California Regulatory Notice Register — Register 2018, No. 31-Z (August 03, 2018)

Cal. Reg. Notice Reg. 2018, No. 31

California Z Register

REGISTER (Continued on next page) Time- Dated Material EDMUND G. BROWN, JR., GOVERNOR OFFICE OF ADMINISTRATIVE LAW 2018, NO. 31−Z PUBLISHED WEEKLY BY THE OFFICE OF ADMINISTRATIVE LAW AUGUST 3, 2018 PROPOSED ACTION ON REGULATIONS TITLE 2. DEPARTMENT OF HUMAN RESOURCES Statutory Appeals Unit Regulations — Notice File No. Z2018−0723−03 ................................. 1199 TITLE 2. FAIR POLITICAL PRACTICES COMMISSION Conflict−of−Interest Code — Notice File No. Z2018−0724−02 ........................................ 1202 Amendment State Agency: State Board of Education TITLE 2.

STATE PERSONNEL BOARD Applications, Transfers, and Special Assignments — Notice File No. Z2018−0724−05 ..................... 1203 TITLE 4. CALIFORNIA HORSE RACING BOARD Altering of Sex of Horse — Notice File No. Z2018−0720−03 .......................................... 1205 TITLE 4. CALIFORNIA HORSE RACING BOARD Penalties for Medication Violations — Notice File No. Z2018−0720−04 ................................. 1210 TITLE 5. COMMISSION ON TEACHER CREDENTIALING Conflict−of−Interest Code — Notice File No. Z2018−0723−02 ........................................ 1213 TITLE 5.

EDUCATION AUDIT APPEALS PANEL Audit of K−12 Local Educations Agencies (LEAs) — Fiscal Year (FY) 2018−19 — Notice File No. Z2018−0723−01 ................................................................ 1214 TITLE 9. DEPARTMENT OF STATE HOSPITALS Patient Electronic Property — Notice File No. Z2018−0724−04 ....................................... 1217 TITLE 10. DEPARTMENT OF INSURANCE Average Contracted Rate Methodology — Notice File No. Z2018−0724−03 .............................. 1223 TITLE 11. COMMISSION ON PEACE OFFICER STANDARDS AND TRAINING Training and Testing Specifications — Notice File No.

Z2018−0724−11 ................................. 1228

TITLE 16. BOARD OF PHARMACY Compounded Drug Preparations — Notice File No. Z2018−0719−01 ................................... 1230 TITLE MPP/22. DEPARTMENT OF SOCIAL SERVICES Safe Sleep Regulations — Notice File No.

Z2018−0724−01 ........................................... 1233 GENERAL PUBLIC INTEREST DEPARTMENT OF FISH AND WILDLIFE California Endangered Species Act Consistency Determination No. 2080−2018−007−03, California State Water Project Delta Facilities and Operations, California Delta and Central Valley .................. 1236 DEPARTMENT OF FISH AND WILDLIFE California Endangered Species Act (CESA) Consistency Determination Request for Elsie Gridley Mitigation Bank Phase 3 Restoration Pr oject 2080−2018−008−03, Solano County ........................ 1239 DEPARTMENT OF FISH AND WILDLIFE Research and Recovery — San Francisco Garter Snake .............................................. 1240 DEPARTMENT OF FISH AND WILDLIFE Research on the Salt−Marsh Harvest Mouse — Katherine R.

Smith, U.C. Davis .......................... 1240 OCCUPATIONAL SAFETY AND HEALTH STANDARDS BOARD Public Meeting and Business Meeting ........................................................... 1241 PROPOSITION 65 OFFICE OF ENVIRONMENTAL HEALTH HAZARD ASSESSMENT Proposition 65 NOIM — Alcoholic Beverages ..................................................... 1241

SUMMARY OF REGULATORY ACTIONS Regulations filed with the Secretary of State ........................................................ 1243 Sections Filed, February 21, 2018 to July 25, 2018 .................................................. 1244 The California Regulatory Notice Register is an official state publication of the Office of Administrative Law containing notices of proposed regulatory actions by state regulatory agencies to adopt, amend or repeal regulations contained in the California Code of Regulations.

The effective period of a notice of proposed regulatory action by a state agency in the California Regulatory Notice Register shall not exceed one year [Government Code § 11346.4(b)]. It is suggested, therefore, that issues of the California Regulatory Notice Register be retained for a minimum of 18 months. CALIFORNIA REGULA TORY NOTICE REGISTER is published weekly by the Office of Administrative Law, 300 Capitol Ma ll, 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 2018, VOLUME NO. 31-Z 1199 PROPOSED ACTION ON REGULATIONS Information contained in this document is published as received from agencies and is not edited by Thomson Reuters. TITLE 2. DEPARTMENT OF HUMAN RESOURCES DIVISION 1,

CHAPTER 3, SUBCHAPTER 1

ARTICLE 25 — HEARINGS The California Department of Human Resources (CalHR) proposes to amend and adopt regulations as described below after considering all comments, objec- tions, or recommendations regarding the proposed reg- ulatory action. PUBLIC HEARING CalHR has not scheduled a public hearing on this pro- posed action. However, CalHR will hold a hearing if it receives a written request for a public hearing from any interested person, or his/her authorized representative, no later than fifteen (15) days before the close of the written comment period.

WRITTEN COMMENT PERIOD Any interested person, or his/her authorized repre- sentative, may submit written comments relevant to the proposed rulemaking to CalHR. All comments will be considered if received by 5:00 p.m. on September 17, 2018, the closure of the comment period.

Please submit comments to: Stanley Marubayashi California Department of Human Resources Legal Division 1515 “S” Street, North Building, Suite 500 Sacramento, California 95811 or stanley.marubayashi@calhr.ca.gov ADOPTION OF PROPOSALS Following the public hearing, if any, CalHR may thereafter adopt proposals that are in substantially the same form as those described below and modify pro- posals if the modifications are sufficiently related to the original text. The full text of any modified proposal will be made available for fifteen (15) days prior to their adoption, unless merely technical or grammatical changes.

Modified proposals will also be mailed to those persons who: 1) submit written comments related to the proposals; 2) provide oral comments at the public hearing; or 3) request notification of any changes to the proposal. AUTHORITY AND REFERENCE Government Code sections 18502, 19815.4(

d) and 19815.4(

e) authorize CalHR to adopt proposed regula- tions to the California Code of Regulations, title 2, Di- vision 1,

Chapter 3, Subchapter 1,

Article 25. These proposed amendments implement and refer to the fol- lowing statutes and case law: Code of Civil Procedure sections 1985, 1985.1. Evidence Code sections 205, 210, 350, 401, 500, 602, and 915. Government Code sections 18502, 18672, 18672.1, 18673, 18674, 19579, 19815.4(d), and 19815.4(e). Government Code sections 19832, 19836, 19837, 19841, 19992.14, 19994−19994.4, 19996.1, 19996.2, 19997−19997.14, 19998, and 19998.1. Government Code sections 11400 through 11475.70. Gonzalez v . SPB (1977) 76 Cal.App.3d 364.

REGULATIONS SECTIONS AFFECTED CalHR is proposing to amend sections 599.894, 599.895, 599.896, 599.897, 599.898, 599.903, 599.904, 599.905, 599.906, 599.907, 599.908, 599.909, and 599.910. CalHR is proposing to adopt sections 599.894.1, 599.894.2, 599.895.1, 599.897.1, 599.899, 599.900, 599.901, 599.902 and 599.909.1. INFORMATIVE DIGEST/POLICY STATEMENT OVERVIEW Government Code

section 18502, added by Gov. Re- org. Plan No. 1 of 2011, created the California Depart- ment of Human Resources which succeeds to and is vested with all of the powers and duties exercised and performed by the Department of Personnel Administra- tion. Government Code

section 19815.4(

d) authorizes CalHR to formulate, adopt, amend or repeal rules, regu- lations and general policies affecting the purposes, re-

CALIFORNIA REGULATORY NOTICE REGISTER 2018, VOLUME NO. 31-Z 1200 sponsibilities and jurisdiction of CalHR. Government Code

section 19815.4(

e) requires CalHR to hold hear- ings, subpoena witnesses, administer oaths, and con- duct investigations concerning all matters relating to CalHR’s jurisdiction. The proposed regulations will clarify the appeals process under these statutes. The broad objective of these regulations is to comply with Gov. Reorg. Plan No. 1 of 2011 and to benefit any State Civil Service employee, appointing power and/or their representatives, in filing an appeal with or making an appearance before the Statutory Appeals Unit, which is a quasi−judicial forum.

CalHR, through these pro- posed regulations, will clearly define the types of hear- ings processed by the Statutory Appeals Unit, identify the powers and duties of the Statutory Appeals Unit’s Administrative Law Judge, and make explicit the method for computing time limits under the regula- tions. The proposed regulations clarify the procedures for requesting subpoenas and preparing a case for hear- ing.

The proposed regulations explain terms, outline the process for requesting hearing audio copies or the certi- fied administrative record, and make it easier for self− represented employees to exercise relevant due process rights. The proposed regulations provide for reasonable accommodation and interpreter services. Existing regulations, amended in 2004 by CalHR’s predecessor, the Department of Personnel Administra- tion, define terms, identify elements of an appeal, and set forth time limits for filing an appeal.

These proposed regulations will further define terms relevant to the CalHR hearing process, provide additional

definitions of hearing procedures, outline the continuance and pre− hearing conference processes, and explain the proce- dural requirements and ramifications of failure to present a prima facie case or appear at a duly scheduled evidentiary hearing. The proposal also provides defini- tive guidance for employees who are incarcerated and/ or voluntarily resigned under Government Code sec- tion 19996.2; clarifies the making and basis of the ad- ministrative record; explains how to file a request for reasonable accommodation and interpreter services; and incorporates excluded employees appeal rights.

Currently, CalHR relies on portions of the Adminis- trative Procedure Act (APA) which regulates formal and informal administrative hearings of State of Cali- fornia agencies, departments, commissions and boards. Although no changes are proposed to the portions of the APA previously adopted, these proposed regulations further outline and explain the CalHR hearing process. Additionally, CalHR proposes to adopt the California appellate court ruling in Gonzalez v.

SPB (1977) 76 Cal.App.3d 364 which defined “good cause” to formal- ize its criteria required for continuances, pre−hearing conferences and late−filed appeals. These proposed regulations are not inconsistent or in- compatible with existing state regulations. After con- ducting an evaluation for any other regulations in this area, CalHR has concluded that these regulations are the only regulations dealing with the procedures and rules of CalHR’s Statutory Appeals Unit. Therefore, the proposed regulations are neither inconsistent nor in- compatible with existing state regulations.

DISCLOSURES REGARDING THE PROPOSED REGULATIONS The Department has made the following initial determinations: Mandate on local agencies and school districts: CalHR has determined these proposed regulations pertain only to State of California Civil Service em- ployees and do not impose a mandate on local govern- ments, state agencies or school districts. CalHR has made a policy determination that there is no mandate imposed on local agency or school district that requires reimbursement pursuant to Government Code

section 17500 et seq. Cost or savings to any state agency: The proposed regulations are not anticipated to add any costs to state agencies because the proposed regula- tions do not mandate a new program or higher level of service. These proposed regulations merely regulate the procedures applicable to CalHR’s appeal and hearing process which have been in place for two decades. Cost to any local agency or school district which must be reimbursed in accordance with Government Code sections 17500 through 17630: None. Other nondiscretionary cost or savings imposed on local agencies: None.

Cost or savings in federal funding to the state: None. Significant, statewide adverse economic impact directly affecting business, including the ability of California businesses to compete with businesses in other states: None. These regulations only affect the procedures applicable to CalHR’s appeal and hearing process. Cost impacts on a representative private person or business: CalHR has made an initial determination there are no cost impacts that a representative person or business would necessarily incur in reasonable compliance with the proposed action.

CalHR is not aware of any cost im- pacts that a representative private person or business

CALIFORNIA REGULATORY NOTICE REGISTER 2018, VOLUME NO. 31-Z 1201 would necessarily incur in reasonable compliance with the proposed action. Small Business Impact: None. These regulations only affect CalHR’s appeal and hearing processes for state employees, their em- ployers, and their representatives. Impact on Reporting: None. The proposed action does not require the mak- ing of any reports. Effect on Housing Costs: None.

