(Continued on next page) REGISTER Time- Dated Material EDMUND G. BROWN, JR., GOVERNOR OFFICE OF ADMINISTRATIVE LAW 2018, NO. 32−Z PUBLISHED WEEKLY BY THE OFFICE OF ADMINISTRATIVE LAW AUGUST 10, 2018 PROPOSED ACTION ON REGULATIONS TITLE 2. FAIR POLITICAL PRACTICES COMMISSION Conflict−of−Interest Code — Notice File No. Z2018−0731−01 ........................................ 1251 Adoption Multi−County: Riverside Schools Risk Management Authority Riverside Schools’ Insurance Authority JPA Amendment State Agency: Office of State Treasurer Multi−County: Desert Community College District TITLE 4.

CALIFORNIA HORSE RACING BOARD Horse Ineligible to Start in a Race — Notice File No. Z2018−0726−03 .................................. 1252 TITLE 4. CALIFORNIA HORSE RACING BOARD Jockey Riding Fees — Notice File No. Z2018−0726−02 ............................................... 1255 TITLE 10. GOVERNOR’S OFFICE OF BUSINESS AND ECONOMIC DEVELOPMENT California Competes Tax Credit — Notice File No. Z2018−0731−04 ................................... 1259 TITLE 11. COMMISSION ON PEACE OFFICER STANDARDS AND TRAINING First Aid/CPR/AED Instructor Course — Notice File No.

Z2018−0725−01 .............................. 1261 TITLE 13. AIR RESOURCES BOARD Amendments to Low — Emission Vehicle III GHG — Notice File No. Z2018−0724−07 ..................... 1263 TITLE 13. AIR RESOURCES BOARD Innovative Clean Transit Regulation — Notice File No. Z2018−0724−06 ................................ 1269 TITLE 14. BOARD OF FORESTRY AND FIRE PROTECTION SRA Fire Safe Regulations, 2020 — Notice File No. Z2018−0730−01 .................................... 1281 TITLE 15. CALIFORNIA PRISON INDUSTRY AUTHORITY Personnel — Notice File No.

Z2018−0613−02 ..................................................... 1286

DECISION NOT TO PROCEED DEPARTMENT OF JUSTICE Concerning Dealer Record of Sale (DROS) Entry System (DES) (Previously Published in Notice Register 2018, No. 11−Z) .............................................................. 1289 RULEMAKING PETITION DECISIONS DEPARTMENT OF PUBLIC HEALTH Notice of Decision on Petition from Hannah Y. Chanoine Concerning Processed Pet Food .................. 1289 DEPARTMENT OF PUBLIC HEALTH Notice of Decision on Petition from Philip R.

Recht Concerning General Acute Care Hospital (GACH) Administration Regulations ..................................................... 1290 ACCEPTANCE OF PETITION TO REVIEW ALLEGED UNDERGROUND REGULATIONS DEPARTMENT OF CORRECTIONS AND REHABILITATION Department of Operational Manual

Article 25,

Section 52100.4 ....................................... 1291

SUMMARY OF REGULATORY ACTIONS Regulations filed with the Secretary of State ........................................................ 1294 Sections Filed, February 28, 2018 to August 1, 2018 ................................................. 1296 The California Regulatory Notice Register is an official state publication of the Office of Administrative Law containing notices of proposed regulatory actions by state regulatory agencies to adopt, amend or repeal regulations contained in the California Code of Regulations.

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

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

CALIFORNIA REGULATORY NOTICE REGISTER 2018, VOLUME NO. 32-Z 1251 PROPOSED ACTION ON REGULATIONS Information contained in this document is published as received from agencies and is not edited by Thomson Reuters. TITLE 2.

FAIR POLITICAL PRACTICES COMMISSION NOTICE IS HEREBY GIVEN that the Fair Political Practices Commission, pursuant to the authority vested in it by Sections 82011, 87303, and 87304 of the Gov- ernment Code to review proposed conflict−of−interest codes, will review the proposed/amended conflict−of− interest codes of the following: CONFLICT−OF−INTEREST CODES ADOPTION MULTI−COUNTY: Riverside Schools Risk Management Authority Riverside Schools’ Insurance Authority JPA AMENDMENT STATE AGENCY: Office of the State Treasurer MULTI−COUNTY: Desert Community College District A written comment period has been established com- mencing on August 10, 2018, and closing on September 24, 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 24, 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 Gov- ernment 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.

CALIFORNIA REGULATORY NOTICE REGISTER 2018, VOLUME NO. 32-Z 1252 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. TITLE 4.

CALIFORNIA HORSE RACING BOARD NOTICE OF PROPOSAL TO AMEND RULE 1588, HORSE INELIGIBLE TO START IN A RACE AND THE PROPOSED ADDITION OF RULE 1842.1, ADDITIONAL REPORTING FOR INTRA−ARTICULAR TREATMENTS The California Horse Racing Board (Board or CHRB) proposes to amend/add the regulations de- scribed below after considering all comments, objec- tions or recommendations regarding the proposed action. PROPOSED REGULATORY ACTION The Board proposes to amend Rule 1588, Horse Inel- igible to Start in a Race, and to add Rule 1842.1, Addi- tional Reporting for Intra−Articular Treatments.

The proposed amendment to Rule 1588 will add subsection 1588(m). The new subsection 1588(

m) provides that a horse that has received an intra−articular injection (joint injection) within the previous five days (120 hours) pri- or to the scheduled post−time for the race in which it is entered shall be ineligible to start in such race. The pro- posed addition of Rule 1842.1 will require veterinarians administering medication or treatment into an articular structure of a horse located within the inclosure to pro- vide an intra−articular treatment record to the trainer, who shall maintain such records of the treatment for a minimum of one year.

The trainer shall make such records available to the examining veterinarian for the purpose of assisting with pre−race veterinary examina- tions or other examinations as required by the Board. The record of the inter−articular treatment shall be recorded on the form CHRB−24A, Intra−Articular Treatment Record (New 05/18), which is incorporated by reference in Rule 1842.1, and shall state the name of the horse treated, the date and time of the treatment, the intra−articular structures treated, the medication ad- ministered, dose, and the reason for the treatment.

PUBLIC HEARING The Board will hold a public hearing starting at 9:30 a.m., Thursday, September 27, 2018, or as soon there- after 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 rel- evant to the proposed action described in the informa- tive digest. It is requested, but not required, that persons making oral comments at the hearing submit a written copy of their testimony.

WRITTEN COMMENT PERIOD Any interested persons, or their authorized represen- tative, may submit written comments about the pro- posed regulatory action to the Board. The written com- ment period closes at 5:00 p.m. on September 24, 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 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 Rule 1588: Authority: Sections 19440 and 19562, Business and Professions Code. Reference: Sections 19440 and 19562, Business and Professions Code. Rule 1842.1: Authority: Sections 19440, 19562, and 19580, Busi- ness and Professions Code. Reference: Sections 19440, 19562, and 19580, Business and Professions Code.

CALIFORNIA REGULATORY NOTICE REGISTER 2018, VOLUME NO. 32-Z 1253 INFORMATIVE DIGEST/POLICY STATEMENT OVERVIEW Business and Professions Code

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

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

section 19580 pro- vides that the Board shall adopt regulations to establish policies, guidelines, and penalties relating to equine medication in order to preserve and enhance the integri- ty of horse racing in the state. In the fall of 2012, the New York Task Force on Race- horse Health and Safety (Task Force) made a number of recommendations based on its investigation of breakdowns that occurred at the Aqueduct 2011−2012 Fall−Winter race meeting at Aqueduct Race Course in New York.

In addition to investigating the rash of breakdowns, the Task Force was charged with advising on policies relating to necropsies, track conditions, and pre−race examination of horses, as well as practices relating to veterinary procedures and equine drug use. The Task Force’s recommendations included enhanced restrictions on the use of intra−articular corti- costeroids, which are anti−inflammatory drugs admin- istered by entering a joint.

Specifically, the recommen- dations included trainer reporting requirements for intra−articular treatments, as well as a prohibition on racing after an intra−articular corticosteroid injection. Also, in 2012, the Racing, Medication and Testing Con- sortium (RMTC) issued its own set of corticosteroid thresholds. The RMTC is an industry organization that works to develop and promote uniform rules and testing standards at the national level.

It coordinates research and educational programs that seek to ensure the in- tegrity of racing and the health and welfare of racehors- es and participants, and to protect the interests of the racing public. In 2012, the Board adopted the RMTC standards by amending Rule 1844, Authorized Medica- tion, to provide for levels of corticosteroids that may be present in official test samples.

While the corticosteroid thresholds contained in the amendment to Rule 1844 ef- fectively stopped corticosteroids from being used with- in days of a race, the rule did not provide a “stand− down” time as recommended by New York’s Task Force. Rule 1844 treated corticosteroid injections no differently than other authorized medications, which can be administered until 48 of post−time pursuant to Rule 1843.5, Medication, Drugs and Other Substances Permitted After Entry in a Race. To address the issue, the proposed amendment to Rule 1588 adds a new sub-

section 1588(m). The new subparagraph provides that a horse that has received an intra−articular injection with- in the previous five days (120 hours) prior to the sched- uled post−time for the race in which it is entered, is inel- igible to start in such race. The proposed addition of subsection 1588(

m) leaves Rule 1844’s allowable lev- els of corticosteroids in place while providing a “stand− down” time as recommended by New York’s Task Force. The proposed addition of Rule 1842.1 would require all Board−licensed veterinarians who administer a medication or treatment into an articular structure of a horse to provide the horse’s trainer with a written record of the treatment. The procedure shall be recorded on the form CHRB−24A, Intra−Articular Treatment Record (New 05/18) (CHRB−24A), which is incorporated by reference in Rule 1842.1.

The trainer shall maintain all intra−articular treatment records of horses under his or her care for a minimum of one year from the date of the treatments. The records of intra−articular treatments shall be made available to examining veterinarian for the purpose of pre−race, or other examinations as re- quired pursuant to the Board’s rules and regulations. The CHRB−24A requires the veterinarian who admin- isters the intra−articular treatment to record the date and time of treatment, the intra−articular strictures treated, the medication administered, the dose and the reason for the treatment.

POLICY STATEMENT OVERVIEW OF ANTICIPATED BENEFITS OF PROPOSAL The proposed amendment to Rule 1588 adds a new subsection !588(m), which provides that a horse that has received an intra−articular injection within the pre- vious five days (120 hours) prior to the scheduled post− time for the race in which it is entered, is ineligible to start in the race. An intra−articular injection is a proce- dure used in the treatment of inflammatory joint conditions; however, the procedure may not necessarily heal the problem that is causing inflammation.

In addition, inflammation is part of the healing process, so there is a relationship between the proposed timeframe of five days and allowing healing. The addition of sub-

section 1588(

m) will promote the health and safety of racehorses. The health and safety of jockeys will also be advanced, as a reduction in equine injuries and sudden deaths may also mean lower jockey injury rates. Ad- ministering the procedure not later than five days prior to the scheduled post−time provides an opportunity for the medication to have an effect. In addition, the intra− articular injections are not administered within 48 hours of post−time, and this gives the examining veterinarian

CALIFORNIA REGULATORY NOTICE REGISTER 2018, VOLUME NO. 32-Z 1254 an opportunity to evaluate the horse without the injec- tion being administered so close to the prerace exami- nation (Rule 1846, Racing Soundness Examination, provides that the horse shall be subject to a veterinary examination for racing soundness on race day not later than two hours prior to official post−time for the race in which the horse is entered.) Ensuring the health of race- horses protects the financial interests of racing associa- tions, horse owners, trainers and jockeys.

