATION The Board will have the entire rulemaking file available for inspection and copying throughout the rulemaking process at its office at the address listed for, and from the person identified as, the contact person below.

The rulemaking file currently includes this notice, the proposed text of the regulations, the documents incorporated by reference, the initial statement of reasons, and all the information upon which the proposal is based. AVAILABILITY OF MODIFIED TEXT If the Board proposes to substantively modify the originally proposed text, it will make the modified text (with the changes clearly indicated) available to the public for at least 15 days before the Board adopts the regulations as revised. Requests for copies of any modified regulations may be sent to the contact person below.

The Board will accept written comments on the modified regulations for 15 days after the date on which they are made available. AVAILABILITY OF THE FINAL STATEMENT OF REASONS All the information upon which the proposed regulations are based is contained in the rulemaking file, which is available for public inspection by contacting the person named below. You may obtain a copy of the final statement of reasons, once it has been prepared, by making a

CALIFORNIA REGULATORY NOTICE REGISTER 2021, VOLUME NUMBER 38-Z 1294 written request to the contact person named below or by accessing the website listed below.

CONTACT PERSON Inquiries or comments concerning the proposed rulemaking action may be addressed to: Name: Lori Martinez Address: 2720 Gateway Oaks Drive Suite 100 Sacramento, CA 95833 Phone Number: (916) 518–3078 Fax Number: (916) 574–8618 E–Mail Address: Lori.Martinez@dca.ca.gov The backup contact person is: Name: Debbie Damoth Address: 2720 Gateway Oaks Drive Suite 100 Sacramento, CA 95833 Phone Number: (916) 518–3090 Fax Number: (916) 574–8618 E–Mail Address: Debbie.Damoth@dca.ca.gov WEBSITE ACCESS Materials regarding this proposal can be found at the Board of Pharmacy’s website: www.pharmacy.ca.gov. TITLE 16.

BOARD OF PHARMACY NOTICE IS HEREBY GIVEN that the California State Board of Pharmacy (Board) is proposing to take the rulemaking action described below under the heading Informative Digest/Policy Statement Overview. Any person interested may present statements or arguments relevant to the action proposed in writing. Written comments, including those sent by mail, facsimile, or e–mail to the addresses listed under Contact Person in this Notice, must be received by the Board at its office by November 1, 2021. The Board has not scheduled a public hearing on this proposed action.

The Board will, however, hold a hearing if it receives a written request for a public hearing from any interested person, or his or her authorized representative, no later than 15 days prior to the close of the written comment period. The Board may, after considering all timely and relevant comments, adopt the proposed regulations substantially as described in this notice, or may modify the proposed regulations if such modifications are sufficiently related to the original text.

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

Section 4005 of the Business and Professions Code (BPC) authorizes the Board to adopt this regulation. The proposed regulation implements, interprets, and makes specific sections 4081, 4104, and 4332 of the Business and Professions Code. INFORMATIVE DIGEST/POLICY STATEMENT OVERVIEW The Board is a state agency vested with the authority to regulate the pharmacy industry, including pharmacies, clinics, and pharmacists. The Board’s mandate and its mission is to protect the public (BPC

section 4001.1). On April 1, 2018, the Board’s regulation, 16 Title, California Code of Regulations (CCR)

section 1715.65, establishing the requirement for pharmacies and clinics to perform inventory reconciliation activities to detect and prevent the loss of controlled substances became effective. In July 2019, the Board began a post–implementation review of the regulation to determine if any changes should be considered. During discussions with stakeholders at several Board meetings, the Board determined that the regulatory language should be amended.

This proposed regulation will clarify what an inventory reconciliation is and define “inventory activities.” It will identity four non–Schedule II controlled substances (Alprazolam, 1 milligram/ unit, Alprazolam, 2 milligrams/unit, Tramadol, 50 milligrams/unit, and Promethazine/codeine, 6.25 milligrams of promethazine and 10 milligrams of codeine per 5 milliliters of product) that will require an inventory at least once every twelve months, and specify that all other controlled substances must have an inventory completed within 3 months of a discovered loss and at least once every two years, when no loss is found.