RESULTS OF THE ECONOMIC IMPACT ANALYSIS CalHR has also determined these proposed regula- tions will not: • Create/eliminate California jobs. • Create/eliminate California businesses. • Expand existing California businesses. • Have an adverse effect on the health and welfare of California residents, worker safety, or the State’s environment. These proposed regulations have no impact on busi- nesses because they apply only to State Civil Service employees and merely regulate procedures applicable to CalHR’s appeal and hearing process.

CalHR has de- termined that the proposed regulations will not affect the creation or elimination of jobs in California. CalHR has determined the proposed regulations will benefit state employees, state agencies and their repre- sentatives and promote fairness and efficiency to the hearing process.

CONSIDERATION OF ALTERNATIVES CalHR must determine that no reasonable alternative considered by the agency, or that has otherwise been identified and brought to the attention of the agency: • 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.

CONTACT PERSONS Inquiries concerning the proposed regulations may be directed to: Stanley Marubayashi, Labor Relations Counsel California Department of Human Resources Legal Division 1515 S Street, suite 500 Sacramento, CA 95811 916−324−0512 Stanley.Marubayashi@calhr.ca.gov The designated back−up contact person shall be: Karla Broussard−Boyd, Administrative Law Judge California Department of Human Resources Statutory Appeals Unit 1515 S Street, suite 500 Sacramento, CA 95811 916−324−3857 Karla.Broussard−Boyd@calhr.ca.gov A V AILABILITY OF STATEMENTS CalHR’s Statutory Appeals Unit shall have the entire rulemaking file available for inspection and copying throughout the rulemaking process at its office located at: 1515 S Street, North Building, Suite 500 Sacramento, California 95811 As of the date this notice is published in the California Regulatory Notice Register, the rulemaking file con- sists of this Notice, the Proposed Text of the Regula- tions, and the Initial Statement of Reasons.

Any substantial changes to the original proposed reg- ulations shall be available at least fifteen (15) days prior to the adoption, repeal or amendment of the resulting regulation. A V AILABILITY OF DOCUMENTS The Internet Copies of the Notice of Proposed Rulemaking, the Initial Statement of Reasons, and the Proposed Text of the Regulations in strikeout and underline format may be accessed through the CalHR website at: http://www.cal.hr.ca.gov/Pages/public−notice.aspx. Changed or Modified Text After considering timely and relevant comments, CalHR may adopt the proposal substantially as de- scribed in this notice.

Any modifications which are suf- ficiently related to the original proposed regulation will be available to the public for at least fifteen (15) days before CalHR adopts the revised regulations. CalHR will accept written comments on the modified regula- tions for fifteen (15) days after the date on which they are made available to the public. Final Statement of Reasons When complete, the Final Statement of Reasons may be obtained by contacting Stanley Marubayashi at the

CALIFORNIA REGULATORY NOTICE REGISTER 2018, VOLUME NO. 31-Z 1202 address noted above, or through the CalHR website at: http://www.cal.hr.ca.gov/Pages/public−notice.aspx. TITLE 2.

FAIR POLITICAL PRACTICES COMMISSION NOTICE IS HEREBY GIVEN that the Fair Political Practices Commission, pursuant to the authority vested in it by Sections 82011, 87303, and 87304 of the Gov- ernment Code to review proposed conflict−of−interest codes, will review the proposed/amended conflict−of− interest codes of the following: CONFLICT−OF−INTEREST CODES AMENDMENT STATE AGENCY: State Board of Education A written comment period has been established com- mencing on August 3, 2018, and closing on September 17, 2018.

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

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

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

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

s) to the agency for revision and re− submission within 60 days without further notice. Any interested person may present statements, argu- ments or comments, in writing to the Executive Direc- tor of the Commission, relative to review of the pro- posed conflict−of−interest code(s). Any written com- ments must be received no later than September 17, 2018. 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 in- creased costs to local government which may result from compliance with these codes because these are not new programs mandated on local agencies by the codes since the requirements described herein were mandated by the Political Reform Act of 1974. Therefore, they are not “costs mandated by the state” as defined in Govern- ment Code

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

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

s) should be made to Brianne Kilbane, Fair Political Practices Commission, 1102 Q Street, Suite 3000, Sacramento, California 95811, telephone (916) 322−5660. A V AILABILITY OF PROPOSED CONFLICT−OF−INTEREST CODES Copies of the proposed conflict−of−interest codes may be obtained from the Commission offices or the re- spective agency. Requests for copies from the Commis- sion should be made to Brianne Kilbane, Fair Political Practices Commission, 1102 Q Street, Suite 3000, Sacramento, California 95811, telephone (916) 322−5660.

CALIFORNIA REGULATORY NOTICE REGISTER 2018, VOLUME NO. 31-Z 1203 TITLE 2. STATE PERSONNEL BOARD Notice is hereby given that the State Personnel Board (Board) proposes to adopt the regulatory changes described below. The Board will consider any and all comments, objections, or recommendations that may be timely submitted regarding this proposed action. PUBLIC HEARING A public hearing regarding the proposed regulatory action will be held on September 20, 2018, at 10:00 a.m. in Room 150 at 801 Capitol Mall, Sacramento, California.

WRITTEN COMMENT PERIOD The written comment period closes on September 17, 2018, at 5:00 p.m. Any interested party, or his or her du- ly authorized representative, may submit written com- ments relevant to the proposed regulatory action to the contact person listed below. Dorothy B. Egel Senior Attorney State Personnel Board 801 Capitol Mall, MS 53 Sacramento, CA 95814 Fax: (916) 653−4256 Email: dorothy.egel@spb.ca.gov Comments must be received by the contact person no later than 5:00 p.m. on September 17, 2018.

AUTHORITY AND REFERENCE The Board proposes to adopt the proposed action un- der the authority granted by the California Constitution,

article VII, sections 3 and 5, and Government Code sec- tions 18502, 18660, 18701, 19050, 19050.4, 19050.8, 19083, 19889, and 19889.2 in order to implement, in- terpret, and make specific the provisions of California Constitution,

article VII,

section 1 and Government Code sections 18500, 18546, 18547, 18525.3, 18930, 18933, 18934, 19050, 19050.3, 19050.4, 19050.8, 19230, 19702.2, and 19889.2. INFORMATIVE DIGEST/POLICY STATEMENT OVERVIEW A.

Summary of Existing Laws and Regulations Related to the Proposed Action The Board is a constitutional body responsible for en- forcing California’s civil service statutes. (Cal. Const., art. VII, § 3.) In addition, the Board, by majority vote of all its members, prescribes probationary periods and classifications, adopts other rules authorized by statute, and reviews disciplinary actions imposed against state employees. (Ibid.) The Board also establishes rules im- plementing and enforcing the merit principle in the state civil service system. (Gov. Code, § 18660; see Cal. Const., art.

VII, § 1, subd. (b).) Regulations adopted by the Board are exempt from the Administrative Procedure Act (APA), except as ex- pressly specified. (Gov. Code, §§ 18211, 18215, & 18216.) The Board’s regulations concerning selection, examinations, and classification may be adopted by the Board without public notice or comment; however, reg- ulations related to selection and examinations shall be reasonably available to all interested parties. (Gov. Code, § 18213.) The rulemaking procedures set forth in Government Code

section 18214 apply to the adoption of Board regulations concerning other matters. In this instance, the subject matter of the proposed regulations relates to examinations and selection. These regulations are thus exempt from the APA process; however, the Board finds that a public comment period would be appropriate for this regulatory action. B. Comparable Federal Regulations or Statutes The Board has conducted a review of federal regula- tions and statutes and determined there are no compara- ble federal regulations or statutes. C.

Policy Statement Overview With advancements in technology, online state civil service examinations and online application systems are available. Mobile bar codes are also used by many individuals when mailing envelopes. The Board’s cur- rent regulatory scheme does not include any process and procedure related to these advances.

As to civil ser- vice examination announcements and applications and job announcements and applications, this proposed reg- ulatory action will update the Board’s rules to include standards relative to online examinations, online appli- cation systems, and the use of mobile bar codes on en- velopes. This regulatory action will also conform the Board’s regulations to Government Code

section 18934. In addition, this regulatory action will clarify the length of time an appointing power can hold an employ- ee who has accepted a new civil service appointment. To ensure that limited term appointments are properly used, this regulatory action will require written justifi- cations for limited term positions. Regarding transfers, this regulatory action maintains the same standards for salary calculations and compar- isons as the Board’s current regulations; however, the action will clarify the Board’s regulations related to transfers by adding a definition

section and standards for deep class transfers. The regulatory action will also

CALIFORNIA REGULATORY NOTICE REGISTER 2018, VOLUME NO. 31-Z 1204 clarify when movement of an employee should be con- sidered a transfer or reinstatement, thus promoting con- sistent and uniform personnel transactions. The Board’s current regulations do not address whether employees with temporary or limited term sta- tus may use their temporary or limited term status as a basis for transfer. This regulatory action clarifies that temporary or limited term status may not be used as a basis for transfer.

Further, this regulatory action simpli- fies and streamlines the use of temporary assignments and loans, which will also serve to promote upward mobility. Other changes are technical for purposes of style and consistency. D. Evaluation of Consistency and Compatibility with Existing State Regulations In reviewing other state regulations, the Board found that the instant regulatory proposal is consistent and compatible with existing state regulations.

DETERMINATION OF FISCAL IMPACT ON PUBLIC AGENCIES 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 must be reimbursed in accordance with Government Code sections 17500 through 17630: None. • Cost or savings to any State agency: This proposed regulatory package is intended to clarify and update the Board’s regulations and make more simplified and streamlined the procedures for temporary assignments and loans.

Therefore, the Board expects that any costs or savings to State agencies will be minimal, if any. • Other nondiscretionary cost of savings imposed on local agencies: None. • Cost or savings in federal funding to the State: None. SIGNIFICANT EFFECT ON HOUSING COSTS None. ECONOMIC IMPACT ON BUSINESS • Significant, statewide adverse economic impact directly affecting businesses including the ability of California businesses to compete with businesses in other states: None. • Effect on small business: The proposed regulations only set standards related to state civil service examinations and selection.

Accordingly, it has been determined that the adoption of the proposed regulations would not affect small businesses in any way. DESCRIPTION OF COST IMPACT The Board is not aware of any cost impacts that a rep- resentative private person or business would necessari- ly incur in reasonable compliance with the proposed action. RESULTS OF ECONOMIC IMPACT ASSESSMENT Adoption of these regulations will not: 1. Create or eliminate jobs within California. 2. Create new businesses or eliminate existing businesses within California. 3. Affect the expansion of businesses currently doing business within California. 4.

Affect worker safety or the state’s environment. It is expected that the adoption of this regulatory package will have a positive impact on the general health and welfare of California residents in that the benefits of this proposed regulatory action include sim- plifying and streamlining procedures related to tempo- rary assignments and loans, which will also promote upward mobility. CONTACT PERSONS Inquiries concerning the proposed regulatory action, including questions regarding procedure, comments, or the substance of the proposal, may be directed to: Dorothy B.

Egel Senior Attorney State Personnel Board 801 Capitol Mall, MS 53 Sacramento, CA 95814 Phone: (916) 653−1403 Fax: (916) 653−4256 Email: dorothy.egel@spb.ca.gov

CALIFORNIA REGULATORY NOTICE REGISTER 2018, VOLUME NO. 31-Z 1205 In the event the contact person is unavailable, in- quiries regarding the proposed action may be directed to the following backup contact person: Alvin Gittistriboongul Chief Counsel State Personnel Board 801 Capitol Mall, MS 53 Sacramento, CA 95814 Phone: (916) 653−1403 Alvin.gittisriboongul@spb.ca.gov Please direct requests for copies of the proposed text of the regulations, the initial statement of reasons, or other information upon which the rulemaking is based to Senior Attorney Egel at the above address.