Racing asso- ciations depend on an inventory of sound horses to fill races and generate handle; owners and trainers suffer fi- nancial losses when horses are unable to compete for a purse; and injured jockeys lose income when they are unable to ride. The proposed addition of Rule 1842.1 would require all Board−licensed veterinarians who administer a medication or treatment into an articular structure of a horse to provide the horse’s trainer with a written record of the treatment. The procedure shall be recorded on the form CHRB−24A, which is incorporated by reference in Rule 1842.1.

The trainer shall maintain all intra− articular treatment records of horses under his or her care for a minimum of one year from the date of the treatments. The records of intra−articular treatments shall be made available to examining veterinarian for the purpose of pre−race, or other examinations as re- quired pursuant to the Board’s rules and regulations. The proposed addition of Rule 1842.1 will work in con- junction with the amended Rule 1588 to protect the health and safety of horse and rider.

The recording of in- tra−articular procedures on the form CHRB−24A will make race−day examinations more meaningful, as the trainer can provide a record of such procedures for the examining veterinarian. In turn, the examining veteri- narian can make a more complete assessment of the horse. Thorough pre−race examinations ensure the soundness of horses entered to race. Sound racehorses help protect the health and safety of jockeys, as well as the financial interests of racing associations, owners and trainers.

The form CHRB−24A, is incorporated by reference in Rule 1842.1, as it would be cumbersome, unduly expensive or otherwise impractical to publish the document in the California Code of Regulations. CONSISTENCY EV ALUATION During the process of developing these regulations and amendments, the CHRB has conducted a search of any similar regulations on this topic and has concluded that these regulations are neither inconsistent nor in- compatible with existing state regulations. DISCLOSURE REGARDING THE PROPOSED ACTION/RESULTS OF THE ECONOMIC IMPACT ANALYSIS Mandate on local agencies 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

Section 17500 through 17630: none. Other non−discretionary cost or savings imposed up- on local agencies: none. Cost or savings in federal funding to the state: none. The Board has made an initial determination that the proposed amendment to Rule 1588 and the addition of Rule 1842.1 will not have a significant statewide ad- verse economic impact directly affecting business in- cluding 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: New York Task Force on Racehorse Health and Safety Official Report. Investigation of Equine Fatalities at Aqueduct 2011−2012 Fall/Winter Meet. Cost impact on representative private persons or businesses: The Board is not aware of any cost impacts that a representative private person or business would necessarily incur in reasonable compliance with the proposed action. Significant effect on housing costs: none.

RESULTS OF THE ECONOMIC IMPACT ASSESSMENT The adoption of the proposed amendment to Rule 1588 and the addition of Rule 1842.1 will not (1) impact the creation of, or eliminate jobs within the State of Cal- ifornia; (2) impact the creation of new businesses or eliminate existing businesses within California; or (3) affect the expansion of businesses currently doing busi- ness within California.

The proposed amendment to Rule 1588 and the addi- tion of Rule 1842.1 is a benefit to the health and welfare of California residents who hold occupational licenses as jockeys, apprentice jockeys or other licensees that re- quire close proximity to racehorses, because the pro- posed regulations safeguard the health and safety of California’s racing equines. Sound racehorses help pre- vent accidents and injuries to horse and rider. Effect on small businesses: none.

The proposal to amend Rule 1588 and the addition of Rule 1842.1 does not affect small businesses because horseracing is not a small business under Government Code

Section 11342.610.

CALIFORNIA REGULATORY NOTICE REGISTER 2018, VOLUME NO. 32-Z 1255 CONSIDERATION OF ALTERNATIVES In accordance with Government Code

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

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

CONTACT PERSON Inquiries concerning the substance of the proposed action and requests for copies of the proposed text of the regulation, the initial statement of reasons, the modified text of the regulation, if any, and other information upon which the rulemaking is based should be directed to: Harold Coburn Regulation Analyst California Horse Racing Board 1010 Hurley Way, Suite 300 Sacramento, CA 95825 Telephone: (916) 263−6026 Fax: (916) 263−6022 E−mail: haroldc@chrb.ca.gov If the person named above is not available, interested parties may contact: Andrea Ogden, Manager Policy, Regulations and Legislation Telephone: (916) 263−6033 A V AILABILITY OF INITIAL 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 texts of the regulations, and the initial statement of rea- sons. Copies of these documents, or any of the informa- tion upon which the proposed rulemaking is based, 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 texts, the mod- ified texts, with changes clearly marked, shall be made available to the public for at least 15 days prior to the date on which the Board adopts the regulations. Re- quests for copies of any modified regulations should be sent to the attention of Harold Coburn at the address stated above.

The Board will accept written comments on the modified regulation for 15 days after the date on which it is made available. A V AILABILITY OF FINAL 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 the notice, the proposed text of the regulations and the initial state- ment of reasons. The Board’s website address is: www.chrb.ca.gov. TITLE 4. CALIFORNIA HORSE RACING BOARD NOTICE OF PROPOSAL TO AMEND RULE 1632, JOCKEY’S RIDING FEE The California Horse Racing Board (Board, or CHRB) proposes to amend the regulation described be- low after considering all comments, objections or rec- ommendations regarding the proposed action.

PROPOSED REGULATORY ACTION The Board proposes to amend Rule 1632, Jockey’s Riding Fee, to amend subsection 1632(b), which pro- vides the jockey riding fees for losing mounts. The los-

CALIFORNIA REGULATORY NOTICE REGISTER 2018, VOLUME NO. 32-Z 1256 ing mount jockey riding fees under subsection 1632(

b) have been increased consistent with California’s 2019 minimum wage increase, which is 9.09 percent. The proposed amendment also deletes the dollar amounts for second and third place mounts in the “Less than $10,000” category. The Board proposed to remove the second and third place mount fees under subsection 1632(b), as subsections 1632(b)(3) through 1632(b)(5) provide direction regarding the amounts to be paid non− winning jockeys, depending on the gross purse level. In addition, the proposed amendment amends subsection 1632(b)(5) for purposes of clarity.

PUBLIC HEARING The Board will hold a public hearing starting at 9:30 a.m., Thursday, September 27, 2018, or as soon there- after 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 rel- evant to the proposed action described in the informa- tive digest. It is requested, but not required, that persons making oral comments at the hearing submit a written copy of their testimony.

WRITTEN COMMENT PERIOD Any interested persons, or their authorized represen- tative, may submit written comments about the pro- posed regulatory action to the Board. The written com- ment period closes at 5:00 p.m. on September 24, 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, 19501 and 19562, Business and Professions Code. Reference: Sections 19401 (a), 19401 (d), 19420, 19440, 19501, and 19502, Business and Professions Code. INFORMATIVE DIGEST/POLICY STATEMENT OVERVIEW Business and Professions Code

section 19401(

a) and (

d) provides that the intent of

Chapter 4 is to allow pari− mutuel wagering on horse races, while assuring protec- tion of the public and providing uniformity of regula- tion for each type of horse racing. Business and Profes- sions Code

section 19420 states jurisdiction and super- vision over meetings in California where horse races with wagering on their results are held or conducted, and over all persons or things having to do with the op- eration of such meetings, is vested in the California Horse Racing Board. 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 adopting rules and regulations for the protection of the public and the control of horse racing and pari−mutuel wagering. Business and Professions Code

section 19501 states that the scale of minimum jockey riding fees for losing mounts shall be increased whenever the state minimum wage is increased by the percentage of that increase. Business and Professions Code

section 19502 provides that the Board shall not permit any portion of an entry, nomination, or other fee paid by an owner to be deduct- ed from a jockey riding fee unless the entry, nomination, or other fee is paid exclusively by the owner and not re- imbursed by any other person or entity. Business and Professions Code

section 19562 provides that the Board may prescribe rules, regulations, and conditions, con- sistent with the provisions of this chapter, under which all horse races with wagering on their results shall be conducted in California. Business and Professions Code

section 19501(b)(1) requires an increase in the scale of minimum losing mount jockey riding fees whenever the state minimum wage is increased by the percentage of that increase. The next increase in California’s minimum wage will become effective January 1, 2019. The proposed amendment will increase subsection 1632’s losing mount jockey riding fees in accordance with Business and Professions Code

section 1950l(b)(1). Business and Professions Code

section 19501(b)(1) requires an increase in the scale of minimum (losing) jockey riding fees whenever the state minimum wage is increased by the percentage of that increase; however, it does not provide for an increase in second and third place mount fees. Rule 1632 currently provides specific dollar amounts to pay losing mounts, as well as the dol- lar amounts for second and third place mounts in the “Less than $10,000” category. Direction regarding sec- ond and third place mount fees is otherwise provided

CALIFORNIA REGULATORY NOTICE REGISTER 2018, VOLUME NO. 32-Z 1257 under the provisions of subsections 1632(b)(3) through 1632(b)(5). Subsection 1632(b)(3) states that the Paymaster of Purses shall use the Horsemen’s Agreement1 to deter- mine the horse owner’s place purse when calculating non−winning jockey riding fees. Horsemen’s Agree- ments state the percentage of the gross purse the horse owner will receive, based on the order of the finish. The owner’s percentage of the gross purse is the dollar amount from which the Paymaster of Purses will calcu- late jockey mount fees.

The riding fees for a race meet- ing are promulgated in the Paymaster of Purses’ jockey riding fee scale. Subsection 1632(b)(3) also provides that the losing mount riding fee shall be paid as provided under subsec- tion 1632(b). This is due to the fact that the losing mount fees are specific dollar amounts based on the require- ments of Business and Professions Code

section 19501. The minimum jockey riding fees for losing mounts are increased whenever California’s minimum wage is in- creased and are not based on the owner’s share of the gross purse. Therefore, the losing mount fees must be stated in the regulation. Subsection 1632(b)(4) provides the formula for cal- culating the second and third place mount fees for horse races with gross purses between $10,000 and $100,000 and up. Subsection 1632(b)(5) provides additional direction regarding second and third place mount fees. The sub-

section has been amended for clarity to provide that the third place mount shall earn at minimum $2 more than the losing mount, and the second place mount shall earn at minimum $2 more than the third place mount. Sub-

section 1632(b)(5) ensures that losing mount fees are never equal to or greater than third place mount fees, and that third place mount fees shall be less than second place fees. This is necessary because the periodic in- crease in losing mount fees mandated by statute has re- sulted in situations in which the losing mount fee under subsection 1632(

b) exceeds the third place mount fees. This is demonstrated by the most recent amendment of Rule 1632 (effective 01/01/18), which resulted in a los- ing mount fee under subsection 1632(

b) of $2 more than the third place mount fee. To provide consistency and clarity, subsection 1632(

b) has been amended to delete the dollar amounts for second and third place mounts in the “Less than $10,000” category. When calculating jockey riding fees for second and third place mounts, the Paymasters of Purses should use the race meeting’s jockey riding fee scales, which are based on the provisions of the Horse- men’s Agreements, in conjunction with subsections 1632(b)(4) and 1632(b)(5).

The proposed amendment will eliminate any inconsistencies that may arise due to the differences between the riding fees for second and third place mounts under subsection 1632(b), and the ongoing statutory increases to the losing mount fees. POLICY STATEMENT OVERVIEW OF ANTICIPATED BENEFITS OF PROPOSAL The proposed amendment to Rule 1632 amends sub-

section 1632(

b) to increase the losing mount jockey rid- ing fees, and to eliminate the dollar amounts for second and third place jockey riding fees for gross purses of less than $10,000. The Board has determined it is not necessary to state the dollar amounts, as subsections 1632(b)(3) through 1632(b)(5) provide direction for calculating fees to be paid non−winning riders. This will eliminate any disparity between the non−winning jockey riding fees and will deter jockeys from inten- tionally losing a race rather than put forth his best effort in order to earn more money.