Additionally, the proposal will require that all individuals involved in completing the inventory or preparing the report be identified, and that the individual who performs the inventory to sign and date it. Furthermore, this proposal will allow for the use of a digital, electronic, or biometric identifier in lieu of a physical signature if a printed signed statement confirming the accuracy of the report is retained according to existing retention requirements. Finally, the proposal will clarify the inventory requirements for an inpatient hospital pharmacy where drugs are stored within a drug storage area

CALIFORNIA REGULATORY NOTICE REGISTER 2021, VOLUME NUMBER 38-Z 1295 under the pharmacy’s control and for the inventory of an automated drug delivery system (ADDS) within the inpatient hospital. ANTICIPATED BENEFITS OF THE PROPOSED REGULATIONS This proposal will require pharmacies and clinics to perform a physical count inventory at least once every twelve months for four non–Schedule II controlled substances. According to the National Council on Alcoholism and Drug Dependence, Inc., the availability of opioids is partly the cause of the epidemic misuse of prescription medication. By requiring the inventory of the four non–

Schedule II controlled substances yearly and of other non–Schedule II controlled substances biennially, pharmacists and pharmacies will be better equipped to spot and stop employee drug diversion from the pharmacy earlier and prevent excessive drug losses from occurring. This will reduce the supply of controlled substances available for misuse and abuse without denying pain relief for those that need it. Additionally, the proposal will improve clarity among the regulated public and ensure that complete and accurate inventories are being completed.

CONSISTENCY AND COMPATIBILITY WITH EXISTING STATE REGULATIONS During the process of developing these regulations and amendments, the Board conducted a search of similar regulations on this topic and concluded that these regulations are neither inconsistent nor incompatible with existing state regulations. FISCAL IMPACT AND RELATED ESTIMATES Fiscal Impact on Public Agencies Including Costs/ Savings to State Agencies or Costs/Savings in Federal Funding to the State: None. The Board will ensure facilities comply with the regulations through routine inspections and no additional workload or costs are anticipated.

Nondiscretionary Costs/Savings to Local Agencies: None. Local Mandate: None. Cost to Any Local Agency or School District for Which Government Code Sections 17500–17630 Require Reimbursement: None. Business Impact: The Board has made an initial determination that the proposed regulatory action would have no significant statewide adverse economic impact directly affecting businesses and/or employees. This initial determination is based on the absence of testimony to that effect during the development of the proposed regulation, which occurred over several months.

Additionally, pharmacies and clinics are currently required to perform an inventory reconciliation on all

Schedule II controlled substances. While this proposal does add an additional four controlled substances that must be inventoried, the Board does not anticipate an impact on businesses from this additional requirement. The Board notes that the proposed regulation does not require the use of specific computer software. The inventory counts are to be completed by hand and can be recorded using pen and paper or basic computer spreadsheet software that the pharmacy currently utilizes.

Cost Impact on Representative Private Person or Business: The Board is not aware of any cost impacts that representative private persons or businesses would necessarily incur in reasonable compliance with proposed action. The Board indicates approximately 8,800 licensees would be subject to the proposed requirements, of which approximately 453 (or 5 percent) do not use PIS and will need to hand count. These locations may need to

schedule additional staffing hours for these purposes, which could result in minor additional costs. Effect on Housing Costs: None. EFFECT ON SMALL BUSINESS While the Board does not have nor does it maintain data to determine if any of its licensees (pharmacies and clinics) are a “small business” as defined in Government Code

section 11342.610, the Board has made an initial determination that the proposed regulatory action would not have a significant adverse economic impact directly affecting small businesses. Although the proposed regulation will directly affect businesses statewide, which may include small businesses, the Board concludes that the adverse economic impact, including the ability of California businesses to compete with businesses in other states, will not be significant. RESULTS OF ECONOMIC IMPACT ASSESSMENT/ANALYSIS Impact on Jobs/New Businesses: The Board concludes that: (1) this proposal will not create jobs within California; (2) this proposal will not eliminate jobs within California;

CALIFORNIA REGULATORY NOTICE REGISTER 2021, VOLUME NUMBER 38-Z 1296 (3) this proposal will not create new businesses within California; (4) this proposal will not eliminate existing businesses within California; (5) this proposal will not expand businesses currently doing business in the State of California. Benefits of Regulation: The Board has determined that this regulatory proposal will benefit the health and welfare of California residents and worker safety because the proposed regulation will require better inventory and control of controlled substances.

By reducing the amount of controlled substances diverted, it will reduce the number of drugs being misused and abused. This will result in improved health for Californians. Additionally, the job accidents may decrease if fewer employees and/or co–workers are working under the influence of a misused or abused controlled substance. The proposed regulation will not impact the state’s environment.

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

Any interested person may present statements or arguments in writing relevant to the above determinations at the address listed for the Contact Person during the written comment period. INITIAL STATEMENT OF REASONS AND INFORMATION The Board has prepared an initial statement of the reasons for the proposed action and has available all the information upon which the proposal is based.

TEXT OF PROPOSAL Copies of the exact language of the proposed regulations, and any document incorporated by reference, and of the initial statement of reasons, and all of the information upon which the proposal is based, may be obtained upon request from the Board of Pharmacy at 2720 Gateway Oaks Drive, Suite