A V AILABILITY OF RULEMAKING FILE The Board is maintaining a rulemaking file for the proposed regulatory action, which as of the date of this notice contains the following: 1. A copy of the text of the regulations for which the adoption is proposed in strikeout and underline; 2. A copy of this notice and statement of reasons for the proposed adoption; and 3. Any factual information upon which the proposed rulemaking is based. If written comments, data or other factual informa- tion, studies or reports are received, they will be added to the rulemaking file.

The file is available for public in- spection during normal working hours at the State Per- sonnel Board, 801 Capitol Mall, Sacramento, CA 95814, Fax: (916) 653−4256. Items 1 through 3 are also available on the Board’s website at www.spb.ca.gov under “What’s New?” Copies may be obtained by con- tacting the person via the address, email, or phone num- ber listed above. A V AILABILITY OF CHANGED OR MODIFIED TEXT After considering all timely and relevant comments received, the Board may adopt the proposed regulations substantially as described in this notice.

If the Board makes modifications that are sufficiently related to 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. Please send requests for copies of any modified regulations to the attention of the per- son at the address indicated above. The Board will ac- cept written comments only on the modified regulations for 15 days after the date on which they are made avail- able to the public.

A V AILABILITY OF THE FINAL STATEMENT OF REASONS It is anticipated that the proposed regulations will be filed with the Office of Administrative Law and shall include a Final Statement of Reasons. Copies of the Fi- nal Statement of Reasons may be obtained from the contact person when it becomes available. A V AILABILITY OF DOCUMENTS ON THE INTERNET Copies of the Notice of Proposed Action, the Initial Statement of Reasons, and the text of the regulations in underline and strikeout can be accessed on the Board’s website at www.spb.ca.gov under “What’s New?” TITLE 4.

CALIFORNIA HORSE RACING BOARD TITLE 4, DIVISION 4, CALIFORNIA CODE OF REGULATIONS NOTICE OF PROPOSAL TO AMEND RULE 1865, ALTERING OF SEX OF HORSE The California Horse Racing Board (Board/CHRB) proposes to amend the regulation described below after considering all comments, objections or recommenda- tions regarding the proposed action. PROPOSED REGULATORY ACTION The Board proposes to amend Rule 1865, Altering of Sex of Horse. The proposed amendment modifies sub-

section 1865(e)(1) to remove the $1,000 minimum fine specifically levied on a trainer if the true sex of the horse he or she has entered to race is not correctly identified in the official program. In place of the minimum $1,000 fine, subsection 1865(e)(1) will provide that if the true sex of the horse is not identified in the official program, the responsible party may be sanctioned by the stew- ards.

Subsection 1865(e)(2) has been changed to pro- vide that if a horse has started in a race, and then has been altered prior to starting in a subsequent race, the stewards shall declare the horse from the race if the pub- lic is not informed of its true sex prior to the opening of wagering for the race in which it is entered. (To “de- clare” a horse from a race means the horse is removed from the race.) The proposed amendment to Rule 1865 deletes subsections 1865(e)(3) and 1865(e)(3)(A). The deleted subsections are no longer necessary, as the $1,000 minimum fine under subsection 1865(e)(1) has been eliminated.

PUBLIC HEARING The Board will hold a public hearing starting at 9:30 a.m., Thursday, September 27, 2018, or as soon after

CALIFORNIA REGULATORY NOTICE REGISTER 2018, VOLUME NO. 31-Z 1206 that as business before the Board will permit, at the Los Alamitos Race Course, 4961 Katella Avenue, Los Alamitos, California. At the hearing, any person may present statements or arguments orally or in writing about the proposed actions described in the informative digest. It is requested, but not required, that persons making oral comments at the hearing submit a written copy of their testimony.

WRITTEN COMMENT PERIOD Any interested persons, or their authorized represen- tative, may submit written comments about the pro- posed regulatory actions to the Board. The written com- ment period closes at 5:00 p.m., on September 17, 2018. The Board must receive all comments at that time; however, written comments may still be submit- ted at the public hearing.

Submit comments to: Harold Coburn, Regulation Analyst California Horse Racing Board 1010 Hurley Way, Suite 300 Sacramento, CA 95825 Telephone (916) 263−6026 Fax: (916) 263−6022 Email: HaroldC@chrb.ca.gov AUTHORITY AND REFERENCE Authority cited: Sections 19420, 19440, 19460 and 19562, Business and Professions Code. Reference: Sections 19420, 19562 and 19661, Business and Pro- fessions Code.

Business and Professions Code sections 19420, 19440, 19460 and 19562 authorize the Board to adopt the proposed regulation, which would implement, in- terpret or make specific sections 19420, 19562 and 19661, Business and Professions Code. INFORMATIVE DIGEST/POLICY STATEMENT OVERVIEW Business and Professions Code

section 19420 pro- vides that jurisdiction and supervision over meetings in California where horse races with wagering on their re- sults are held or conducted, and over all persons or things having to do with the operation of such meetings, is vested in the CHRB. Business and Professions Code

section 19440 provides that the Board shall have all powers necessary and proper to enable it to carry out fully and effectually the purposes of this chapter. Re- sponsibilities of the Board shall include, but not be lim- ited to, adopting rules and regulations for the protection of the public and the control of horse racing and pari− mutuel wagering. Business and Professions Code sec- tion 19460 provides that all licenses granted under this

chapter are subject to all rules, regulations, and condi- tions prescribed by the Board. Business and Professions Code

section 19562 provides that the Board may pre- scribe rules, regulations, and conditions, consistent with the provisions of this chapter, under which all horse races with wagering on their results shall be con- ducted in this State. Business and Professions Code sec- tion 19661 states unless otherwise expressly provided, the Board may impose a monetary penalty of not more than one hundred thousand dollars ($100,000) for a vio- lation of any of the provisions of this chapter. It is widely acknowledged within the horseracing in- dustry that gelding has its benefits.

While male horses generally are not fully mature until two years of age, they may begin to reach sexual maturity around 12 to 14 months. At a little over one year old, male horses can start to show interest in fillies and become challenging for handlers. Colts can become fractious, fight their handlers, and lose focus if they think a filly is near. As a group, colts tend to be contrary which makes them diffi- cult to train.

A colt’s behavior may not be safe for horse- men or the horse, and can become more problematic if it injures itself and requires stall rest and controlled exer- cise for an extended period of time. The injured colt is likely to chafe under the confining regimen. In addition to behavioral problems, the gelding pro- cedure may have practical health considerations. Some- times gelding will help the horse lose some weight and keep it sounder.

This can be significant because as the male horse matures, testosterone in its system predis- poses it to build extra muscle mass and retain more fat; the growth pattern can outstrip the maturity of the horse’s joints. Some male horses may have testicular abnormalities. Cryptorchidism, the failure of one or both testes to descend into a normal scrotal position from the abdominal cavity, is an example. Stallions can still produce normal amounts of testosterone. Such horses are called ridglings and should not be used for breeding.

Regardless of the reasons for gelding a racehorse, the proper identification of a gelding is most important to the wagering public when a horse has been gelded be- tween starts. Some believe a gelding’s performance im- proves significantly in the start after the horse has been gelded, because in its un−altered state, the horse might not have been training as well, performing below his ability, and refusing to put out an honest effort. When the true sex of a horse entered to race is not reported, horseplayers claim the misinformation cost them a valuable data point in evaluating the horse for wagering purposes.

Rule 1865 currently provides that a trainer who enters a horse, or who causes a horse to be entered on his be-

CALIFORNIA REGULATORY NOTICE REGISTER 2018, VOLUME NO. 31-Z 1207 half, is responsible for ensuring that the true sex of the entered horse is listed on its certificate of registration on file in the racing office. If the true sex of a horse is not correctly identified in the official program for the race in which the horse is entered, the trainer of the horse shall be subject to a minimum fine of $1,000. The $1,000 penalty was added in 2009, as the Board be- lieved it would cause trainers to ensure they were re- porting the horse’s correct sex at time of entry; however, the errors continued.

Unreported geldings were still slipping through the reporting process and the public was not receiving the information in a timely manner. In the calendar years 2016/2017 twelve trainers were fined for violations of Rule 1865. However, the trainer may not always be entirely at fault. Having been informed of a gelding by the trainer, the racing office may fail to no- tify the stewards. Errors may also occur when a trainer takes on a new owner and receives horses with which he has never worked. The owner may fail to inform the trainer about a recent gelding.

The reality of mitigating circumstances is demonstrated by the fact that of the twelve violations of Rule 1865 in the calendar years 2016/2017, ten of the fines levied against trainers were under $1,000. That means the stewards found there were mitigating circumstances in accordance with sub-

section 1865(e)(3) and (e)(3)(A). The proposed amendment to Rule 1865 will remove the trainer ’s minimum $1,000 fine from subsection 1865(e)(1). Instead, the subsection will provide that the party responsible for a misidentification of a horse’s true sex in the official program may be sanctioned by the stewards. Such sanctions may include a fine, and/or a number of days of suspension of license. The removal of the $1,000 fine is the result of the Board’s determina- tion that declaration of the horse alone is a penalty which renders the fine an unnecessary deterrent.

Declaring a horse from a race penalizes the owner and the trainer. From the owner’s perspective, there are still costs associated with maintaining the horse, and prepar- ing it to race. In addition, the owner loses any potential purse money the horse may earn. The trainer loses an opportunity to earn a percentage of the purse, and is placed in the position of having to explain, often to an angry and disappointed owner, why the gelding of the horse was not properly reported. The trainer may lose the owner’s business to another trainer.

If the racing of- fice is the responsible party, it has to explain to the own- er and trainer how it failed to report that the horse was gelded since its last start. The proposed change recog- nizes that such mix−ups are not always the fault of the trainer, and that others may be the responsible parties. The stewards’ sanctions may include a fine, or a number of suspension days, or both, depending on the responsi- ble party.

In 2018, Rule 1865 was amended to add subsection 1865(e)(2), which provided that if the true sex of the horse was not reported to the racing office prior to the opening of wagering for the race in which it was en- tered, the horse would be declared from the race. This provides adequate time for the trainer to inform the rac- ing office about the true sex of the horse, and for the in- formation to be disseminated to the wagering public. The morning routine on the backside can begin as early as 4:00 a.m. The racing office generally opens at 7:00 a.m., and the totalizator* begins operating at 8:30 a.m. PST.

As the first post time for a race meeting is general- ly between 12 noon and 2:00 p.m., the racing office will have time to inform the stewards of the true sex of the horse. (*The totalizator is an automated system of wa- gering on races that dispenses and records wagering tickets, calculates and displays odds and payoffs. It also provides for cashing winning tickets.) The 2018 amendment was meant to protect the wagering public against instances where it learns, after placing wagers, that a horse has been gelded. That is exactly the effect of the provision.

However, for the wagering public, infor- mation regarding gelding is only considered critical if the horse has previously run in a race in an unaltered state. A horse that has never run in a race has no “past performance” statistics on which to base a wager, so gelding is not as much of an issue.

The proposed amend- ment to subsection 1865(e)(2) is meant to acknowledge the fact that information regarding gelding is material when, having started in any race, the horse is subse- quently altered, and the public is not informed of the true sex of the horse prior to the opening of wagering for the race in which the horse is entered. Because they are starting their racing career as geldings, the proposed amendment provides a break for horses that have never run.

Declaring the horse that has previously run in a race protects the wagering public and provides an additional incentive for responsible parties to pay attention to the information provided to the racing office. Depending on the types of wagers they placed, persons who select- ed the horse that is scratched will have their wagers can- celled and refunded, or their selections replaced by the favorite or by an alternate they designated at the time they made their wagers.

Trainers will have an incentive to pay close attention to their entries, as scratching the horse precludes any possibility of earning a share of the purse. In addition, the responsible parties may be sanc- tioned by the stewards. The racing office will have in- centive to ensure it keeps the stewards informed of any changes, as it may be subject to sanctions.