This will increase the pub- lic’s confidence in California horse racing, which may result in increased wagering. An increase in wagering will have a positive economic impact on the industry by increasing handle, which in turn may increase purses and commissions. The specific benefits anticipated from the regulation are compliance with current law and a balanced fee scale which will result in a fair and honest race product.

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

Section 17500 through 17630: none. Other non−discretionary cost or savings imposed up- on local agencies: none. Cost or savings in federal funding to the state: none. 1An agreement for the conduct of a race meeting negotiated by the racing association and the organization that represents the horse owners and trainers of each separate breed of racehorse that com- petes in the meeting. The agreement addresses such issues as the conditions for the race meeting, the distribution of commissions and purses not governed by statutory formulas, and other matters relating to welfare, benefits and prerogatives of the parties to the agreement.

CALIFORNIA REGULATORY NOTICE REGISTER 2018, VOLUME NO. 32-Z 1258 The Board has made an initial determination that the proposed amendment to Rule 1632 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.

Cost impact on representative private persons or businesses: The Board is not aware of any cost impacts that a representative private person or business would necessarily incur in reasonable compliance with the proposed action. Significant effect on housing costs: none. RESULTS OF ECONOMIC IMPACT ASSESSMENT The adoption of the proposed amendment to Rule 1632 will not (1) create or eliminate jobs within Califor- nia; (2) create new businesses or eliminate existing businesses within California; or (3) affect the expansion of businesses currently doing business within Califor- nia.

The proposed amendment to Rule 1632 is a benefit to the health and welfare of California residents because it promotes fairness and compliance with current law. The proposed regulation will provide clarity in calculat- ing jockey riding fees for second and third place mounts which will create a balanced fee scale and eliminate any inequality. This will promote the public’s interest in a fair and honest race product by deterring a jockey from intentionally losing a race rather than put forth his best effort in order to earn more money. Effect on small businesses: none.

The proposal to amend Rule 1632 does not affect small businesses be- cause horse racing associations in California are not classified as small businesses under Government Code

Section 11342.610. CONSIDERATION OF ALTERNATIVES In accordance with Government Code

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

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

CONTACT PERSON Inquiries concerning the substance of the proposed action and requests for copies of the proposed text of the regulation, the initial statement of reasons, the modified text of the regulation, if any, and other information upon which the rulemaking is based should be directed to: Harold Coburn, Regulation Analyst California Horse Racing Board 1010 Hurley Way, Suite 300 Sacramento, CA 95825 Telephone: (916) 263−6026 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) 274−6033 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 regulations. Re- quests for copies of any modified regulations should be sent to the attention of Harold Coburn at the address stated above.

The Board will accept written comments on the modified regulation for 15 days after the date on which it is made available.

CALIFORNIA REGULATORY NOTICE REGISTER 2018, VOLUME NO. 32-Z 1259 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 the notice, the proposed text of the regulations and the initial state- ment of reasons.

The Board’s web site address is: www.chrb.ca.gov. TITLE 10. GOVERNOR’S OFFICE OF BUSINESS AND ECONOMIC DEVELOPMENT The Governor’s Office of Business and Economic Development (GO−Biz) proposes to adopt amend- ments to Title 10,

Chapter 13,

Article 1, Sections 8000, 8020, and 8030 after considering all comments, objec- tions, and recommendations regarding the Proposed Action. These proposed regulatory amendments are hereafter referred to as the “Proposed Action.” PUBLIC PROCEEDINGS, AUTHORITY , AND REFERENCE Any interested person, or his or her authorized repre- sentative, may submit written comments relevant to the Proposed Action to GO−Biz at the address below. Com- ments may also be submitted by email to calcompetes@gobiz.ca.gov. The written comment pe- riod closes at 5:00 p.m. on September 24, 2018.

GO− Biz will only consider comments received at the GO− Biz office by that time. Submit comments to: Van T. Nguyen, GO−Biz Counsel Governor’s Office of Business and Economic Development 1325 J Street, Suite 1800 Sacramento, CA 95814 Email: calcompetes@gobiz.ca.gov Revenue and Taxation Code sections 17059.2(

h) and 23689(

h) authorize GO−Biz to amend Title 10,

Chapter 13,

Article 1, Sections 8000, 8020, and 8030. The Pro- posed Action implements, interprets, and makes specif- ic sections 17059.2 and 23689 of the Revenue and Tax- ation Code. A public hearing on the Proposed Action will be scheduled upon request. To request a hearing, send a letter to the address listed above no later than fif- teen days prior to the close of the written comment period. 1 GO−Biz will send notice of the hearing to the requestor and to the interested parties on the California Competes Tax Credit (CCTC) interested parties list for regulatory public hearings.

The notice will also be post- ed on the GO−Biz website at least ten days before the public hearing date pursuant to Government Code sec- tion 11346.8(a). The notice will provide the date, time, and location of the hearing. If a hearing is scheduled and you have special accommodation or language needs, please contact Van T. Nguyen via email at calcompetes@gobiz.ca.gov at least one week in ad- vance of the hearing. INFORMATIVE DIGEST/POLICY STATEMENT OVERVIEW Governor Edmund G. Brown Jr. established the Gov- ernor’s Economic Development Initiative (GEDI) by signing Assembly Bill 93 (Cmte. on Budget,

Chapter 69, Statutes of 2013(AB 93)) and Senate Bill 90 (Gal- giani,

Chapter 70, Statutes of 2013) into law. GEDI is comprised of the Manufacturing Equipment Sales and Use Tax Exemption, New Employment Credit, and the CCTC. GO−Biz is responsible for implementation of the CCTC. The CCTC is an income tax credit available to businesses statewide.

Section 1 of AB 93 makes it clear that the intent of GEDI is to attract and retain high−value employers while at the same time ensuring accountability for the state’s job creation efforts and the effective use of taxpayer dollars. The Proposed Action modifies and clarifies changes to the application process to comply with recent changes to sections 17059.2 and 23689 of the Revenue and Taxation Code, and specifies and clarifies defini- tions for terms used in the administration of the CCTC.

The proposed action also includes a new process for a taxpayer to request permission to submit an application before the next designated application period under limited circumstances. Anticipated Benefits of the Proposed Action: The Proposed Action will assist businesses by pro- viding specification and clarification of

definitions used in the program, some of which had to be amended to bring them in compliance with the recent changes to sections 17059.2 and 23689 of the Revenue and Taxa- tion Code. Similarly, some regulations are being delet- ed because they have been rendered obsolete by the statutory changes. The amendments also include a new process for a taxpayer to request permission to submit 1If you have special accommodation or language needs, please in- clude this in your request for a public hearing. TTY/TDD speech− to−text users may dial 7−1−1 for the California Relay Service.

CALIFORNIA REGULATORY NOTICE REGISTER 2018, VOLUME NO. 32-Z 1260 an application before the next designated application period under limited circumstances. This new process will provide greater flexibility for potential applicants to apply for a credit before the next designated applica- tion period and potentially increase economic opportu- nities for California workers.

Determination of Inconsistency/Incompatibility with Existing State Regulations: No other state agency has issued any regulations re- lating to the CCTC program; therefore there are no in- consistencies or incompatibilities with existing state regulations relating to the CCTC program. DISCLOSURES REGARDING THE PROPOSED ACTION GO−Biz has made the following initial determinations: Mandate on local agencies and school districts: None. Cost or savings to any state agency: None. Cost to any local agency or school district which must be reimbursed in accordance with Government Code sections 17500 through 17630: None.

Other nondiscretionary cost or savings imposed on local agencies: None. Cost or savings in federal funding to the state: None. Cost impacts on a representative private person or business: GO−Biz is not aware of any cost impacts that a representative private person or business would nec- essarily incur in reasonable compliance with the pro- posed action. Significant effect on housing costs: None. Significant, statewide adverse economic impact di- rectly affecting business, including the ability of Cali- fornia businesses to compete with businesses in other states: None.

Small business determination: The minor amend- ments will not have any discernible economic impact on small businesses because they do not impact the cost to prepare the application or impose any additional pro- grammatic burdens or requirements on small business- es. The recent Legislative changes have eliminated the 25% set−aside for small businesses, but any business, including small businesses, may continue to apply for a CCTC. The proposed amendments simply conform the regulations to the revised statute.

Results of the Economic Impact Analysis/ Assessment: The amendments are designed to provide clarity to businesses on the

definitions and application process. The amendments do not substantively alter the application or program implementation processes. Fur- ther, they make clear the information business appli- cants will need to gather and submit as part of the appli- cation and evaluation processes. These amendments do not: 1) benefit or otherwise impact worker safety and the state’s environment, 2) impact the creation/elimina- tion of California jobs, 3) the creation/elimination of California businesses, or 4) impact the expansion of ex- isting California businesses. CONSIDERATION OF ALTERNATIVES In accordance with Government Code

section 11346.5(a)(13), GO−Biz must determine that no rea- sonable 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, would be as effective and less bur- densome to affected private persons than the proposed action, or would be more cost−effective to affected pri- vate persons and equally effective in implementing the statutory policy or other provision of law. CONTACT PERSONS Inquiries concerning the proposed administrative ac- tion may be directed to: Van T.

Nguyen, GO−Biz Counsel Governor’s Office of Business and Economic Development 1325 J Street, Suite 1800 Sacramento, CA 95814 Email: calcompetes@gobiz.ca.gov Phone: (916) 322−2984 Or: Scott Dosick, CCTC Assistant Deputy Director Governor’s Office of Business and Economic Development 1325 J Street, Suite 1800 Sacramento, CA 95814 Email: calcompetes@gobiz.ca.gov Phone: (916) 322−0676 Please direct requests for copies of the text of the pro- posed amended regulations, the Initial Statement of Reasons (ISOR), or other information upon which the rulemaking is based to Van T. Nguyen at the above address.

A V AILABILITY OF STATEMENT OF REASONS, TEXT OF PROPOSED REGULATIONS, AND RULEMAKING FILE GO−Biz will have the entire rulemaking file available for inspection and copying throughout the rulemaking process at its office at the above address. As of the date this notice is published in the Notice Register, the rule- making file consists of this notice, the proposed text of the regulations, and the Initial Statement of Reasons.

CALIFORNIA REGULATORY NOTICE REGISTER 2018, VOLUME NO. 32-Z 1261 Copies may be obtained by downloading them at www.business.ca.gov/calcompetes.aspx or contacting Van T. Nguyen at calcompetes@gobiz.ca.gov. A V AILABILITY OF CHANGED OR MODIFIED TEXT After considering all timely and relevant comments received, GO−Biz may adopt the proposed regulations substantially as described in this notice.

If GO−Biz makes modifications which are sufficiently different from the originally proposed text, it will make the modi- fied text (with the changes clearly indicated) available to the public for at least 15 days before GO−Biz adopts the regulations as revised. Please send requests for copies of any modified regulations to the attention of Van T. Nguyen at the email address indicated above. GO−Biz 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, copies of the Final Statement of Reasons may be obtained by contacting V an T. Nguyen at the email address above. A V AILABILITY OF DOCUMENTS ON THE INTERNET Copies of the Notice of Proposed Rulemaking, the ISOR, and the text of the proposed amendments can be accessed through the GO−Biz website at www.business.ca.gov/calcompetes.aspx. TITLE 11.

COMMISSION ON PEACE OFFICER STANDARDS AND TRAINING Notice is hereby given that the Commission on Peace Officer Standards and Training (POST) proposes to amend regulations in Division 2 of Title 11 of the Cali- fornia Code of Regulations as described below in the In- formative Digest. A public hearing is not scheduled. Pursuant to Government Code §11346.8, any interested person, or his/her duly authorized representative, may request a public hearing. POST must receive the written request no later than 15 days prior to the close of the public comment period. Public Comments Due by September 24, 2018, at 5:00 p.m.

Notice is also given that any interested person, or au- thorized representative, may submit written comments relevant to the proposed regulatory action by fax at (916) 227−6932 or by letter to: Commission on POST Attn: Cheryl Smith 860 Stillwater Road, Suite 100 West Sacramento, CA 95605−1630 AUTHORITY AND REFERENCE This proposal is made pursuant to the authority vest- ed by Penal Code § 13503 (authority of Commission on POST) and Penal Code §13506 (POST authority to adopt regulations). This proposal is intended to inter- pret, implement, and make specific Penal Code §13503(

e) which authorizes POST to develop and im- plement programs to increase the effectiveness of law enforcement, including programs involving training and education courses. INFORMATIVE DIGEST/POLICY STATEMENT OVERVIEW Penal Code §13510 requires that POST develop guidelines and a course of instruction and training for law enforcement officers who are employed as peace officers, or who are not yet employed as a peace officer but are enrolled in a training academy for law enforce- ment officers.

The California Emergency Medical Services Author- ity (EMSA), which established First Aid/CPR training standards for public safety personnel, has approved re- visions to the California Code of Regulations, Division 9, Title 22,

Chapter 1.5 First Aid Standards for Public Safety Personnel, that significantly increase the level of skills to be taught to peace officers. POST has updated Regulation 1070 to add AED to the specialized subject and refer to EMSA for required instructor training requirements. Regulation 1082 has been updated to add AED and refer to EMSA (Title 22,

Chapter 1.5,

Section 1028(

a) of the California Code of Regulations). The benefits anticipated by the proposed amend- ments to the regulations will be to update the POST− Certified Instructor course and content, which will in- crease the effectiveness of law enforcement standards for peace officers in preserving peace, protection of public health and safety, and welfare of California. During the process of developing these regulations and amendments, POST has conducted a search of any similar regulations on this topic and has concluded that these regulations are neither inconsistent nor incompat- ible with existing state regulations.

CALIFORNIA REGULATORY NOTICE REGISTER 2018, VOLUME NO. 32-Z 1262 ADOPTION OF PROPOSED REGULATIONS Following the public comment period, the Commis- sion may adopt the proposal substantially as set forth without further notice, or may modify the proposal if such modifications remain sufficiently related to the text as described in the Informative Digest.

If the Com- mission makes changes to the language before the date of adoption, the text of any modified language, clearly indicated, will be made available at least 15 days before adoption to all persons whose comments were received by POST during the public comment period and to all persons who request notification from POST of the availability of such changes. A request for the modified text should be addressed to the agency official designat- ed in this notice. The Commission will accept written comments on the modified text for 15 days after the date that the revised text is made available.

ESTIMATE OF ECONOMIC IMPACT Fiscal impact on Public Agencies including Costs or Savings to State Agencies or Costs/Savings in Federal Funding to the State: None. Non−Discretionary Costs/Savings to Local Agen- cies: None. Local Mandate: None. Costs to any Local Agency or School District for which Government Code §§ 17500−17630 requires re- imbursement: None.

Significant Statewide Adverse Economic Impact Di- rectly Affecting California Businesses, including Small Business: The Commission on Peace Officer Standards and Training has made an initial determination that the amended regulations will not have a significant statewide adverse economic impact directly affecting California business, including the ability of California businesses to compete with businesses in other states.

The Commission on Peace Officer Standards and Train- ing has found that the proposed amendments will not af- fect California businesses, including small businesses, because the Commission sets selection and training standards for law enforcement which does not impact California businesses, including small businesses. Effect on Housing Costs: The Commission on Peace Officer Standards and Training has made an initial de- termination that the proposed regulations would have no effect on housing costs. RESULTS OF ECONOMIC IMPACT ASSESSMENT PER GOVERNMENT CODE § 11346.3(

b) The adoption of the proposed amendments of regula- tions will neither create, nor eliminate, jobs in the State of California, nor result in the elimination of existing businesses or create, or expand, businesses in the State of California. The proposed amendments of regulations will in- crease the effectiveness of law enforcement standards for peace officers in preserving peace, protection of public health and safety, and welfare of California. There would be no impact that would affect worker safety or the state’s environment.

COST IMPACT ON REPRESENTATIVE PRIV ATE PERSONS OR BUSINESSES The Commission is not aware of any cost impacts that a representative private person or business would nec- essarily incur in reasonable compliance with the pro- posed action.

CONSIDERATION OF ALTERNATIVES To take this action, the Commission must determine that no reasonable alternative considered by the Com- mission, or otherwise identified and brought to the Commission, 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 implementing the statutory policy or other provision of law than the proposed action.

CONTACT PERSON Questions regarding this proposed regulatory action may be directed to Cheryl Smith, Commission on POST, 860 Stillwater Road, Suite 100, West Sacramen- to, CA 95605−1630, at cheryl.smith@post.ca.gov, or (916) 227−0544. The alternate contact is Robert “RC” Smith at rc.smith@post.ca.gov or (916) 227−4864. TEXT OF PROPOSAL Individuals may request copies of the exact language of the proposed regulations and of the initial statement of reasons, and the information the proposal is based

CALIFORNIA REGULATORY NOTICE REGISTER 2018, VOLUME NO. 32-Z 1263 upon, from the Commission on POST at 860 Stillwater Road, Suite 100, West Sacramento, CA 95605−1630. These documents are also located on the POST Website at: http://www.post.ca.gov/regulatory−actions.aspx. A V AILABILITY AND LOCATION OF THE RULEMAKING FILE AND THE FINAL STATEMENT OF REASONS The rulemaking file contains all information upon which POST is basing this proposal and is available for public inspection by contacting the person(

s) named above. To request a copy of the Final Statement of Reasons once it has been prepared, submit a written request to the contact person(

s) named above. TITLE 13. AIR RESOURCES BOARD NOTICE OF PUBLIC HEARING TO CONSIDER PROPOSED AMENDMENTS TO THE LOW−EMISSION VEHICLE III GREENHOUSE GAS EMISSION REGULATION The California Air Resources Board (CARB or Board) will conduct a public hearing at the time and place noted below to consider approving for adoption the Proposed Amendments to the Low−Emission V ehi- cle III Greenhouse Gas Emission Regulation. DATE: September 27, 2018 TIME: 9:00 a.m.

LOCATION: California Environmental Protection Agency California Air Resources Board Byron Sher Auditorium 1001 I Street Sacramento, California 95814 This item will be considered at a meeting of the Board, which will commence at 9:00 a.m., September 27, 2018, and may continue at 8:30 a.m., on September 28, 2018. Please consult the agenda for the hearing, which will be available at least ten days before Septem- ber 27, 2018, to determine the day on which this item will be considered.

WRITTEN COMMENT PERIOD AND SUBMITTAL OF COMMENTS Interested members of the public may present com- ments orally or in writing at the hearing and may pro- vide comments by postal mail or by electronic submittal before the hearing. The public comment period for this regulatory action will begin on August 10, 2018. Writ- ten comments not physically submitted at the hearing must be submitted on or after August 10, 2018, and re- ceived no later than 5:00 p.m. on September 24, 2018.

CARB requests that when possible written and email statements be filed at least ten days before the hearing to give CARB staff and Board members additional time to consider each comment. The Board also encourages members of the public to bring to the attention of staff in advance of the hearing any suggestions for modifica- tion of the proposed regulatory action.

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

Additionally, the Board requests but does not require that persons who submit written comments to the Board reference the title of the proposal in their comments to facilitate review. AUTHORITY AND REFERENCE This regulatory action is proposed under the authority granted in California Health and Safety Code, sections 38550, 38566, 39500, 39600, 39601, 43013, 43018, 43018.5, 43101, 43104, and 43105.

This action is pro- posed to implement, interpret, and make specific Cali- fornia Health and Safety Code, sections 39002, 39003, 39667, 43000, 43009.5, 43013, 43018, 43018.5, 43100, 43101, 43101.5, 43102, 43104, 43105, 43106, and 43211.

CALIFORNIA REGULATORY NOTICE REGISTER 2018, VOLUME NO. 32-Z 1264 INFORMATIVE DIGEST OF PROPOSED ACTION AND POLICY STATEMENT OVERVIEW (GOV . CODE, § 11346.5, subd. (a)(3)) Sections Affected: Proposed amendment to California Code of Regula- tions, title 13, sections 1961.2 and1961.3 and to the “California 2015 and Subsequent Model Criteria Pollu- tant Exhaust Emission Standards and Test Procedures and 2017 and Subsequent Model Greenhouse Gas Ex- haust Emission Standards and Test Procedures for Pas- senger Cars, Light−Duty Trucks, and Medium−Duty Vehicles,” as last amended September 2, 2015, incorpo- rated by reference in Title 13, CCR,

section 1961.2. Background and Effect of the Proposed Regulatory Action: Overview In order to address the need to further reduce vehicle emissions and achieve California’s goal of reducing cli- mate changing greenhouse gas emissions, in January 2012, CARB adopted its second generation of green- house gas emission standards for light−duty vehicles as part of the Low−Emission Vehicle III (or LEV III) pro- gram. The LEV III regulations established increasingly stringent greenhouse gas standards for 2017 through 2025 model year light−duty vehicles, and maintained the stringency for subsequent model years.

These regu- lations were adopted by the Board as part of the Ad- vanced Clean Cars rulemaking package that also in- cludes the state’s zero−emission vehicle (ZEV) regulation. California’s greenhouse gas emission programs for light−duty vehicles (passenger vehicles) are a funda- mental component of the State’s strategy to protect the health of its citizens and its natural resources, including from the threats of climate change. 1 California’s pro- grams have operated successfully in tandem with com- plementary standards set by other agencies for many years.

Recognizing the value of a national program, California has accepted compliance with greenhouse gas emission standards adopted by the United States Environmental Protection Agency (U.S. EPA) for the 2012 through 2025 model years. To do so, CARB adopted the so−called “deemed to comply” option, which allows compliance with U.S. EPA’s regulations as an alternative to complying with California’s regula- tions for these model years, because the U.S.

EPA stan- dards, at the time, would deliver equivalent greenhouse gas emission reductions as California’s standards. 2,3 One important element of the originally adopted fed- eral greenhouse gas emission standards was a require- ment that U.S. EPA later conduct a midterm evaluation (MTE) to re−assess the appropriateness of the green- house gas emission standards for the 2022 through 2025 model years. This report was required by law to be based upon a comprehensive joint Technical Assess- ment Report, 4,5 consisting of hundreds of pages of anal- ysis and documentation, which was prepared jointly by U.S.

EP A, CARB, and National Highway Traffic Safety Administration (NHTSA) staff. The purpose of the MTE was to evaluate updated information to determine if the standards should be strengthened, maintained at their current level of stringency, or weakened. On Janu- ary 13, 2017, U.S. EPA released its Final Determina- tion 6 to maintain the current National Program of greenhouse gas emission standards for 2022 through 2025 model year vehicles, finding that automakers are well positioned to meet the standards at lower costs than previously estimated.

CARB also conducted a California−specific Midterm Review7 of the appropriateness of these standards, which also examined a number of other issues relating to the LEV III regulations and ZEV regulation, and is- sued a report on the findings. Based on the CARB 1California Air Resources Board.