CALIFORNIA REGULATORY NOTICE REGISTER 2018, VOLUME NO. 31-Z 1208 POLICY STATEMENT OVERVIEW OF ANTICIPATED BENEFITS OF PROPOSAL Board Rule 1865 requires that any alteration of the sex of a horse from the sex as recorded on the certificate of foal registration or the eligibility certificate or other official registration certificate of the horse shall be re- ported to the racing secretary and the official horse identifier if the horse is entered to race at any race meet- ing. The primary purpose of the regulation is to ensure that the public has full and correct information regard- ing horses entered in a race.

The proposed amendment to Rule 1865 provides that if the true sex of a horse is not correctly identified in the official program for the race in which the horse is entered, the responsible parties may be sanctioned by the stewards. The proposed amendment deletes the trainer’s $1,000 minimum fine under subsection 1865(e)(1), as the Board determined that withdrawal of the horse alone is a penalty which renders the fine an unnecessary deterrent.

The proposed amendment amends subsection 1865(e)(2) to provide that if, having started in a race, the sex of the horse has been altered, and the public is not informed of the true sex of the horse, prior to the opening of wagering for the race in which the horse is entered, the stewards shall de- clare the horse from the race. The proposed amendments to Rule 1865 benefits California’s horsemen and the public by providing an additional incentive to ensure that any alteration to the sex of a horse is reported as required under Rule 1865.

Full information regarding the condition of a horse en- tered to race helps level the playing field for horsemen and provides valuable information to the wagering pub- lic. Full, accurate disclosure regarding horses entered to race assists the industry in providing transparency, which is essential in maintaining the integrity of the sport. The proposed amendment is consistent with cur- rent Board regulations in that the trainer is responsible for the condition of the horse entered to race, and the stewards have general authority and supervision over all licensees and other persons attendant on horses.

The proposed amendment does not protect public health and safety, worker safety, or the environment, the preven- tion of discrimination, the promotion of fairness or so- cial equity, and the increase in openness and transparen- cy in government. The regulation promotes transparen- cy in business by requiring that the true sex of the horse entered to race is disclosed to the public. CONSISTENCY EV ALUATION During the process of developing the amendment to Rule 1865, the CHRB has conducted a search of any similar regulations on this topic.

Rule 1865 is the only regulation dealing with the alteration of the sex of a horse. Therefore, the Board has concluded that the reg- ulation is neither inconsistent nor incompatible with ex- isting state regulations. DISCLOSURES REGARDING THE PROPOSED ACTION Mandate on local agencies and school districts: none. Cost or savings to any state agency: none. Cost to any local agency or school district that must be reimbursed in accordance with Government Code sections 17500 through 17630: none. Other non−discretionary cost or savings imposed up- on local agencies: none.

Cost or savings in federal funding to the state: none. The Board has made an initial determination that the proposed amendment of Rule 1865 will not have a sig- nificant statewide adverse economic impact directly af- fecting business including the ability of California busi- nesses to compete with businesses in other states. The following studies/relevant data were relied upon in making the above determination: none. RESULTS OF THE ECONOMIC IMPACT ASSESSMENT The results of the Board’s Economic Impact Assess- ment as required by Government Code

section 11346.3(

b) are as follows: The proposed amendment will provide consistency and clarity with regards to the necessity for disclosing the true sex of a horse entered to race, and the conse- quences if such disclosure is not accomplished prior to the opening of wagering for the race in which the horse is entered. The proposed amendment will protect the in- terests of California horsemen and the public by ensur- ing full disclosure and transparency regarding the con- dition of horses entered to race.

The proposed amendment to Rule 1865 will impact horsemen, or other responsible parties, who fail to re- port any alteration of the sex of a horse entered to race. However, the net economic effect of the proposed amendment will be neutral. Scratching a horse simply means the horse will not be running in the race. In most instances, wagers on a scratched horse will be refunded. In multi- race wagers, such as a Pick−4 or Pick−6, the scratched horse will be replaced with the favorite (some wagers allow the patron to designate alternate wagering interests).

The adoption of the proposed amendment of Rule 1865 will not (1) create or eliminate jobs within Califor- nia; (2) create new businesses or eliminate existing businesses within California; (3) affect the expansion of businesses currently doing business within California; (4) impact the state’s environment; (5) impact worker safety.

CALIFORNIA REGULATORY NOTICE REGISTER 2018, VOLUME NO. 31-Z 1209 Cost impact on representative private persons or businesses: The Board is not aware of any cost impacts that a representative private person or business would necessarily incur in reasonable compliance with the proposed actions. Significant effect on housing costs: none. Effect on small businesses: none. The proposal to amend Rule 1865 does not affect small businesses be- cause horse racing is not a small business under Gov- ernment Code

section 11342.610. CONSIDERATION OF ALTERNATIVES In accordance with Government Code

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

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

CONTACT PERSON Inquiries concerning the substance of the proposed action and requests for copies of the proposed text of the regulation, the initial statement of reasons, the modified text of the regulation, if any, and other information upon which the rulemaking is based should be directed to: Harold Coburn, Regulation Analyst California Horse Racing Board 1010 Hurley Way, Suite 300 Sacramento, CA 95825 Telephone: (916) 263−6026 Fax: (916) 263−6022 E−Mail: haroldc@chrb.ca.gov If the person named above is not available, interested parties may contact: Andrea Ogden, Manager Policy and Regulations Telephone (916) 263−6033 A V AILABILITY OF INITIAL STATEMENT OF REASONS AND TEXT OF PROPOSED REGULATION The Board will have the entire rulemaking file avail- able for inspection and copying throughout the rule- making process at its offices at the above address.

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

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

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

The rulemaking file consists of this no- tice, the proposed text of the regulation, and the initial statement of reasons. The Board’s website address is: www.chrb.ca.gov.

CALIFORNIA REGULATORY NOTICE REGISTER 2018, VOLUME NO. 31-Z 1210 TITLE 4. CALIFORNIA HORSE RACING BOARD TITLE 4. DIVISION 4. CALIFORNIA CODE OF REGULATIONS NOTICE OF PROPOSAL TO AMEND RULE 1843.3. PENALTIES FOR MEDICATION VIOLATIONS The California Horse Racing Board (Board/CHRB) proposes to amend the regulation described below after considering all comments, objections or recommenda- tions regarding the proposed action. PROPOSED REGULATORY ACTION The Board proposes to amend Rule 1843.3, Penalties for Medication Violations. The proposed amendment will modify subsection 1843.3(

d) to correct a discrep- ancy in the licensed trainer phenylbutazone levels with- in the Category “C” penalty chart. The Licensed Trainer category, 2nd offense within 365−day period, which currently reads “Phenylbutazone (>10.0 mcg/ml),” will be changed to “Phenylbutazone (>5.0 mcg/ml).” The proposed amendment will bring the Licensed Trainer levels in line with the Licensed Owner.

PUBLIC HEARING The Board will hold a public hearing starting at 9:30 a.m., Thursday, September 27, 2018, or as soon after that as business before the Board will permit, at the Los Alamitos Race Course, 4961 Katella Avenue, Cy- press, California. At the hearing, any person may present statements or arguments orally or in writing about the proposed action described in the informative digest. It is requested, but not required, that persons making oral comments at the hearing submit a written copy of their testimony.

WRITTEN COMMENT PERIOD Any interested persons, or their authorized represen- tatives, may submit written comments about the pro- posed regulatory action to the Board. The written com- ment period closes at 5:00 p.m. on September 17, 2018. The Board must receive all comments at that time; however, written comments may still be submit- ted at the public hearing.

Submit comments to: Harold Coburn, Regulation Analyst California Horse Racing Board 1010 Hurley Way, Suite 300 Sacramento, CA 95825 Telephone (916) 263−6026 Fax: (916) 263−6022 E−mail: haroldc@chrb.ca.gov AUTHORITY AND REFERENCE Authority cited: Sections 19440, 19461 and 19580, Business and Professions Code. Reference: sections 19461, 19580, 19581 and 19582, Business and Profes- sions Code, and

section 11425.50, Government Code. Business and Professions Code sections 19440, 19461 and 19580 authorize the Board to adopt the pro- posed regulation, which would implement, interpret or make specific sections 19461, 19580, 19581 and 19582, Business and Professions Code. INFORMATIVE DIGEST/POLICY STATEMENT OVERVIEW Business and Professions Code

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

section 19461 states every license granted under this

chapter is subject to suspension or revocation by the Board in any case where the Board has reason to believe that any condition regarding it has not been complied with, or that any law, or any rule or regulation of the Board affecting it has been broken or violated. Business and Professions Code

section 19580 provides the Board shall adopt regulations to establish policies, guidelines, and penalties relating to equine medication in order to preserve and enhance the integrity of horse racing in the state. Those policies, guidelines and penalties shall in- clude, at a minimum, the provisions set forth in this arti- cle. Business and Professions Code

section 19581 states no substance of any kind shall be administered by any means to a horse after it has been entered to race in a horse race, unless the Board has, by regulation, specifi- cally authorized the use of the substance and the quanti- ty and the composition thereof. Business and Profes- sions Code

section 19582 states violations of

Section 19581, as determined by the Board are punishable as set forth in regulations adopted by the Board. The Board may classify violations of

section 19581 based on each class of prohibited drug substances, prior violations within the previous three years, and prior violations

CALIFORNIA REGULATORY NOTICE REGISTER 2018, VOLUME NO. 31-Z 1211 within the violator’s lifetime. The Board may provide for the suspension of a license for not more than three years, except as provided in subdivision (b), or a mone- tary penalty of not more than one hundred thousand dol- lars, or both, and disqualification from purses, for a vio- lation of

Section 19581. The actual amount of the mon- etary penalty imposed pursuant to this paragraph shall be determined only after due consideration has been given to all the facts, circumstances, acts, and intent of the licensee, and shall not be solely based on the trainer− insurer rule, as established in

Section 1843 and 1887 of Title 4 of the California Code of Regulations. The pun- ishment for second and subsequent violations of

section 19581 shall be greater than the punishment for a first vi- olation of

section 19581 with respect to each class of prohibited drug substances, unless the administrative law judge, in findings of fact and conclusions of law filed with the Board, concludes that a deviation from this general rule is justified. A third violation of

section 19581 during the lifetime of the licensee, determined by the Board to be at a class I or class II level, may result in the permanent revocation of the person’s license. The administrative law judge shall, after consideration of the circumstances surrounding a violation specified in paragraph (1), file a decision with the Board that in- cludes findings of fact and conclusions of law. Any per- son whose license is suspended or revoked pursuant to this

section shall not be entitled to receive any material benefit or remuneration in any capacity or from any business activity permitted or allowed by the license during any period of its suspension or revocation. The penalties provided by this

section are in addition to any other civil, criminal, and administrative penalties or sanctions provided by law, and do not supplant, but are cumulative to, other penalties or sanctions. Business and Professions Code

section 19461 provides that every license granted under this

chapter is subject to suspen- sion or revocation by the Board in any case where the Board has reason to believe that any condition regard- ing it has not been complied with, or that any law, or any rule or regulation of the Board affecting it has been bro- ken or violated. All proceedings to revoke a license shall be conducted in accordance with

Chapter 5 of

Part 1 of Division 3 of Title 2 of the Government Code. Gov- ernment Code

section 11425.50 states the decision shall be in writing and shall include a statement of the factual and legal basis for the decision. In 2016, the Board amended Rule 1843.3. One ele- ment of the amendment eliminated the phenylbutazone measurements in serum or plasma for Category “D” penalties which were found under subsection l843.3(f). The measurements were moved to the Category “C” penalties column under subsection 1843.3(d).

The first levels of Category “C” phenylbutazone penalties were changed to match the levels previously found in the Cat- egory “D” penalties for Rule 1844(c)(1) phenylbuta- zone violations. This meant the second level of mea- surements of serum or plasma for Licensed Trainer and Licensed Owner had to be adjusted so they would be se- quential without a gap.

The subsequent Licensed Train- er and Licensed Owner columns were supposed to be changed to “Phenylbutazone (>5.0 mcg/ml).” The Li- censed Owner category was changed; however, the changes that should have been made to the Licensed Trainer category were omitted from the final text sub- mitted to OAL on September 13, 2016.