California’s 2017 Climate Change Scoping Plan. (November 2017) available at: https://www.arb.ca.gov/cc/scopingplan/scoping_plan_2017.pdf. 2All manufacturers are currently exercising the option of comply- ing with the federal greenhouse gas emission standards. 3Although California’s light−duty greenhouse gas regulations al- so apply to model years beyond 2025, the “deemed to comply” option is not available for the 2026 and subsequent model years. Consequently, the 2026 and subsequent model years are not ad- dressed in this rulemaking. 4See 40 C.F.R. § 86.1818−12(h)(2). 5 U.S.

EP A, NHTSA, CARB, Draft Technical Assessment Report: Midterm Evaluation of Light−Duty Vehicle Greenhouse Gas Emission Standards and Corporate Average Fuel Economy Stan- dards for Model Years 2022−2025 (July 2016), available at: https://nepis.epa.gov/Exe/ZyPDF.cgi/P100OXEO.PDF?Dockey =P100OXEO.PDF . 6 U.S.

EPA, Final Determination on the Appropriateness of the Model Year 2022−2025 Light−duty Vehicle Greenhouse Gas Emissions Standards under the Midterm Evaluation (January 2017, EPA−420−R−17−001), available at: https://www. regulations.gov/contentStreamer?documentid=EPA−HQ− OAR−2015−0827−6270&attachmentNumber=1&content- Type=pdf . 7 California Air Resources Board, California’s Advanced Clean Cars Midtenn Review (January 18, 2017), available at: https://www.arb.ca.gov/msprog/acc/mtr/acc_mtr_finalreport_ full.pdf .

CALIFORNIA REGULATORY NOTICE REGISTER 2018, VOLUME NO. 32-Z 1265 Midterm Review, the Board concluded (in Resolution 17−38) that: Given U.S. EPA has issued a Final Determination affirming the 2022 through 2025 model year federal greenhouse gas standards will remain as adopted, it is appropriate to continue California’s participation in the 2017 through 2025 model year National Program by maintaining the “deemed to comply” provision allowing for compliance with the adopted U.S. EPA greenhouse gas standards for the 2022 through 2025 model years. On April 13, 2018, the U.S.

EPA issued a notice with- drawing its previous Final Determination for the MTE of the federal passenger vehicle greenhouse gas regula- tions and issuing a revised 11−page Final Determina- tion that the federal greenhouse gas standards are not appropriate, “may be too stringent,” and should be changed. 9 The U.S.

EPA did this without properly ex- plaining why it was departing from the extensive evi- dence within the Technical Assessment Report, and without sharing any data or analysis with CARB or ade- quately explaining the reasons for reaching a different conclusion than had been reached by the previous well− reasoned Final Determination. On August 1, 2018, as a consequence of the U.S. EPA’s new Final Determination, the Acting Adminis- trator for the U.S. EPA and the Deputy Administrator for NHTSA signed a joint Notice of Proposed Rule- making (NPRM) that would, if finalized, significantly weaken the U.S.

EPA’s standards and which purports to attack California’s long−standing authority in this area. The NPRM stated it would provide a 60−day comment period, commencing from the time of publication in the Federal Register. The NPRM proposes to arrest U.S. EPA’s carbon dioxide (CO 2) emissions targets at the levels set for model year 2020. The proposal would also limit the standards to CO2 tailpipe emissions and would fail to address other, more potent greenhouse gas emissions from vehicles.

The agencies also proposed to find CARB’s greenhouse gas and ZEV standards preempted by federal law, and to withdraw the waiver of federal preemption that the U.S. EPA granted to California in 2013 for the greenhouse gas and ZEV requirements of its Advanced Clean Cars program, at 78 Federal Regis- ter 2,112 (Jan. 9, 2013). This proposal is contrary to the facts and the law. It is belied by the comprehensive, multi−year analysis of the initial Final Determination that found the standards cost−effective and achievable.

It frustrates Congres- sional intent, upheld by the Supreme Court and lower federal courts, in the Clean Air Act and the Energy Poli- cy and Conservation Act to conserve energy and protect the environment by setting maximum feasible stan- dards. It jeopardizes the successful coordinated Nation- al Program for reducing these emissions that has helped position the auto industry for continued innovation and competitiveness in an international market.

This threat of weakening the standards of the unified National Program, left unaddressed, could substantially slow progress towards the emission reductions needed to address the serious threat climate change poses to California, the country, and the world. Thus, U.S. EPA has now stated both that the current rigorous standards are inappropriate — necessitating this rulemaking — and doubled down by stating that it intends to abandon the rigorous federal standards that the record supports.

This will force upon regulated entities and the public considerable uncertainty as to the fate of the unified Na- tional Program. And it will obscure the clear path that it laid through the coming years to save money and re- sources and achieve the pollution reductions necessary to protect our health and environment. Issuance of this federal NPRM affirms the importance of CARB taking this proposed action to be clear California is maintain- ing the current standards.

Current Proposal CARB is proposing amendments to the LEV III greenhouse gas emission regulation to clarify that the “deemed to comply” option is available only for the cur- rently adopted federal greenhouse gas regulations (in- corporated in the Code of Federal Regulations and last amended on October 25, 2016). These clarifying amendments will ensure that the effects of any federal weakening for model years 2021 through 2025 are not felt in California during those model years. Weakening the standards, as U.S. EPA has proposed, would be un- founded and contrary to the intent of the Clean Air Act.

Such an unfounded weakening removes a material predicate of California’s decision to accept compliance with U.S. EPA standards. This clarification is thus con- sistent with the fundamental understandings underlying the current unified National Program for light−duty emission control. CARB may also consider other changes to the sec- tions affected during the course of this rulemaking process.

Specifically, CARB requests comments on po- tential flexibilities that might allow for continued com- pliance with the federal standards, or reward national actions to promote cleaner vehicles. 8 State of California, Air Resources Board, Resolution 17−3. March 24, 2017. Agenda Item No.: 17−3−8. Advanced Clean Cars Midterm Review. Available at: https://www.arb.ca.gov/msprog/ acc/mtr/res17−3.pdf. 9 83 Fed.Reg. 16,077 (April 13, 2018).

CALIFORNIA REGULATORY NOTICE REGISTER 2018, VOLUME NO. 32-Z 1266 Objectives and Benefits of the Proposed Regulatory Action: The proposed amendments will ensure that appropri- ate and necessary greenhouse gas emission reductions and public health protections 10 are achieved by Califor- nia’s standards.

They are also important for maintaining the pace of greenhouse gas emission reductions that are necessary to achieve our statutory targets, and to ad- dress extraordinary and compelling conditions in Cali- fornia. 11 Achieving these targets is critical for helping to combat the effects of climate change, including rag- ing wildfires, coastal erosion, disruption of water sup- ply, threats to agriculture, spread of insect−borne dis- eases, and continuing health threats from air pollution.

The proposed amendments are also consistent with the extensive technical determinations from the 2017 Final Determination and CARB’s MTR, showing that the standards are appropriate. These proposed amendments will provide predictability for manufacturers to make the necessary investments in cleaner vehicles for Cali- fornians that have reduced climate, public health and welfare impacts, promote innovation, and are less cost- ly to operate.

CARB remains committed to a national program that is based on a robust technical foundation and sound eco- nomic analysis, such that it fulfills CARB’s statutory mandates to protect public health and welfare and the environment. CARB has been, and remains, willing to consider well−founded and necessary changes to the program, including flexibilities that reduce compliance costs, so long as they continue to provide the necessary greenhouse gas emission reductions. Federal action that is consistent with these principles could render this CARB rulemaking unnecessary.

There are no expected benefits to public safety or worker safety as a result of this rulemaking. Comparable Federal Regulations: As mentioned, although the current California and federal greenhouse gas regulations for 2021 through 2025 model year light−duty vehicles are equivalent in stringency, U.S.

EPA has stated that the federal stan- dards “are inappropriate and may need to be weak- ened.” 12 The proposed amendments are necessary to preserve the emission benefits of the current California LEV III greenhouse gas regulation by safeguarding against the unwarranted relaxation of the standards and resulting loss of California emission reductions for model years 2021 through 2025 due to the linkage of the California regulation and federal passenger vehicle greenhouse gas regulation. An Evaluation of Inconsistency or Incompatibili- ty with Existing State Regulations (Gov.

Code § 11346.5, subd. (a)(3)(D)): During the process of developing the proposed regu- latory action, CARB conducted a search of any similar regulations on this topic and concluded these regula- tions are neither inconsistent nor incompatible with ex- isting state regulations. MANDATED BY FEDERAL LAW OR REGULATIONS (Gov. Code, §§ 11346.2, subd. (c), 11346.9) The proposed regulatory action is not mandated by federal law or regulations. DISCLOSURE REGARDING THE PROPOSED REGULATION Fiscal Impact/Local Mandate Determination Regarding the Proposed Action (Gov.

Code, § 11346.5, subds. (a)(5)&(6)): The determinations of the Board’s Executive Officer concerning the costs or savings incurred by public agencies and private persons and businesses in reason- able compliance with the proposed regulatory action are presented below.

Under Government Code sections 11346.5, subdivi- sion (a)(5) and 11346.5, subdivision (a)(6), the Execu- tive Officer has determined that the proposed regulato- ry action would not create costs or savings to any State agency or in federal funding to the State, costs or man- date to any local agency or school district, whether or not reimbursable by the State under Government Code, title 2, division 4,

part 7 (commencing with

section 17500), or other nondiscretionary cost or savings to State or local agencies. Housing Costs (Gov. Code, § 11346.5, subd. (a)(12)): The Executive Officer has also made the initial deter- mination that the proposed regulatory action will not have a significant effect on housing costs. 12 83 Fed.Reg. 16,077 (April 13, 2018). 10 Although the vehicle standards in question directly regulate greenhouse gas emissions, and the LEV III criteria pollutant emis- sion fleet average standards are not being changed, reducing greenhouse gases is critically important to protect public health in California.

Greenhouse gases worsen climate change; in turn, climate change results in hotter weather conditions that are al- ready eroding California’s ability to attain and maintain compli- ance with ambient air quality standards. Moreover, criteria pollu- tant emissions in California from the production and delivery of petroleum and gasoline could change as a result of the federal ac- tion, thus increasing public health risks. 11 Senate Bill 32 (Chapter 249, Statutes 2016, Pavley) requires that the state reach 40 percent emission reductions below 1990 levels by 2030.

Executive Order S−3−05 sets a goal of 80 percent emission reductions below 1990 levels by 2050.

CALIFORNIA REGULATORY NOTICE REGISTER 2018, VOLUME NO. 32-Z 1267 Significant Statewide Adverse Economic Impact Directly Affecting Business, Including Ability to Compete (Gov. Code, §§ 11346.3, subd. (a), 11346.5, subd. (a)(7), 11346.5, subd. (a)(8)): The Executive Officer has made an initial determina- tion that the proposed regulatory action would not have a significant statewide adverse economic impact direct- ly affecting businesses, including the ability of Califor- nia businesses to compete with businesses in other states, or on representative private persons.

Results of The Economic Impact Analysis/ Assessment (Gov. Code, § 11346.5, subd. (a)(10)): The proposed amendments do not qualify as major regulations, because they would leave current regulato- ry conditions intact. Accordingly, the proposed amend- ments will not have an economic impact on California businesses and individuals compared to a baseline of current conditions, and formal requirements for major regulations do not apply.

However, in the interest of transparency, staff have prepared a thorough economic analysis of these proposed amendments, commensurate with analyses done for major regulations, and it is avail- able as Appendix D to the Initial Statement of Reasons (ISOR). This Standard Regulatory Impact Assessment (SRIA) Equivalent Document was submitted to the Cal- ifornia Department of Finance on June 7, 2018. Com- ments received from the California Department of Fi- nance are in Appendix E to the ISOR and are summa- rized below.

Effect on Jobs/Businesses: The Executive Officer has determined that the pro- posed regulatory action would not affect the creation or elimination of jobs within the State of California, the creation of new businesses or elimination of existing businesses within the State of California, or the expan- sion of businesses currently doing business within the State of California. A detailed assessment of the eco- nomic impacts of the proposed regulatory action can be found in the Economic Impact Analysis in the ISOR.

Benefits of the Proposed Regulation: The objective of the proposed regulatory action is to preserve the California greenhouse gas emission reduc- tions anticipated from the LEV III light−duty vehicle greenhouse gas emission regulation. A

summary of these benefits is provided, please refer to “Objectives and Benefits,” under the Informative Di- gest of Proposed Action and Policy Statement Over- view Pursuant to Government Code 11346.5(a)(3) discussion. California Department of Finance Comments on the SRIA Equivalent Document and CARB Responses: Comment from the California Department of Finance: Finance generally concurs with the methodology used to estimate impacts of proposed regulations. If the federal standards were to change, the timing and details would be important to model in order to assess any im- pacts to California.

However, if the sensitivity analysis captures most of the components, only the magnitudes of estimates may change. CARB Response: Thank you for your review. We will update the analy- sis in the Standard Form 399 and other documents, as appropriate, if there are any developments at the federal level. Business Report (Gov.

Code, §§ 11346.5, subd. (a)(11); 11346.3, subd. (d)): In accordance with Government Code sections 11346.5, subdivision (a)(11) and 11346.3, subdivision (d), the Executive Officer finds the reporting require- ments of the proposed regulatory action which apply to businesses are necessary for the health, safety, and wel- fare of the people of the State of California. The pro- posed amendments do not include new reporting re- quirements or modify existing reporting requirements. Cost Impacts on Representative Private Persons or Businesses (Gov.

Code, § 11346.5, subd. (a)(9)): In developing this regulatory proposal, CARB staff evaluated the potential economic impacts on represen- tative private persons or businesses. CARB is not aware of any cost impacts that a representative private person or business would necessarily incur in reasonable com- pliance with the proposed action. Effect on Small Business (Cal. Code Regs., tit. 1, § 4, subds. (

a) and (b)): The Executive Officer has also determined under California Code of Regulations, title 1,

section 4, that the proposed regulatory action would not affect small businesses, because they would not change the strin- gency of the current regulations. Because the stringen- cy would not change in California, the regulations will continue to result in net cost savings for small business through more efficient motor vehicles, which will be more cost−effective to own and operate than in the ab- sence of the standards, as previously estimated when the regulations were initially adopted. Consideration of Alternatives (Gov.

Code, § 11346.5, subd. (a)(13)): Before taking final action on the proposed regulatory action, the Board must determine that no reasonable al- ternative 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 pur-

CALIFORNIA REGULATORY NOTICE REGISTER 2018, VOLUME NO. 32-Z 1268 pose for which the action is proposed, would be as ef- fective and less burdensome to affected private persons than the proposed action, or would be more cost− effective to affected private persons and equally effec- tive in implementing the statutory policy or other provi- sions of law.

ENVIRONMENTAL ANALYSIS When the Advanced Clean Cars Program was pro- posed in 2012, CARB prepared an environmental anal- ysis (EA) under its certified regulatory program (Cali- fornia Code of Regulations, title 17, sections 60000 through 60008) to comply with the requirements of the California Environmental Quality Act (CEQA; Public Resources Code

section 21080.5). The EA, included in Appendix B of the ISOR entitled Appendix B: Draft Environmental Analysis for the Advanced Clean Cars Program, dated December 7, 2011, determined the Ad- vanced Clean Cars Program could result in adverse im- pacts to aesthetics, air quality, and noise, biological re- sources, cultural resources, geology/soils, hazards/ hazardous materials, hydrology/water quality, traffic and utilities, however the portion of the program specif- ic to the LEV III regulation did not find any adverse en- vironmental impacts.

Staff has determined that no addi- tional environmental review is required for the current proposed amendments because there are no changes that involve new significant environmental effects or a substantial increase in severity of previously identified significant effects in the prior 2011 EA. The basis for reaching this conclusion is provided in

Chapter VI of the ISOR. SPECIAL ACCOMMODATION REQUEST Consistent with California Government Code Sec- tion 7296.2, special accommodation or language needs may be provided for any of the following: • An interpreter to be available at the hearing; • Documents made available in an alternate format or another language; and • A disability−related reasonable accommodation. To request these special accommodations or lan- guage needs, please contact the Clerk of the Board at (916) 322−5594 or by facsimile at (916) 322−3928 as soon as possible, but no later than 10 business days be- fore the scheduled Board hearing.

TTY/TDD/Speech to Speech users may dial 711 for the California Relay Service. Consecuente con la sección 7296.2 del Código de Gobierno de California, una acomodación especial o necesidades lingüísticas pueden ser suministradas para cualquiera de los siguientes: • Un intérprete que esté disponible en la audiencia; • Documentos disponibles en un formato alterno u otro idioma; y • Una acomodación razonable relacionados con una incapacidad.

Para solicitar estas comodidades especiales o necesi- dades de otro idioma, por favor llame a la oficina del Consejo al (916) 322−5594 o envíe un fax a (916) 322−3928 lo más pronto posible, pero no menos de 10 días de trabajo antes del día programado para la audien- cia del Consejo. TTY/TDD/Personas que necesiten este servicio pueden marcar el 711 para el Servicio de Re- transmisión de Mensajes de California.

AGENCY CONTACT PERSONS Inquiries concerning the substance of the proposed regulatory action may be directed to the agency repre- sentative Mike McCarthy, Chief Technology Officer, Emissions Compliance, Automotive Regulations and Science Division at (626) 771−3614 or (designated back−up contact) Sarah Carter, Staff Air Pollution Spe- cialist, Emissions Compliance, Automotive Regula- tions and Science Division at (626) 575−6845. A V AILABILITY OF DOCUMENTS CARB staff has prepared a Staff Report: Initial State- ment of Reasons (ISOR) for the proposed regulatory ac- tion, which includes a

summary of the economic and environmental impacts of the proposal.

The report is en- titled: “Public Hearing to Consider Proposed Amend- ments to the Low−Emission Vehicle III Greenhouse Gas Emission Regulation.” Copies of the ISOR and the full text of the proposed regulatory language, in underline and strikeout format to allow for comparison with the existing regulations, may be accessed on CARB’s website listed below, or may be obtained from the Public Information Office, California Air Resources Board, 1001 I Street, Visitors and Environmental Services Center, First Floor, Sacra- mento, California, 95814, beginning on August 7, 2018.

Further, the agency representative to whom nonsub- stantive inquiries concerning the proposed administra- tive action may be directed is Bradley Bechtold, Regu- lations Coordinator, at (916) 322−6533. The Board staff has compiled a record for this rulemaking action, which includes all the information upon which the proposal is based. This material is available for inspection upon re- quest to the contact persons.

CALIFORNIA REGULATORY NOTICE REGISTER 2018, VOLUME NO. 32-Z 1269 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

section 11340). Following the public hearing, the Board may take ac- tion to approve for adoption the regulatory language as originally proposed, or with non−substantial or gram- matical modifications. The Board may also approve for adoption the proposed regulatory language with other modifications if the text as modified is sufficiently re- lated to the originally proposed text that the public was adequately placed on notice and that the regulatory lan- guage as modified could result from the proposed regu- latory action.

If this occurs, the full regulatory text, with the modifications clearly indicated, will be made avail- able to the public, for written comment, at least 15 days before final adoption. The public may request a copy of the modified regu- latory text from CARB’s Public Information Office, California Air Resources Board, 1001 I Street, Visitors and Environmental Services Center, First Floor, Sacra- mento, California, 95814.

FINAL STATEMENT OF REASONS A V AILABILITY Upon its completion, the Final Statement of Reasons (FSOR) will be available and copies may be requested from the agency contact persons in this notice, or may be accessed on CARB’s website listed below. INTERNET ACCESS This notice, the ISOR and all subsequent regulatory documents, including the FSOR, when completed, are available on CARB’s website for this rulemaking at http://www.arb.ca.gov/regact/2018/leviii2018/ leviii2018.htm. TITLE 13.

AIR RESOURCES BOARD NOTICE OF PUBLIC HEARING TO CONSIDER PROPOSED INNOV ATIVE CLEAN TRANSIT REGULATION, A REPLACEMENT OF THE FLEET RULE FOR TRANSIT AGENCIES, AND DRAFT ENVIRONMENTAL ANALYSIS PREPARED FOR THE REGULATION This notice announces the availability of the pro- posed Innovative Clean Transit (ICT) Regulation and a Draft Environmental Analysis (Draft EA) for public comment. The California Air Resources Board (CARB or Board) will conduct a public hearing at the time and place noted below to consider the proposed ICT Regu- lation. DATE: September 27, 2018 TIME: 9:00 a.m.

LOCATION: California Environmental Protection Agency California Air Resources Board Byron Sher Auditorium 1001 I Street Sacramento, California 95814 This item will be considered at a meeting of the Board, which will commence at 9:00 a.m., September 27, 2018, and may continue at 8:30 a.m., on September 28, 2018. Please consult the agenda for the hearing, which will be available at least ten days before Septem- ber 27, 2018, to determine the day on which this item will be considered.

WRITTEN COMMENT PERIOD AND SUBMITTAL OF COMMENTS Interested members of the public may present com- ments orally or in writing at the hearing and may pro- vide comments by postal mail or by electronic submittal before the hearing. The public comment period for this regulatory action and Draft EA will begin on August 10, 2018. Written comments not physically submitted at the hearing must be submitted on or after August 10, 2018 and received no later than 5:00 p.m. on September 24, 2018.

CARB requests that when possible, written and email statements be filed at least ten days before the hearing to give CARB staff and Board members addi- tional time to consider each comment. The Board also encourages members of the public to bring to the atten- tion of staff in advance of the hearing any suggestions for modification of the proposed regulatory action.

Comments submitted in advance of the hearing must be addressed to one of the following: Postal mail: Clerk of the Board California Air Resources Board 1001 I Street, Sacramento, California 95814 Electronic submittal: http://www.arb.ca.gov/lispub/ comm/bclist.php Please note that under the California Public Records Act (Gov. Code, § 6250 et seq.), your written and oral

CALIFORNIA REGULATORY NOTICE REGISTER 2018, VOLUME NO. 32-Z 1270 comments, attachments, and associated contact infor- mation (e.g., your address, phone, email, etc.) become part of the public record and can be released to the pub- lic upon request. Additionally, the Board requests but does not require that persons who submit written comments to the Board reference the title of the proposal in their comments to facilitate review.

AUTHORITY AND REFERENCE This regulatory action is proposed under the authority granted in California Health and Safety Code, sections 38501, 38510, 38560, 39002, 39003, 39012, 39017, 39018, 39027, 39500, 39600, 39601, 39606, 39650, 39655, 39658, 39659, 39667, 40000, 43000.5, 43013, 43018, 43100, 43101, 43102, 43104, 43105, 43106, 43701(b), 43801 and 43806.