The proposed amendment to Rule 1843.3 is necessary, as it will cor- rect the discrepancy by adjusting the Licensed Trainer category, 2nd offense within 365−day period, which currently reads “Phenylbutazone (>10.0 mcg/ml),” to “Phenylbutazone (>5.0 mcg/ml).” The proposed amendment will not alter the fact that a licensed trainer with a phenylbutazone positive of 10.0 mcg/ml is sub- ject to a penalty.

Rather, the proposed change will cor- rect the Licensed Trainer level of serum or plasma for phenylbutazone so it is in line with the Licensed Owner category, and is presented as the Board intended in its 2016 amendment of the regulation. POLICY STATEMENT OVERVIEW OF ANTICIPATED BENEFITS OF PROPOSAL The proposed amendment to Rule 1843.3 will modify subsection 1843.3(

d) to correct a discrepancy in the Li- censed Trainer phenylbutazone levels within the Cate- gory “C” penalty chart. The Licensed Trainer category, 2nd offense within 365−day period, which currently reads “Phenylbutazone (>10.0 mcg/ml),” will be changed to “Phenylbutazone (>5.0 mcg/ml).” The pro- posed amendment will bring the Licensed Trainer Cate- gory in line with the changes made to the Licensed Owner category in a 2016 amendment. The proposed amendment to Rule 1843.3 is neces- sary to ensure consistency and clarity within the text of the regulation.

Correcting the Licensed Trainer catego- ry, 2nd offense within 365−day period, to match the li- censed owner category, will provide greater clarity re- garding Category “C” penalties for Rule 1844(c)(1). The proposed amendment to Rule 1843.3 will promote the health and welfare of race horses and licensees by removing those with the most egregious medication vi- olation from the inclosure.

CONSISTENCY EV ALUATION Evaluation of Consistency and Compatibility with Existing State Regulations: During the process of de- veloping the proposed amendment, the Board has con- ducted an evaluation for any related regulations and has determined that Rule 1843.3 is the only regulation deal-

CALIFORNIA REGULATORY NOTICE REGISTER 2018, VOLUME NO. 31-Z 1212 ing with classification of drug substances and penalties for medication violations with regards to California horse racing. Therefore the proposed regulation is nei- ther inconsistent nor incompatible with existing state regulations. DISCLOSURE REGARDING THE PROPOSED ACTION Mandate on local agencies and school districts: none. Cost or savings to any state agency: none. Cost to any local agency or school district that must be reimbursed in accordance with Government Code sections 17500 through 17630: none.

Other non−discretionary costs or savings imposed upon local agencies: none. Cost or savings in federal funding to the State: none. The Board has made an initial determination that the proposed amendment to Rule 1843.3 will not have a significant statewide adverse economic impact directly affecting business including the ability of California businesses to compete with businesses in other states. The following studies/relevant data were relied upon in making the above determination: none.

Cost impact on representative private persons or businesses: The Board is not aware of any cost impacts that a representative private person or business would necessarily incur in reasonable compliance with the proposed action. Significant effect on housing costs: none. RESULT OF ECONOMIC IMPACT ANALYSIS The results of the Board’s Economic Impact Assess- ment as required by Government Code

section 11346.3(

b) are as follows: The adoption of the proposed amendment to Rule 1843.3 will not (1) create or elimi- nate jobs within California; (2) create new businesses or eliminate existing businesses within California; (3) af- fect the expansion of businesses currently doing busi- ness within California; or (4) increase or decrease in- vestment in California; (5) benefit the state’s environ- ment. The proposed amendment to Rule 1843.3 impacts individuals who violate the Board’s medication regula- tions.

In making the determination that the proposed amendment to Rule 1843.3 will not have an adverse economic impact, the Board looked at the number of li- censed trainers who might be affected, and compared it to the total number of persons who hold CHRB occupa- tional licenses. The individuals impacted are licensed horse trainers. The CHRB has 18,874 licensees; of that number, 626 persons hold CHRB trainer licenses. Penalties for medication violations act as deterrents. This is demonstrated by the number of trainers who have had an 1844(c)(1) violation in fiscal year 2017/2018.

A total of 12 trainers have been fined. The proposed amendment to Rule 1843.3 promotes the health and safety or race horses, which are jeopardized if they work out or race when they are not sound due to the unauthorized administration of medications or drug substances. Keeping race horses healthy protects the economic interest of owners and ensures that there is adequate horse inventory. Ensuring that horses entered to race are sound also promotes jockey/driver safety. Accordingly, the proposed amendment benefits the health and welfare of California residents and improves worker safety.

Sound, healthy horses result in a favor- able public response to horse racing, which could result in an increase in wagering activity, and a positive eco- nomic impact on the industry. Effect on small businesses: none. The proposal to amend Rule 1843.3 does not affect small businesses be- cause horse racing is not a small business under Gov- ernment Code

section 11342.610. CONSIDERATION OF ALTERNATIVES In accordance with Government Code

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

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

CONTACT PERSON Inquiries concerning the substance of the proposed action and requests for copies of the proposed text of the regulation, the initial statement of reasons, the modified text of the regulation, if any, and other information upon which the rulemaking is based should be directed to: Harold Coburn, Regulation Analyst California Horse Racing Board 1010 Hurley Way, Suite 300 Sacramento, CA 95825 Telephone: (916) 263−6026 Fax: (916) 263−6022 E−Mail: haroldc@chrb.ca.gov If the person named above is not available, interested parties may contact:

CALIFORNIA REGULATORY NOTICE REGISTER 2018, VOLUME NO. 31-Z 1213 Andrea Ogden, Manager Policy and Regulations Telephone (916) 263−6033 A V AILABILITY OF INITIAL STATEMENT OF REASONS AND TEXT OF PROPOSED REGULATION The Board will have the entire rulemaking file avail- able for inspection and copying throughout the rule- making process at its offices at the above address. As of the date this notice is published in the Notice Register, the rulemaking file consists of this notice, the proposed text of the regulation, and the initial statement of rea- sons.

Copies of these documents, or any of the informa- tion upon which the proposed rulemaking is based on, may be obtained by contacting Harold Coburn, or the alternative contact person at the address, phone number or e−mail address listed above. A V AILABILITY OF MODIFIED TEXT After holding a hearing and considering all timely and relevant comments received, the Board may adopt the proposed regulation substantially as described in this notice.

If modifications are made which are suffi- ciently related to the originally proposed text, the modi- fied text, with changes clearly marked, shall be made available to the public for at least 15 days prior to the date on which the Board adopts the regulation. Requests for copies of any modified regulations should be sent to the attention of Harold Coburn at the address stated above. The Board will accept written comments on the modified regulation for 15 days after the date on which it is made available.

A V AILABILITY OF FINAL STATEMENT OF REASONS Requests for copies of the final statement of reasons, which will be available after the Board has adopted the proposed regulation in its current or modified form, should be sent to the attention of Harold Coburn at the address stated above. BOARD WEB ACCESS The Board will have the entire rulemaking file avail- able for inspection throughout the rulemaking process at its web site. The rulemaking file consists of this no- tice, the proposed text of the regulation, and the initial statement of reasons. The Board’s website address is: www.chrb.ca.gov. TITLE 5.

COMMISSION ON TEACHER CREDENTIALING NOTICE OF INTENTION TO AMEND THE CONFLICT−OF−INTEREST CODE OF THE COMMISSION ON TEACHER CREDENTIALING NOTICE IS HEREBY GIVEN that the Commission on Teacher Credentialing, pursuant to the authority vested in it by

Section 87306 of the Government Code, proposes amendment to its conflict−of−interest Code. The purpose of these amendments is to implement the requirements of sections 87300 through 87302, and

section 87306 of the Government Code. The Commission on Teacher Credentialing proposes to amend its conflict−of−interest code to include em- ployee positions that involve the making or participa- tion in the making of decisions that may foreseeably have a material effect on any financial interest, as set forth in subdivision (

a) of

section 87302 of the Govern- ment Code. This amendment makes changes to reflect the current organizational structure of the Department. Copies of the amended code are available and may be requested from the Contact Person set forth below. Any interested person may submit written state- ments, arguments, or comments relating to the pro- posed amendments by submitting them in writing no later than September 14, 2018, or at the conclusion of the public hearing, if requested, whichever comes later, to the Contact Person set forth below.

At this time, no public hearing has been scheduled concerning the proposed amendments. If any interested person or the person’s representative requests a public hearing, he or she must do so no later than September 14, 2018, by contacting the Contact Person set forth below. Copies of the proposed amendments may be obtained by contacting the Contact Person set forth below. The Commission on Teacher Credentialing has deter- mined that the proposed amendments: 1. Imposes no mandate on local agencies or school districts. 2. Imposes no costs or savings on any state agency. 3.

Imposes 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.

CALIFORNIA REGULATORY NOTICE REGISTER 2018, VOLUME NO. 31-Z 1214 In making these proposed amendments, the Commis- sion on Teacher Credentialing must determine that no alternative considered by the agency would be more ef- fective in carrying out the purpose for which the amend- ments are proposed or would be as effective and less burdensome to affected persons that the proposed amendments. All inquiries concerning this proposed amendment and any communication required by this notice should be directed to: Christopher M. Rose 1900 Capitol Avenue Sacramento, CA 95811 (916) 445−0474 crose@ctc.ca.gov TITLE 5.

EDUCATION EDUCATION AUDIT APPEALS PANEL Audits of K−12 Local Education Agencies Fiscal Year 2018−19 The Education Audit Appeals Panel (EAAP) propos- es to adopt an Audit Guide for Fiscal Year 2018−19 us- ing the Guide’s incorporating regulation, after consid- ering all comments, objections, and recommendations regarding the proposed action. PUBLIC HEARING A public hearing regarding this proposal is not cur- rently scheduled.

Not later than 15 days prior to the close of the written comment period, any interested per- son, or his or her authorized representative, may make a written request for a public hearing pursuant to Govern- ment Code

section 11346.8, and a public hearing will be held. Requests for a public hearing should be addressed to Mary Kelly. WRITTEN COMMENT PERIOD Any interested person, or his or her authorized repre- sentative, may submit written comments relevant to the proposed regulatory action. The written comment peri- od closes Monday, September 17, 2018. EAAP will consider only written comments received by that time.

Written comments for EAAP’s consideration should be directed to: Mary Kelly, Executive Officer Education Audit Appeals Panel 770 L Street, Suite 1100 Sacramento, CA 95814 Fax: (916) 445−7626 e−mail: mkelly@eaap.ca.gov AUTHORITY AND REFERENCE Authority cited: Sections 14501, 14502.1, 14503 and 41024, California Constitution.

Article XIII,

Section 36, subdiv. (e), subpara 7, and

Article XIIIA,

Section 1, subdiv. (b), subparas 3(

C) and 3(D). Reference: Refer- ence: California Constitution Aliicle XIIIB,

Section 1.5; and Sections 2574(b)(3)(C), 8482.3(f)(5), 14501, 14502.1, 14503, 14509, 15286, 41024, 42238.02(b)(3)(B), 47612.5, 47634.2 and 48000, Edu- cation Code. INFORMATIVE DIGEST/POLICY STATEMENT OVERVIEW This rulemaking amends title 5, California Code of Regulations,

section 19810 to clarify the incorporation by reference language and make reference to the audit guide. It also adopts the audit guide for 2018−19 which makes clarifying revisions and addresses legislative changes in the conditions of apportionment of school funding. This rulemaking meets the requirements of Educa- tion Code

section 14502.1, which mandates that an an- nual audit guide be adopted by the EAAP. The purpose of the audit guide is to define terms and specify proce- dures to guide accountants in the conduct of statutorily required financial and compliance audits of K−12 local education agencies. The Controller, pursuant to Educa- tion Code

section 14502.1, has proposed changes from the previous year’s audit guide to be reflected in the 2018−19 audit guide. The proposed changes derive from the Controller’s proposals and also contain changes designed to clarify audit steps. EAAP does not anticipate that these proposed amendments would create specific benefits for the pro- tection of public health and safety, worker safety, or the environment, the prevention of discrimination, the pro- motion of fairness or social equity, nor the increase in openness and transparency in business and govern- ment.