This action is proposed to implement, interpret, and make specific California Health and Safety Code, sections 38501, 38510, 38560, 38596, 39002, 39003, 39017, 39027, 39500, 39600, 39601, 39650, 39655, 39658, 39659, 39667, 40000, 43000.5, 43013, 43018, 43101, 43104, 43105, 43701(b), 43801 and 43806; California Vehicle Code, sections 233, 350, 545, and 28114; Title 49, United States Code, Sections 5303 and 5324; and Title 49, Code of Federal Regulations,

section 665.13. INFORMATIVE DIGEST OF PROPOSED ACTION AND POLICY STATEMENT OVERVIEW (GOV . CODE, § 11346.5, subd. (a)(3)) Sections Affected: Proposed amendments to California Code of Regula- tions, title 13, sections 2023, 2023.1, 2023.2, 2023.3, 2023.4, and adoption of sections 2023.5, 2023.6, 2023.7, 2023.8, 2023.9, 2023.10 and 2023.11, and to re- codify all of these into a new

Article 4.3. Documents Incorporated by Reference (Cal. Code Regs., tit.1, § 20, subd. (c)(3)): The following procedure would be incorporated in the regulation by reference as specified by sections 2023(b)(39) and 2023.4(c)(3)(C): • Society of Automotive Engineering (SAE) International, Recommended Practice for Measuring Fuel Economy and Emissions of Hybrid−Electric and Conventional Heavy−Duty Vehicles, J2711_200209 (September 20, 2002), available at: https://www.sae.org/standards/ content/j2711_200209/.

Background and Effect of the Proposed Regulatory Action: Transit fleets operate in local communities and have a key role, not only in helping transit−dependent riders, but also in helping to shape transportation systems.

Public transit agencies are our clean air partners and have played, and will continue to play, an important role in helping California meet air quality standards and greenhouse gas (GHG) emissions reduction goals; namely, by employing the cleanest technologies, pro- viding safe and reliable public transit services in low in- come and disadvantage communities (DAC) to reduce light−duty passenger vehicle miles traveled and single occupancy trips, and reducing congestion on roadways.

Under the current Fleet Rule for Transit Agencies (Transit Fleet Rule), sections 2023, 2023.1, 2023.2, 2023.3, and 2023.4, title 13, California Code of Regula- tions (CCR), public transit agencies operating urban bus fleets were required to select either the diesel bus path or the alternative−fuel bus path and comply with retrofit, fuel purchase, fleet average, and reporting re- quirements.

The diesel bus path required retrofitting ex- isting buses with diesel particulate filters, while agen- cies utilizing alternative−fuel path had to ensure that eighty−five percent of urban bus purchases were alter- native fueled buses. To date, about 55 percent of all bus- es in California operate on alternative fuels. In the 2006 amendment to the Transit Fleet Rule, there was a 15 percent zero−emission bus (ZEB) pur- chase requirement for larger transit agencies defined as with more than 200 urban buses to purchase ZEBs start- ing in 2011.

Ten transit agencies subject to the ZEB pur- chase requirements accounted for about 60 percent of the statewide urban bus fleet. To date, except for the ZEB purchase requirement, all other regulatory provi- sions have been met and are being implemented. In 2009, CARB staff presented ZEB technology eval- uations to the Board and concluded that the ZEB tech- nologies were not commercially ready at that time.

The Board, through Resolution 09−49, found, among other things, that technologies had not sufficiently advanced to appropriately assess commercial readiness, that costs of ZEBs remained significantly higher than the target prices on which the existing fleet rule had been premised, and that a new focus on GHG emissions re- ductions from transit was appropriate.

The Board di- rected staff to prepare proposed amendments to the reg- ulation to delay the ZEB purchase requirement, conduct further research on commercial−readiness metrics, im- plement the purchase requirement once commercial readiness had been achieved, and report back to the Board in 2012 on progress towards ZEB commercialization.

CALIFORNIA REGULATORY NOTICE REGISTER 2018, VOLUME NO. 32-Z 1271 In 2010, CARB staff issued a regulatory advisory to temporarily withhold the implementation of the pur- chase requirement for ZEBs. In the advisory, CARB stated it did not intend to enforce the ZEB purchase re- quirement until CARB had developed and the Board had approved new purchase requirements based on the technology evaluation. As part of the ZEB purchase requirement, the 2006 amendments included an advanced demonstration of ZEBs for transit agencies on the diesel path and a CARB evaluation of the status of technology.

Five tran- sit agencies in the Bay Area formed the Zero−Emission Bay Area (ZEBA) program. The original ZEBA pro- gram included twelve fuel cell electric buses (FCEBs) deployed in 2010 with an additional FCEB added to the fleet and put into service in late in 2015. At the time, FCEBs were the only available zero−emission technol- ogy to meet the demands of transit service. To date, the ZEBA program has demonstrated impressive milestone accomplishment and the feasibility of incorporating ZEBs into transit fleet operation.

CARB staff conducted a comprehensive technology evaluation in 2015 and concluded the ZEB technologies were now in their early commercialization stage. To date, both battery electric and fuel cell electric buses in active fleets can have bus availability of nearly 90%, which demonstrates technology improvement and via- bility. CARB staff updated the Board in February 2016 at a public hearing about the status of ZEB technology, price, and deployment.

Significant technology ad- vancements have been made in ZEBs with increased re- liability and availability, declining costs for both vehi- cle and infrastructure, improved performance, and ex- tended mileage range. Essential ZEB deployment expe- rience has been gained from multiple fleets, including transit agencies and universities, through operating ZEBs in regular revenue service. A viable ZEB market has now developed with several transit agencies com- mitting to fully electrify their fleets, all major bus man- ufacturers announcing ZEB production, and ZEB pro- duction facilities moving to California.

In the update to the Board, staff discussed plans to reinstate ZEB pur- chase requirements, including the public process on amending the rule with a broader goal of making a tran- sition to an all ZEB fleet. Staff has continued to analyze and update technical and cost information, as well as evaluate various regulatory strategies. This proposed ICT regulation is a result of that process. Staff is proposing the following elements to ensure a successful and smooth transition to a complete ZEB fleet:

(1) ZEB Rollout Plan • Each transit agency would be required to submit a ZEB Rollout Plan approved by governing board. • The Rollout Plan will demonstrate how a transit agency plans for ZEB purchase and infrastructure buildout, and associated financial planning and workforce training. • The ZEB Rollout Plan would be submitted to the Board, with due dates of June 30, 2020, for a large transit agency (with 100 or more transit buses) and June 30, 2023, for a small transit agency (with fewer than 100 transit buses).

(2) ZEB purchase requirements • A large transit agency would purchase ZEBs according to the following schedule: • Starting January 1, 2023, 25 percent of annual new buses purchased; • Starting January 1, 2026, 50 percent of annual new buses purchased; and • Starting January 1, 2029, 100 percent of annual new buses purchased. • A small transit agency would purchase ZEBs according to the following schedule: • Starting January 1, 2026, 25 percent of annual new buses purchased; and • Starting January 1, 2029, 100 percent of annual new buses purchased.

(3) Waiver for early compliance • purchase requirements otherwise effective in calendar year 2023 would be waived if California transit agencies collectively purchase 1,000 or more ZEBs by December 31, 2020. • purchase requirements otherwise effective in calendar year 2024 would be waived if California transit agencies collectively purchase 1,150 or more ZEBs by December 31, 2021.

(4) Zero−Emission Mobility Option • A transit agency may use zero−emission cars or vans or bicycles to meet a portion of its ZEB requirements.

(5) ZEB Bonus credit • Bonus credits for early placement of ZEBs, including extra credits for early FCEBs; however, • Bonus credits do not apply to the waiver for early compliance.

(6) Optional Joint Zero−Emission Bus Group • Allows for transit agencies to form a Joint Zero−Emission Bus Group to pool resources and more efficient utilization of infrastructure.

(7) Use of low NOx engines • Starting January 1, 2020 transit agencies would be required to purchase low NOx engines if available for the bus and fuel type being purchased. The requirement does not apply to buses dispatched from NOx exempt areas.

CALIFORNIA REGULATORY NOTICE REGISTER 2018, VOLUME NO. 32-Z 1272

(8) Use of renewable fuels • Starting January 1, 2020, large transit agencies would be required to use renewable fuels for diesel and compressed natural gas (CNG) buses when fuel contracts are renewed to support existing renewable fuel policies.

(9) Deferral from ZEB purchase requirements • A transit agency may submit a request for extension or exemption from ZEB purchase requirements, under conditions outside the transit agency’s control.

(10) Reporting • Starting 2021 all transit agencies would be required to report their fleet information annually for the prior compliance year. Staff recognizes the challenges transit agencies are facing to transition to ZEB fleets, and the commitments that transit agencies, local government agencies, and the State need to make. Even though ZEB technologies have advanced rapidly in recent years, continued im- provements in ZEB costs and performance are still needed to facilitate the transition to full zero−emission technologies.

Staff plans to provide the Board with an update on costs and performance of ZEBs by the end of 2021, which is two years before the first ZEB purchase requirement starts in 2023. The performance review would identify the status of ZEB technology and would help the State design poli- cies to further advance zero−emission technologies, and inform funding strategies related to zero−emission vehicles and infrastructure.

Objectives and Benefits of the Proposed Regulatory Action: The proposed ICT regulation is identified in the State Strategy for the State Implementation Plan (State SIP Strategy) and 2017 Scoping Plan as a necessary compo- nent for California to achieve established near− and long−term air quality and climate mitigation targets. In California, the transportation sector is responsible for 41 percent of total GHG emissions, 80 percent of NOx emissions, and 90 percent of diesel particulate matter (PM).

Diesel PM is a fine particulate, a toxic air con- taminant, and a carcinogen that significantly threatens public health and the environment. 1 Broadly implementing zero−emission technologies is a necessary component to effectively address these multiple and complicated air quality and climate pro- tection issues. ZEBs have a higher equivalent fuel effi- ciency compared to the conventional internal combus- tion engine (ICE) technologies and provide immediate health benefits to local communities and significantly reduce petroleum and other fossil fuel use.

The pro- posed ICT regulation is one step needed to accelerate the transition to zero emissions in the heavy−duty vehi- cle sector. In general, the proposed ICT regulation would pro- vide benefits in the following areas:

(1) Health benefits to Californians and workers at transit agencies through improved air quality and reduced premature mortality, hospital visits, and lost school or work days;

(2) Environmental benefits in air quality improvement, climate protection, and energy consumption reductions. The anticipated benefits are summarized below: Air Quality and Climate Benefits The demanding air quality and climate protection goals that California faces require cleaner technologies deployed, especially in the transportation sector. The proposed ICT regulation helps reduce emissions through several ways:

(1) Eliminates tailpipe emissions and avoids excess emissions caused by deteriorated vehicles;

(2) Increases fuel efficiency and thereby reduces the use of energy, which is the major source of carbon dioxide (CO 2) emissions through a combustion process;

(3) Better utilizes non−emitting renewable sources, such as solar energy;

(4) Reduces emissions from oil and gas extraction and production processes; and

(5) For the near term, pairs with the use of low NOx engines for additional NOx emission reduction. Public Health and Worker Safety Benefits Reduced emissions of PM2.5 and NOx reduce prema- ture mortality, hospitalizations, and emergency room visits. These benefits will accrue to the general public and workers exposed to emissions from transit buses, such as bus operators, passengers, and employees who work around bus traffic.

Energy Saving and Reduction of Petroleum Fuel Dependence In the long term, implementation of the proposed ICT regulation will lead the heavy−duty vehicle sector to transform from petroleum and other fossil−based fuels toward hydrogen or electricity for public transporta- tion. The superior equivalent fuel efficiency of ZEBs and the fuel sources together help pave a low carbon fu- ture for the heavy−duty vehicle sector. In addition, the proposed ICT regulation incents oth- er zero−emission mobility options for transit agencies.

The zero−emission mobility option can further reduce 1 California Air Resources Board (CARB). Overview: Diesel Ex- haust and Health. Available: https://www.arb.ca.gov/resources/ overview−diesel−exhaust−and−health. Accessed July 23, 2018.