EAAP has determined that the proposed amend- ments will ultimately benefit the welfare of California residents by ensuring that local education agencies are in compliance with regulatory requirements. In devel- oping the rulemaking, EAAP evaluated the proposed

CALIFORNIA REGULATORY NOTICE REGISTER 2018, VOLUME NO. 31-Z 1215 2017 18 March 1, 2018 8482.3(f)(5) changes to regulations and determined that they are not inconsistent or incompatible with existing regulations, state or federal. A description of proposed changes to

section 19810, and a discussion of revisions to the audit guide, follow. Title 5, Division 1.5

Chapter 3. Audits of California K−12 Local Education Agencies

Article 1 General Provisions § 19810. Annual Audit Guides. The “ 2018−19 Guide for Annual Audits of K−12 Local Education Agencies and State Compliance Reporting,” (July 1, 2018 ), adopted by the Education Audit Appeals Panel, is incorporated by reference. The guide provides the audit steps, reporting requirements, and other guidance, for the required an- nual financial and compliance audits, subject to auditor judgment where alternative or additional audit steps may be appropriate. The annual guide is superseded by a supplemental audit guide, if needed, adopted before March 1 of each fiscal year.

Each annual guide and any applicable supplement are available on www.eaap.ca. gov/audit−guide, with paper or electronic copies avail- able on request. Note: Authority cited: Sections 14502.1 and 47612, Education Code; California Constitution,

Article XIII,

Section 36, subdiv. (e), subpara 7, and

Article XIIIA,

Section 1, subdiv. (b), subparas 3(

C) and 3(D). Refer- ence: California Constitution

Article XIIIB,

Section 1.5; and Sections , 2574(b)(3)(C), 8482.3(f)(5), 14501, 14502.1, 14503, 14509, 15286, 41020, 41024,42238.02(b)(3)(B), 47612.5, 47634.2 and 48000, Education Code. AUDIT GUIDE AMENDMENTS The proposed annual 2018−19 Audit Guide uses the text of existing 2017−18 Audit Guide with the follow- ing amendments: Deletion: •

Section R Educator Effectiveness was funded for fiscal years 2015−16, 2016−17 and 2017−18, with LEAs to submit a final report on the use of those funds on July 1, 2018 (Assembly Bill 104,

Section 58(b)(1) (Chapter 13, Statutes of 2015), as amended by Senate Bill 103,

Section 8 (Chapter 324, Statutes of 2015). The Controller recommended not including this item in the audit guide for 2018−19 because the funding period was over and there were no expenditures that had not been evaluated as consistent with that program. Additions: •

Section R is added to ensure every public school has reviewed and revised, or adopted, a comprehensive safety plan, by March 1, and has submitted it for approval to the school district or county office of education. The auditor will verify that the LEA has a process in place to ensure that its schools have such a plan and will check a representative sample of schools to verify compliance, or to verify that the LEA notified the State Department of Education by October 15 of any school not having a comprehensive safety plan. •

Section S District of Choice is added to verify that school districts electing to be “districts of choice” pursuant to Education Code sections 48300−48317 acted in compliance with the statutory requirements for board resolution, specification of the number of transfer pupils to be accepted, election, registration with CDE, and utilization of a neutral selection process except as to giving priority to pupils eligible for free or reduced−price meals, siblings of current pupils, and children of military personnel; and collected the data required by Education Code

section 48313(

a) about the district of choice procedure and results. • New Amendment B School Facilities Program Bond Fund Audits fulfills the Legislative mandate in Education Code

Section 41024(b)(1) to revamp expenditure audits of State grants for new construction and modernization projects, with distinct provisions for Financial Hardship and Non−Financial Hardship grants, as well as construction and modernization grants for charter schools and career technical education (CTE) schools’ facilities projects. This

section is necessary to effectuate Education Code

Section 41024(b)(1), as well as the specific citations within the text, namely various sections in Education Code, Public Contracting Code, and title 2,

chapter 3, subchapter 4, group 1 of the California Code of Regulations (School Facility Program regulations). For audit guide steps, EAAP relied upon the expert opinion of the audit guide workgroup, led by the State Controller’s Office, and including representatives of the Department of Finance, Department of Education, Office of Public School Construction, and stakeholders, including school districts, Certified Public Accounts and education associations.

CALIFORNIA REGULATORY NOTICE REGISTER 2018, VOLUME NO. 31-Z 1216 Amendments: • General Provisions Auditing Standards is revised to adopt a table for guidance as to the size of samples tested in audits, parallel to the standards used in federal audits and consistent with the federal compliance requirements contained in the American Institute of Certified Public Accountants, Audit Guide for Government Auditing Standards and Single Audits. Education Code

section 41020(b)(4) requires that these annual audits are conducted in accordance with Government Auditing Standards. Minor and technical changes also clarify existing sampling directions in Sections A, D, E, F, M, O, and W • General Provisions Report Components Item 6.a.(6), is revised for the auditor to add a note if the finding is a repeat of or related to a finding in the previous audit year. This statement is added to ensure consistency with the Government Auditing Standards, under which these audits are conducted.

Government Auditing Standards states that auditors should follow up on findings and recommendations from previous audits, and whether the auditee has taken corrective action. •

Section D Independent Study is revised as proposed by the Controller to add new paragraph 3(

g) which requires the auditor to verify that independent study pupils meet the age requirements of Education Code sections 46300.1 and 46300.4. This amendment is to include the age eligibility requirements to the “Local Education Agencies Other Than Charter Schools” section. The current Audit Guide includes instructions for auditors to check the pupil’s age eligibility in order to claim attendance for the purpose of funding for the course−based independent study program (Section Y of the Audit Guide), but did not have a step regarding age eligibility requirements for pupils participating in an independent study program at a district or county school. This amendment corrects that oversight. •

Section W Unduplicated Local Control Funding Formula Pupil Counts is revised to clarify that procedure 1 requires the auditor to use the certified report that excludes any transitional kindergarten pupils who had their fifth birthday after December 2, to clarify procedures l.b. and l.c. to facilitate identifying which pupils are eligible only under the ELAS (English Learner) designation and which are eligible under both the ELAS and NSLP (National School Lunch Program) designations.

In addition, a clarification to sampling procedures authorizes the auditor to substitute a new selection for a pupil who received ELAS designation while enrolled in a different LEA, to avoid uncertainties that can result from delays in obtaining documentation from the LEA for the ELAS designation. Name of document incorporated by reference: 2018−19 Guide for Annual Audits of K−12 Local Edu- cation Agencies and State Compliance Reporting (July 1, 2018). DISCLOSURES REGARDING THE PROPOSED ACTION 1. Mandate on local agencies and school districts: None. 2.

Cost to any local agency or school district which must be reimbursed: None. 3. Cost or savings to any state agency: None. 4. Other non−discretionary cost or savings imposed upon local agencies: None. 5. Cost or savings in federal funding to the state: None. 6. Significant effect on housing costs: None. 7. Significant, statewide adverse economic impact directly affecting business including the ability of California businesses to compete with businesses in other states: None. 8. Results of the Economic Impact Assessment: (

a) Adoption of these regulations will not: • create or eliminate jobs within California;. • create new businesses or eliminate existing businesses within California; or • affect the expansion of businesses currently doing business within California. (

b) Benefit of the proposed regulation to the health and welfare of California residents, worker safety, or the State’s environment and quality of life: As stated under the “Informative Digest/Policy Statement Overview” above, the proposed regulations will update and improve audit procedures of K−12 local education agencies, which would ultimately benefit the welfare of California residents by ensuring that local education agencies are in compliance with regulatory requirements. 9.

Cost impact on a representative private person or business: EAAP is not aware of any cost impacts that a representative private person or business would necessarily incur in reasonable compliance with the proposed action. 10. Business report requirements: None.

CALIFORNIA REGULATORY NOTICE REGISTER 2018, VOLUME NO. 31-Z 1217 11. Effect on small businesses: The proposed regulations will have no effect on small businesses because they do not materially alter the requirements for LEA audits. CONSIDERATION OF ALTERNATIVES In accordance with Government Code

Section l1346.5(a)(13), EAAP must determine that no reason- able alternative it has considered or that has otherwise been identified and brought to the EAAP’s attention would be more effective in carrying out the purpose for which the action is proposed, would be as effective and less burdensome to affected private persons than the proposed action, or would be more cost−effective to af- fected private persons and equally effective in imple- menting the statutory policy or other provision of law.

CONTACT PERSONS Inquiries concerning the substance of the proposed action, requests for a copy of the proposed text of the regulations, the Initial Statement of Reasons, the modi- fied text of the regulations, if any, and other technical information upon which the rulemaking is based, and questions on the proposed administrative action may be directed to Timothy Morgan, Staff Attorney III, at (916) 445−7745 or by e−mail: tmorgan@eaap.ca.gov, or Mary C. Kelly, Executive Officer, at (916) 445−7745.

A V AILABILITY OF RULEMAKING FILE The entire rulemaking file will be available for in- spection and copying throughout the rulemaking process at EAAP’s office at the above address. As of the date this notice is published in the Notice Register, the rulemaking file consists of this notice, the proposed text of the regulations, the initial statement of reasons, and the Economic Impact Assessment. A copy may be ob- tained by contacting Timothy Morgan at the above ad- dress. The bill analyses are also available online at http://leginfo.legislature.ca.gov/faces/billSearchClient .xhtml .

A V AILABILITY OF CHANGED OR MODIFIED TEXT Following the comment period, a hearing, if request- ed, and consideration of all timely and relevant com- ments received, EAAP may adopt the proposed regula- tions substantially as described in this notice. If EAAP makes modifications that are sufficiently related to the originally proposed text, the modified text (with changes clearly indicated) will be available to the pub- lic for at least 15 days before EAAP adopts the regula- tions as revised.

Requests for copies of any modified regulations should be sent to the attention of Timothy Morgan at the address stated above. EAAP will accept written comments on the modified regulations for 15 days after the date on which they are made available. A V AILABILITY OF DOCUMENTS ON THE INTERNET Copies of the Notice of Proposed Rulemaking, Initial Statement of Reasons, text of the regulations in under- line and strikeout, any changed or modified text, and the Final Statement of Reasons will be accessible through the EAAP website: www.eaap.ca.gov. TITLE 9.

DEPARTMENT OF STATE HOSPITALS NOTICE OF PUBLIC HEARING TO CONSIDER THE PROPOSED AMENDMENTS TO THE PATIENT ELECTRONIC PROPERTY REGULATIONS California Code of Regulations Title 9. Rehabilitative and Developmental Services Division 1. Department of Mental Health

Chapter 16. State Hospital Operations

Article 3. Safety and Security The Department of State Hospitals (DSH or Depart- ment) will conduct a public hearing at the time and place noted below to consider proposed amendments to the Patient Electronic Property Regulation after consid- ering all relevant public comments, objections, and recommendations. DATE: September 20, 2018 TIME: 2:00 p.m.

LOCATION: California Health and Human Services Agency Department of State Hospitals Conference Room 100 1600 9th Street Sacramento, California 95814 At the hearing, any interested person or his or her rep- resentative may, orally or in writing, submit comments relevant to the proposed action described in the Infor- mative Digest. The Department requests, but does not require, that a person who makes an oral comment at the hearing also prepare and submit a written copy of his or her testimony. Furthermore, the Department requests, but does not require, that all written and email state-

CALIFORNIA REGULATORY NOTICE REGISTER 2018, VOLUME NO. 31-Z 1218 ments on this item be filed at least 10 days prior to the hearing, so that Department staff have sufficient time to consider each comment. The Department encourages members of the public to bring any suggestions for modifications to the proposed regulatory action to staff’s attention in advance of the hearing.

WRITTEN COMMENT PERIOD AND SUBMITTAL OF COMMENTS Any interested person or his or her representative may present comments orally or in writing at the hear- ing and may provide comments by personal delivery, postal mail service, fax, or email submittal before the hearing as described in detail below. The public com- ment period for this regulatory action will begin on Au- gust 3, 2018. For any written comment to be considered, comments not physically submitted at the hearing, must be received by the Department no later than 5:00 p.m., September 17, 2018.

Comments sent to persons and/or addresses other than that specified, 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 transmis- sion. For consideration, any written comments shall be submitted as follows: 1. By email to DSH.Regulations@dsh.ca.gov. It is requested that all comments, particularly those emailed with attachments, contain the regulation package identifier “Electronic Property” in the subject line to facilitate timely identification and review; 2.

By fax transmission to (916) 651−3090; 3. By United States Postal Service to: California Department of State Hospitals Regulations Unit Electronic Property 1600 9th Street, Room 410 Sacramento, CA 95814; or 4. Hand−delivered to the address above. AUTHORITY AND REFERENCE This regulatory action is proposed under the authority granted to the Department in Welfare and Institutions Code, sections 4005.1, 4011, 4027, 4101 and 4109. This action is proposed to implement, interpret or make spe- cific Welfare and Institutions Code, sections 4005.1, 4027, 4101, 4109 and 7295.

INFORMATIVE DIGEST AND POLICY STATEMENT OVERVIEW PURSUANT TO GOVERNMENT CODE

SECTION 11346.5(

a) Sections Affected: The Department proposes to amend

section 4350, title 9, California Code of Regula- tions (CCR). Existing Laws/Regulations: Welfare and Institutions Code,

section 4005.1, pro- vides that DSH may adopt and enforce rules and regula- tions necessary to carry out their respective duties. Welfare and Institutions Code,

section 4011, provides that DSH shall have jurisdiction over the execution of the laws relating to care and treatment of persons with mental health disorders under the custody of DSH. Welfare and Institutions Code,

section 4027, pro- vides that DSH may adopt regulations concerning pa- tients’ rights and related procedures applicable to the inpatient treatment of mentally ill offenders and men- tally disordered sex offenders. Welfare and Institutions Code,

section 4101, pro- vides that unless specifically authorized by law, all in- stitutions under the jurisdiction of DSH shall be gov- erned by uniform rule and regulation of DSH. Welfare and Institutions Code,

section 4109, pro- vides that DSH has general control and direction of the property and concerns of each state hospital. DSH shall take care of the interests of the hospital according to law, establish bylaws, rules, and regulations as deemed necessary for its internal government, discipline, and management, and maintain effective inspection of the hospital. Welfare and Institutions Code,

section 7295, pro- vides that DSH shall develop a list of items deemed con- traband at every state hospital subject to review by the Contraband Committee and Director of State Hospitals every six months. This

section defines “contraband” as materials, articles, or goods that a patient is prohibited from having in his or her possession because the materi- als, articles, or goods present a risk to the safety and se- curity of the facility. This

section provides that inclu- sion on a contraband list does not necessitate regula- tions but does not address harm to public or ensure a permanent solution.

Section 891, title 9, CCR, provides that patients not committed pursuant to the Lanterman−Petris−Short Act (LPS) shall not have access to the internet. Effect of the Proposed Action This proposed rulemaking amendment would amend the current California Code of Regulations

section 4350 regarding patient electronic property contraband to ad- dress technological advances and meet the hospital’s security needs. The proposed amendments would better delineate which electronic devices are prohibited and which are permitted, and under what circumstances.

CALIFORNIA REGULATORY NOTICE REGISTER 2018, VOLUME NO. 31-Z 1219 The amendments will also address the technological ad- vances of digital memory storage, specifically USB de- vices and gaming devices, that are the most prone to permit the storage, download, and transfer of illegal and illicit material. This proposed action would help to min- imize or eliminate patient possession of illegal and illic- it material that is harmful to a secured mental health treatment environment. Specific Proposal: This proposed action will make changes to Division 1, title 9, CCR, as follows: Amend

section 4350.

Contraband Electronic Devices with Communication and Internet Capabilities. • Title: The title of the regulation would be amended to better match the content of the amended regulatory language for simplicity and clarity. • Subsection (a), would reorganize the current regulatory language to group information into subsections and paragraphs for clarity • Subsection (a), paragraph (1), would utilize the language of the current regulation and permit the delineation of examples of prohibited electronic devices with the actual or potential capability to connect to the internet. • Subparagraph (A), maintains the electronic devices delineated in current regulation, adding tablets, single−board computers and motherboards as devices meeting the same criteria but not known to be an issue at the adoption of the current regulation. • Subparagraph (B), maintains the device modification language of the current regulation. • Subsection (a), paragraph (2), would prohibit patient personal possession of digital media recording devices, including but not limited to Compact Discs (CDs), Digital Video Discs (DVDs), and Blu−Ray burners. • Subsection (a), paragraph (3), would prohibit patient personal possession of voice or visual recording devices. • Subsection (a), paragraph (4), would prohibit patient personal possession of any items capable of memory storage. • Subsection (a), paragraph (4), subparagraph (A), prohibits patient possession of any device capable of patient−accessible digital memory or remote memory access. • Subsection (a), paragraph (4), subparagraph (B), prohibits patient possession of recordable disks. • Subsection (a), paragraph (4), subparagraph (C), prohibits patient personal possession of USB devices. • Subsection (a), paragraph (4), subparagraph (D), prohibits patient personal possession of various data storage devices and describes future devices of similar purpose. • Subsection (a), paragraph (4), subparagraph (E), prohibits patient possession of gaming devices with personally accessible digital memory, the ability to access the internet, or the ability to play games o r other media not proprietary to the device. • Subsection (a), paragraph (4), subparagraph (F), prohibits patient possession of memory storage and audio/visual items that can be recorded on to store or distribute illegal or illicit material. • Subsection (b), would delineate electronic items patients are permitted to access when they do not conflict with subsection (a). • Subsection (b), paragraph (1), limits the number of electronic items patients are permitted and codifies limits set by individual contraband authority currently enforced at a majority of DSH’s hospitals for patient space, fire code, and enforcement purposes. • Subsection (b), paragraph (2), would limit the number of commercially manufactured and unmodified disks immediately accessible to the patients to 30. • Subsection (b), paragraph (3), also permits tablets or other devices designed for confined individuals through authorized vendors of DSH or California Department of Corrections and Rehabilitation (CDCR). • Subsection (c), would reiterate Welfare and Institutions Code,

section 7295, by permitting the hospitals to create a more comprehensive contraband list as appropriate for the safety of the patient population or the hospital. • Subsection (d), would permit hospitals to make items prohibited from patient possession available on a supervised basis. Subsection (

d) also limits any data storage device within access of a patient to be no greater than eight gigabytes (8GB). Comparable to Federal Law There are no existing federal regulations or statutes comparable to the proposed regulations to manage elec- tronic devices within a California DSH facility Policy Statement Overview/Anticipated Benefits The objective of the proposed amendments is to im- plement, regulations pursuant to Welfare and Institu- tions Code, sections 4005.1, 4027, 4101, and 7295, by expanding prohibitions against patient possession of digital memory devices and certain electronic devices.

The regulation would specify what items patients are prohibited from possessing. The regulation will provide

CALIFORNIA REGULATORY NOTICE REGISTER 2018, VOLUME NO. 31-Z 1220 for uniform prohibitions statewide, at each DSH state hospital for the welfare of the public, DSH staff, and ev- ery DSH patient. By amending

section 4350, title 9, CCR, DSH can better serve the public by enforcing child pornography prohibitions, better serve DSH staff and patients by minimizing threats to safety and security, and better serve the patients of DSH by providing a more thera- peutic inpatient environment by better controlling trig- gers, stimuli, and temptations. DSH has a legitimate governmental duty in protect- ing the public, patients, and the functions of the facility while providing treatment to the type of patient popula- tions entrusted to DSH.

This interest includes protect- ing victims of child pornography from possession and distribution of their victimization by our patient popu- lation. This interest also includes protecting members of the public and staff from victimization over the inter- net by our patients, protecting the facility by preventing aerial maps and other information about the facility from being downloaded and distributed, and creating the most therapeutic and secure inpatient hospital set- ting possible. Patients’ inappropriate and illegal use of electronic items is dangerous.

For both of our forensic and civilly committed patients, DSH must balance safety and pa- tient rights to property. The dangers to the public, other patients, the staff, and facility outweigh a patient’s de- sire to unlimited access to electronic devices. The abili- ty to enforce safety over patient property access is sup- ported by law (Welf. & Inst. Code, §§ 4011, 4027, 4101, 4109, 7295; Cal Code Regs., tit. 9, § 884) as well as ju- dicial precedent.

Restrictions on electronic devices do not interfere with patient’s constitutional rights to communication as they still may use the phone, writing, typing and print- ing without internet. There is no constitutional right to possess or access an electronic device. Therefore, restricting electronic devices is an appro- priate response to the present issues and dangers.

Evaluation of Inconsistency or Incompatibility with Existing State Regulations During the development of this regulatory action, DSH reviewed the regulations on this topic and con- cluded that the proposed amendments are neither incon- sistent nor incompatible with existing state regulations or statutes. In arriving at this conclusion, DSH reviewed the Welfare and Institutions Code, the Penal Code, and its own regulations in title 9 of the CCR.

As provided in Welfare and Institutions Code sections 4011 and 4109, DSH is vested with jurisdiction and supervision over all hospitals as designated in Welfare and Institutions Code

section 4100. The scope and content of DSH’s regulato- ry authority is set forth in Welfare and Institutions Code, sections 4005.1, 4027, 4101 and 4109. MANDATES ON LOCAL AGENCIES OR SCHOOL DISTRICTS DSH anticipates there will be no fiscal impact to Lo- cal Agencies. This proposed regulation would only af- fect the state hospitals and the patients. The local gov- ernment would not have an additional role on the en- forcement of the regulation. Mandate Requires State Reimbursement Pursuant to

Part 7 (commencing with §17500) of Division 4 of the Government Code: None. FISCAL IMPACT ESTIMATES DISCLOSURES REGARDING THE PROPOSED REGULATIONS Costs to any Local Agency or School District that Requires Reimbursement Pursuant to

Part 7, commencing with

Section 17500, of Division 4 of the Government Code: DSH anticipates there will be no fiscal impact to Lo- cal Agencies or School Districts. Fiscal Impact on Public Agencies Including Costs or Savings to State Agencies or Costs/Savings in Federal Funding to the State: DSH anticipates increased costs of hospital security, including overtime, while the regulation is implement- ed and legal costs to respond to litigation in response to the regulation. Further, DSH anticipates costs of USP devices and other equipment to be used on a supervised check−out basis for patients.

DSH may continue to find more illegal content in the existing electronic devices of the patients, completing this search will take more staff time and may require more storage space at the facility to properly search these items. After the regulations have been promulgated, DSH would incur savings as it would be easier to enforce the contraband policy within the facilities and would decrease the need for searches to find contraband devices.

At the time emergency regulations on this issue were adopted in 2010, it was unknown how many digital stor- age devices patients would submit purporting to contain appropriate material to be transferred to a state−issued data storage device. Prior to transferring the informa- tion, DSH would need to review the devices for illegal material. Currently, only 160 patients out of approxi- mately 1300 patients submitted devices containing ap- propriate material, and the search of these devices is complete. Since the adoption of the emergency regula-

CALIFORNIA REGULATORY NOTICE REGISTER 2018, VOLUME NO. 31-Z 1221 tion, DSH has incurred costs of approximately $920,000. Coalinga State Hospital’s implementation costs are estimated to be approximately $881,700. Pat- ton State Hospital has spent approximately $2000 on implementation by purchasing flash drives. Napa State Hospital’s implementation costs are negligible and both Metropolitan and Atascadero State Hospitals had no fiscal impact because implementation of the regulation had no impact.

The financial impact to search data stor- age devices for appropriate material is now expected to be minimal at every hospital. Litigation costs statewide from January 2018 through May 2018 is estimated to be $35,265. DSH is not aware of any other costs/savings to any other public agency. There will be no costs or sav- ings in federal funding to the state because federal fund- ing is not connected to the use of electronics by individ- ual patients. Non−Discretionary Costs or Savings Imposed on Local Agencies: DSH anticipates there will be no fiscal impact to Lo- cal Agencies.