CALIFORNIA REGULATORY NOTICE REGISTER 2018, VOLUME NO. 32-Z 1273 emissions, enhance mobility, and improve efficiency in the public transit system. Leading Zero−Emission Technologies in Other Heavy−Duty Sectors Transit agencies have played an important role as the leader deploying cleaner, more efficient technologies in the heavy−duty vehicle sector. Examples include diesel particulate matter filters, CNG engines, and low NOx engines. Transit agencies are also playing that leader- ship role in transforming the heavy duty sector to zero− emission technologies.

Transferable technologies in- clude drivetrains, fueling and charging systems, work- force training, and operations and maintenance exper- tise. Benefits in Disadvantaged Community and Job Creation The proposed ICT regulation is anticipated to deliver public health and environmental benefits that include GHG, criteria, and toxic pollutant emission reductions in disadvantaged communities (DACs) where there are more transit dependent riders. Additionally, California is home to ZEB manufacturing, which brings high− quality jobs to local communities.

There are several ZEB manufacturing plants in California, which stand to increase production of ZEBs, and thus manufacturing and related jobs, including in DAC areas. Electricians, construction companies (such as infrastructure install- ers), some bus manufacturers, fuel cell and battery pro- duction, and electric drivetrain parts and components businesses can fall into the small business category, which may benefit. Other Societal Benefits The proposed ICT regulation includes options to en- courage improved mobility and connectivity with zero− emission transportation modes.

These efforts would make communities and cities more sustainable and en- hance the benefits of investments in cleaner technolo- gies by reducing growth in light−duty vehicle miles traveled (VMT). In the long term, advanced transporta- tion systems and technologies, such as battery electric vehicles and zero−emission micro transit, have the po- tential to be a transformative element of a cleaner, safer, and more efficient transportation system.

Comparable Federal Regulations: There are no comparable federal regulations, necessi- tating the proposed ICT regulations to protect public health and achieve climate protection benefits. An Evaluation of Inconsistency or Incompatibility with Existing State Regulations (Gov. Code, § 11346.5, subd. (a)(3)(D)): During the process of developing the proposed regu- latory action, CARB conducted a search of any similar regulations on this topic and concluded these regula- tions are neither inconsistent nor incompatible with ex- isting state regulations.

DISCLOSURE REGARDING THE PROPOSED REGULATION Fiscal Impact/Local Mandate Determination Regarding the Proposed Action (Gov. Code, § 11346.5, subds. (a)(5)&(6)): The determinations of the Board’s Executive Officer concerning the costs or savings incurred by public agencies and private persons and businesses in reason- able compliance with the proposed regulatory action are presented below. Cost to Any Local Agencies and School Districts Requiring Reimbursement under

section 17500 et seq. Pursuant to Government Code sections 11346.5, sub- division (a)(5) and 11346.5, subdivision (a)(6), the pro- posed regulatory action is a mandate that would create costs and cost−savings to local agencies, but not to school districts. However, these costs to local agencies are not reimbursable by the State under Government Code, title 2, division 4,

part 7 (commencing with sec- tion 17500). Costs are not reimbursable when they may be fully financed by local agencies raising their own fees. (See, e.g., Clovis Unified School Dist. v. Chiang (2010) 188 Cal App. 4th 794, 812; Connell v. Superior Court (1997) 59 Cal. App. 4th 382, 397−403; County of Fresno v. State of California (1991) 53 Cal. 3d 482, 487−88; Cal. Gov. Code

section 17556(d)). The local transit agencies have authority to raise fees, if needed, to address the costs of this regulation. Therefore this is not a reimbursable mandate. The proposed ICT regulation directly impacts transit agencies, who are local agencies. The costs and cost− savings to transit agencies varies annually. Specific costs to each agency are expected to vary based on the size of their bus fleet. Agencies with the largest bus fleets are likely to be impacted the most.

Without addi- tional funding support, upfront costs from purchasing ZEBs and improving or adding infrastructure would outweigh cost−savings in the early years of regulation adoption. Over time, cost−savings in ZEB mainte- nance, fuel costs, credit value from the Low Carbon Fu- el Standard (LCFS) program, and the buildout of ZEB infrastructure is estimated to result in an overall cost− savings to transit agencies. This total cost estimate does not consider the potential incentives, grants, or other funding sources available to transit agencies, which is estimated to reduce some of the upfront cost.

Transit agencies will need to identify means of ad- dressing capital costs of bus purchase and infrastructure buildout in early years. The proposed ICT regulation is structured to provide an opportunity for transit agencies to take early action, ahead of regulatory deadlines, and

CALIFORNIA REGULATORY NOTICE REGISTER 2018, VOLUME NO. 32-Z 1274 would allow agencies to be eligible for grant funding, which could substantially reduce or eliminate the incre- mental costs of ZEB purchases and infrastructure. The State is committed to providing funding to help with transition to zero−emission technologies. There are several funding sources that could offset the incre- mental costs to transit agencies without relying on fi- nancing options (see the Initial Statement of Reasons (ISOR)

Chapter III,

Section C). For example, on May 31, 2018, the California Public Utility Commission (CPUC) unanimously approved transportation electri- fication projects proposed by three major Investor Owner Utilities (IOUs), with a total of $738 million in- cluding $236 million from Pacific Gas and Electric and $343 million from Southern California Edison on medi- um and heavy−duty infrastructure, required under Sen- ate Bill 350,

chapter 547, statutes of 2015. 2 This ap- proval would reduce the infrastructure costs to transit agencies in those utility service areas. In addition, on May 25, 2018, CARB approved allocations for V olkswagen Environmental Trust Funds that included up to $65 million for zero−emission transit buses. If insufficient funding is available to cover the up- front incremental costs, local agencies may also need to consider alternative methods to purchase buses, includ- ing battery lease arrangements that mitigate the higher bus costs.

In some cases, local governments or transit agencies may need to augment grant funding to address the remaining incremental costs. Local governments or transit agencies may need to reallocate revenue re- sources among different municipality services or trans- portation programs to comply with the ICT regulation. Cost or Savings for State Agencies: The ICT proposal will impose costs on CARB.

In ad- dition to current resources allocated to transit−related programs, CARB estimates one additional position is necessary to: • develop a reporting system prior to initial reporting by transit agencies in 2021, assisting transit agencies with compliance and annual reporting, • disseminate information to transit fleets, and • conduct compliance and enforcement activities, including auditing reported information and visiting sites to confirm vehicle equipment. The cost of the position is estimated to be $165,000 in 2020, and $164,000 every year afterwards.

The funding to cover the additional staff is expected to come from the Air Pollution Control Fund. The ICT proposal is not expected to have adverse im- pacts o n other state agencies. Other Non−Discretionary Costs or Savings on Local Agencies: The proposed ICT regulation affects transit agencies and is not expected to impose any non−discretionary costs or saving to transit agencies. Cost or Savings in Federal Funding to the State: The Federal Transit Administration (FTA) provides grants to local public transit systems, including buses.

Since 1964, FTA has partnered with state and local gov- ernments to create and enhance public transportation systems, investing more than $11 billion annually to support and expand public transit services. FTA pro- vides annual formula grants to transit agencies nation- wide as well as discretionary funding in competitive processes. The proposed ICT regulation is not expected to impose any costs or saving in Federal Funding to the State. Housing Costs (Gov.

Code, § 11346.5, subd. (a)(12)): The Executive Officer has also made the initial deter- mination that the proposed regulatory action will not have a significant effect on housing costs. Nothing in the regulation is expected to impact housing costs. Significant Statewide Adverse Economic Impact Directly Affecting Business, Including Ability to Compete (Gov.

Code, §§ 11346.3, subd. (a), 11346.5, subd. (a)(7), 11346.5, subd. (a)(8)): The Executive Officer has made an initial determina- tion that the proposed regulatory action would not have a significant statewide adverse economic impact direct- ly affecting businesses, including the ability of Califor- nia businesses to compete with businesses in other states, or on representative private persons. Industries that manufacture or support ZEB tech- nologies will see a demand increase as a result of the proposed ICT regulation. These businesses vary in size, revenue, and type of operations.

The main impacted businesses include: • ZEB manufacturers within motor vehicle manufacturing industries (NAICS code 3361) • Electrical vehicle supply equipment (EVSE) suppliers and installers (NAICS codes 3359 and 3353) • Construction and engineering service for hydrogen fueling station (NAICS code 5413) • Utilities (NAICS code 2211) as electricity generator and distribution, and hydrogen producer (NAICS code 3251) There are several ZEB manufacturers with plants lo- cated in California, including BYD Motors Inc., Com- plete Coach Works, Ebus, El Dorado National−Califor- nia, Gillig, GreenPower, and Proterra.

The increase in the production and usage of ZEBs could also benefit 2 Application of San Diego Gas & Electric Company (U 902E) for Approval of SB 350 Transportation Electrification Proposals (Cal.P .U.C. Decision 18−05−040 May 31, 2018) No. A17−01−020 and Related Matters A 17−01−021, 17−01−022.

CALIFORNIA REGULATORY NOTICE REGISTER 2018, VOLUME NO. 32-Z 1275 various businesses related to the ZEB component sup- ply chain, including those involved in battery, fuel cell, and electric drivetrain businesses. Some of these are al- so located in California. Because of the reduced use of conventional buses with internal combustion engines, the demand decrease is expected in the industries of conventional bus manu- facturing and oil and gas.

As most conventional bus manufacturers are likely to manufacture ZEBs at the same time, they may shift their operations to ZEB man- ufacturing to accommodate the increased demand for ZEB technologies. Small businesses in the industries described above could face similar impacts as typical businesses. Elec- tricians, construction companies, including infrastruc- ture installers, some bus manufacturers, fuel cell and battery production, and electric drivetrain parts and components businesses may fall into the small business category.

The benefits to ZEB manufacturers and other related business discussed above also apply to small businesses. But there is insufficient information about these indirect effects to quantify them or conclude they would be significant. MAJOR REGULATION Statement of the Results of the Standardized Reg- ulatory Impact Analysis (Gov. Code, § 11346.3, subd. (c)): In April 2018, CARB submitted a Standardized Reg- ulatory Impact Analysis (SRIA) to the Department of Finance (DOF) for its review . CARB has updated the proposed ICT regulation since the original SRIA sub- mittal, and to address DOF comments.

The revisions are discussed in the ISOR,

Chapter VIII,

Section A. The Creation or Elimination of Jobs within the State Employment growth slows minimally for local gov- ernment during the early years of the assessment as transit agencies begin phasing−in ZEB technologies. In later years, as operating and maintenance spending de- creases, local government sees positive, though small, employment growth relative to current conditions. Industries that manufacture, install, and support ZEB technologies may see employment growth at levels higher than current conditions.

These industries include ZEB manufacturing, charging infrastructure manufac- turing, engineering services, electricity generation, and hydrogen generation. With manufacturing facilities lo- cated in California, BYD, Proterra and GreenPower may bring significant employment opportunities. Some of these industries may fall into the category of small businesses and they would expect to see an increase in these types of jobs.

As transit agencies begin the deployment of ZEBs, demand for maintenance and conventional fuels de- cline, corresponding with the slowing in employment growth that is anticipated in these industries. The Creation of New Businesses or the Elimination of Existing Businesses within the State The proposed ICT regulation would provide incen- tives for the expansion of ZEBs and related component manufacturing. Business creation can occur both within the state and outside. Many manufacturers of ZEBs and component suppliers are already operating in Califor- nia, suggesting there will be growth in the state.

The Competitive Advantages or Disadvantages for Businesses Currentl