This proposed regulation would only af- fect the state hospitals and the patients. The local gov- ernment would not have an additional role on the en- forcement of the regulation. HOUSING COSTS In accordance with Government Code

Section 11346.5, subdivision (a)(12), the Department has made the initial determination that the proposed regulatory action will not have a significant effect on housing costs. These proposed regulations do not impact hous- ing since they affect only inmates in California Depart- ment of Corrections and Rehabilitation custody or indi- viduals committed to the Department and in Depart- ment custody.

SIGNIFICANT, STATEWIDE ADVERSE ECONOMIC IMPACT DIRECTLY AFFECTING BUSINESS There will not be a significant, statewide adverse eco- nomic impact directly affecting business, including the ability of California businesses to compete with busi- nesses in other states. RESULTS OF THE ECONOMIC IMPACT ANALYSIS Creation or Elimination of Jobs within the State of California: It has been determined that the proposed action will not affect the creation or elimination of jobs.

Instead, it better assists current positions by assisting law enforce- ment in maintaining a safe environment as well as as- sisting treatment staff in creating a more therapeutic in- patient setting. Creation of New Businesses or Elimination of Existing Businesses within the State of California: It has been determined that the proposed action will not affect the creation of new businesses or the elimina- tion of existing businesses. It only makes adjustments to allowable patient property for safety and therapeutic reasons.

Expansion of Business Currently doing Business within the State of California: It has been determined that the proposed action will not affect the expansion of businesses currently doing business in California. It only makes adjustments to al- lowable patient property for safety and therapeutic reasons.

Benefits of the regulation to the Health and Welfare of California Residents: It has been determined that the proposed action will protect the health, safety, and general welfare of Cali- fornia residents by reducing if not eliminating dangers to the public, patients, and staff generated by unlimited access to electronic devices by Department of State Hospital patients who are housed in secure inpatient mental health facilities.

The dangers posed to Califor- nia residents include: • The possession and distribution of child pornography, facility area maps, and harmful information on victims, staff, and other patients; • Access to previous victims and the ability to create new victims through the internet; • Harm to therapeutic treatment for the possessing patient; and • Harm to therapeutic treatment environment for surrounding patients or patients encountering images or discussions on triggering topics.

Worker Safety/State’s Environment: It has been determined that the proposed action will positively affect worker safety because it will create a more therapeutic environment, and better control safety concerns and breaches at the hospitals. It has been de- termined that the proposed action will not affect the State’s environment because it has nothing to do with environmental issues. COST IMPACT ON REPRESENTATIVE PRIV ATE PERSON OR BUSINESS DSH is not aware of any cost impacts that a represen- tative private person or business would necessarily in- cur in reasonable compliance as a result of the proposed action.

CALIFORNIA REGULATORY NOTICE REGISTER 2018, VOLUME NO. 31-Z 1222 EFFECT ON SMALL BUSINESS There will be no cost impact on small businesses be- cause the proposed regulation only affects individual patients who are in state hospitals. SPECIFIC TECHNOLOGIES OR EQUIPMENT The proposed action does not mandate the use of spe- cific technologies or equipment. CONSIDERATION OF ALTERNATIVES In accordance with Government Code

section 11346.5, subdivision (a)(13), the Department must de- termine that no reasonable alternatives it considered or that have otherwise been identified and brought to its at- tention would be either more effective in carrying out the purpose for which the action is proposed, would be as effective and less burdensome to affected private per- sons than the proposed regulation, or more cost effec- tive to affected private persons and equally effective in implementing the statutory policy or other provision of law. Set forth below are the alternatives that were considered and the reasons each alternative was rejected: Alternative: Fully enforce

section 4350 without amendment. Reason for Rejection: The current regulation fails to exempt the hospital and staff from the prohibition on the use of electronics. Enforcing the current

section 4350 would eliminate the ability for the hospital and staff to utilize computers and electronic personal safety de- vices, necessary for a safe and efficient secured inpa- tient hospital. Alternative: Prohibit patients from possessing all electronic devices. Reason for Rejection: While prohibiting patients from possessing all electronic items would eliminate harm created by the devices and subsequent illegal ac- cess to the internet, it would also eliminate the ability of the devices to be used for healthy purposes as well.

The goal of this proposed action was to eliminate harm while maintaining therapeutic uses of electronics. Thus, a total prohibition was not determined to be a proper balance at this time, creating more burdensome restrictions than necessary on patients and treatment staff. AGENCY CONTACT PERSONS Inquiries concerning the substance of the proposed regulatory action may be directed to the agency repre- sentatives: Amy Whiting, Manager, Regulations Unit, by telephone at (916) 654−2748 or (designated back up person) Trini Balcazar, Regulations Coordinator, Regu- lations Unit, by telephone at (916) 562−2824.

A V AILABILITY OF DOCUMENTS The Department staff has compiled a record for this rulemaking action which includes all the information upon which the proposal is based, including an Initial Statement of Reasons (ISOR) for the proposed regula- tory action and the proposed text (the “express terms”) of the regulation. Copies of the proposed regulation text and the ISOR, which includes a

summary of the eco- nomic and fiscal impacts of the proposal, may be ac- cessed on the Department’s Internet web site listed be- low or may be obtained from the agency representative to whom non−substantive inquiries concerning the pro- posed administrative action may be directed: Trini Bal- cazar, Regulations Coordinator, Regulations Unit, by telephone at (916) 562−2824. HEARING PROCEDURES The public hearing will be conducted in accordance with the California Administrative Procedure Act, Government Code, title 2, division 3,

part 1,

chapter 3.5 (commencing with § 11340). After holding the public hearing, and considering all timely and relevant com- ments received, the Department may adopt the pro- posed regulations substantially as described in this no- tice. If the Department makes modifications which are sufficiently related to the originally proposed text, with the exception of grammatical changes, it will make the modified text (with the changes clearly indicated) avail- able to the public for at least 15 days before the Depart- ment adopts the regulations as revised.

Please send re- quests for copies of any modified regulations to the at- tention of the contact person at the address indicated above. The Department will accept written comments on the modified regulations for 15 days after the date on which they are made available. A V AILABILITY OF THE FINAL STATEMENT OF REASONS Upon its completion, the Final Statement of Reasons (FSOR) shall be available and copies may be requested from the agency contact persons in this notice or may be accessed on the Department’s Internet web site listed below.

INTERNET ACCESS This notice, the ISOR, the proposed regulation text, and all subsequent regulatory documents, including the

CALIFORNIA REGULATORY NOTICE REGISTER 2018, VOLUME NO. 31-Z 1223 FSOR, when completed, are available on the Depart- ment’s web site for this rulemaking at http://www.dsh.ca.gov/Publications/Regulations.aspx. TITLE 10. DEPARTMENT OF INSURANCE A VERAGE CONTRACTED RATE METHODOLOGY (AB 72) REG−2018−00016 SUBJECT OF PROPOSED RULEMAKING Notice is hereby given that the California Department of Insurance (“the Department”) proposes to adopt Cal- ifornia Code of Regulations (“CCR”) Title 10,

Chapter 5, Subchapter 2,

Article 5.1, sections 2238.10, 2238.11, and 2238.12 after considering comments from the pub- lic. (All references to the CCR in this Notice are refer- ences to sections in CCR Title 10.) The Department pro- poses to add these sections under the authority granted by California Insurance Code (“CIC”) sections 10112.8 and 10112.82. The regulations govern the methodology for calculat- ing the average contracted rate (ACR) for purposes of determining the reimbursement of individual noncon- tracting health professionals who provide covered ser- vices to insureds at contracting health facilities.

HEARING Public Hearing Date and Location The Department will hold a public hearing to provide all interested persons an opportunity to present statements or arguments, orally or in writing, with respect to the proposed regulations, as follows: Date: September 17, 2018 Time: 11:00 a.m. If it is necessary for the hearing to exceed one hour, there will likely be a one−hour break from 12:00 noon to 1:00p.m.

Location: California Department of Insurance 300 Capitol Mall, 13th Floor, Room 13025 Sacramento, California The hearing will continue on the date noted above un- til all testimony has been submitted or until 2:00 p.m., whichever is earlier. Access to Hearing Rooms The facilities to be used for the public hearing are ac- cessible to persons with mobility impairments. Persons with sight or hearing impairments are requested to noti- fy the contact person(

s) for the hearing in order to make special arrangements, if necessary. WRITTEN COMMENT PERIOD Presentation of Written Comments; Contact Persons All persons are invited to submit written comments on the proposed regulations during the public comment period. The public comment period will end at 5:00 p.m. on September 17, 2018.

Please direct all written comments to the following contact person: Bruce Hinze, Attorney IV California Department of Insurance 45 Fremont Street, 24th Floor San Francisco, CA 94105 Telephone: (415) 538−4392 Bruce.Hinze@insurance.ca.gov Questions regarding procedure, comments, or the substance of the proposed action should be addressed to the above contact person.

In the event the contact per- son is unavailable, inquiries regarding the proposed ac- tion may be directed to the following backup contact person: Sheirin Ghoddoucy, Attorney III California Department of Insurance 300 Capitol Mall, 17th Floor Sacramento, CA 95814 Telephone: (916) 492−3591 Sheirin.Ghoddoucy@insurance.ca.gov Please note that under the California Public Records Act (Government Code

Section 6250, et seq.), your written and oral comments, and associated contact in- formation (e.g., your address, phone number, e−mail, etc.) become part of the public record and can be re- leased to the public upon request. Deadline for Written Comments All written materials must be received by the Depart- ment, addressed to the contact person at her address list- ed above, no later than 5:00 p.m. on September 17, 2018. Any written materials received after that time may not be considered. Please identify the action in any written comments by using the Department’s rulemaking title and control

CALIFORNIA REGULATORY NOTICE REGISTER 2018, VOLUME NO. 31-Z 1224 number, Average Contracted Rate Methodology (AB 72), Control No. 2018−00016. Comments Transmitted by E−Mail or Facsimile The Department will accept written comments trans- mitted by e−mail provided they are sent to the following two e−mail addresses: Bruce.Hinze@insurance.ca.gov and Sheirin.Ghoddoucy@insurance.ca.gov. The De- partment will also accept written comments transmitted by facsimile provided they are directed to the attention of Bruce Hinze and sent to the following facsimile num- ber: (415) 904−5729.

However, e−mail comments are preferred. Comments sent to other e−mail addresses or other facsimile numbers will not be accepted. Comments sent by e−mail or facsimile are subject to the dead- line set forth above for written comments. AUTHORITY AND REFERENCE (Government Code § 11346.5(a)(2); 1 CCR § 14) The Department proposes the adoption of Title 10,

Chapter 5, Subchapter 2,

Article 5.1, sections 2238.10, 2238.11, and 2238.12 pursuant to the rulemaking au- thority provided by Insurance Code sections 10112.8 and 10112.82. The Department’s proposed additions of CCR sec- tions 2238.10, 2238.11, and 2238.12 will implement, interpret, and make specific the provisions of Insurance Code sections 10112.8 and 10112.82, California Insur- ance Code. INFORMATIVE DIGEST

Summary of Existing Law Insurance Code

section 10112.8, enacted by Assem- bly Bill (AB) 72 (Stats. 2016, Chpt. 492), requires that if an insured receives covered services from a contracting health facility at which, or as a result of which, the in- sured receives services provided by a noncontracting individual health professional, the insured shall pay no more than the same cost−sharing that the insured would have paid if the services had been provided by a con- tracting individual health professional.

Subject to limit- ed exceptions, the noncontracting health professional may not “balance bill” or collect any amount from the insured except the in−network cost−sharing amount. For services rendered pursuant to Insurance Code sec- tion 10112.8, unless otherwise agreed to by the noncon- tracting individual health professional and the insurer, the insurer shall reimburse the greater of the average contracted rate or 125 percent of the amount Medicare reimburses on a fee−for−service (FFS) basis for the same or similar services in the general geographic re- gion in which the services were rend

Document details

Collection	California Z Register
Citation	Cal. Reg. Notice Reg. 2018, No. 31
Type	gazette
Language	en
Format	pdf
Source	CA_ZREG
Identifier	2d5c7d69f1989d7ec8843633af4b09a320f67585

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