GAVIN NEWSOM, GOVERNOR OFFICE OF ADMINISTRATIVE LAW California Regulatory Notice Register REGISTER 2021, NUMBER 31-Z P UBLISHED WEEKLY BY THE OFFICE OF ADMINISTRATIVE LAW J ULY 30, 2021 PROPOSED ACTION ON REGULATIONS TITLE 2.

F AIR POLITICAL PRACTICES COMMISSION Conflict of Interest Code — Notice File Number Z2021–0720–03 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .959 AMENDMENT MULTI COUNTY: Balancing Authority of Northern CA JPA (BANC) Inland Empire Health Plan Access Joint Powers Agency Inland Empire Health Plan Joint Powers Agency STATE AGENCY: State Council on Developmental Disabilities ADOPTION MULTI–COUNTY: 49–99 Cooperative Library System TITLE 11.

COMMISSION ON PEACE OFFICER STANDARDS AND TRAINING Minimum Standards for Training for District Attorney Investigators — Notice File Number Z2021–0720–05 . . . . . . .960 TITLE 13. AIR RESOURCES BOARD Transport Refrigeration Units ATCM Amendments — Notice File Number Z2021–0714–01 . . . . . . . . . . . . . . . . . . . . .962 TITLE 16. CEMETER Y AND FUNERAL BUREAU Cemeteries: Unitrust Conversion — Notice File Number Z2021–0720–01 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .973 TITLE 16.

BOARD OF ACCOUNTANCY Sale/Transfer/Discontinuance of Licensee’ s Practice — Notice File Number Z2021–0720–02 . . . . . . . . . . . . . . . . . . .979 RULEMAKING PETITION DECISION DEPARTMENT OF CORRECTIONS AND REHABILITATION Regarding Petition from Griselda C . Moore to Amend Title 15 Division 3

Section 3260 .1 Public Record Duplication Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .983 (Continued on next page) Time- Dated Material

GENERAL PUBLIC INTEREST OCCUPATIONAL SAFETY AND HEALTH STANDARDS BOARD Public Meeting and Business Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .985 OFFICE OF ENVIRONMENTAL HEALTH HAZARD ASSESSMENT Proposed Public Health Goals for Perfluorooctanoic Acid and Perfluorooctane Sulfonic Acid in Drinking Water . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .985 DECISION NOT TO PROCEED CEMETERY AND FUNERAL BUREAU/ DEPARTMENT OF CONSUMER AFFAIRS Regarding Notice of Proposed Rulemaking Concerning Cemeteries: Endowment Care Fund — Unitrust, Originally Published on November 27, 2020, Register 2020, Number 49Z . . . . . . . . . . . . . . . . . . . . . . . . . . .986

SUMMARY OF REGULATORY ACTIONS Regulations filed with Secretary of State .............................................................. 987 The California Regulatory Notice Register is an official state publication of the Office of Administrative Law containing notices of proposed regulatory actions by state regulatory agencies to adopt, amend or repeal regulations contained in the California Code of Regulations. The effective period of a notice of proposed regulatory action by a state agency in the California Regulatory Notice Register shall not exceed one year [Government Code § 11346.4(b)].

It is suggested, therefore, that issues of the California Regulatory Notice Register be retained for a minimum of 18 months. CALIFORNIA REGULATORY NOTICE REGISTER is published weekly by the Office of Administrative Law, 300 Capitol Mall, Suite 1250, Sacramento, CA 95814-4339. The Register is printed by Barclays, a subsidiary of West, a Thomson Reuters Business, and is offered by subscription for $205.00 (annual price). To order or make changes to current subscriptions, please call (800) 328−4880. The Register can also be accessed at http://www.oal.ca.gov .

CALIFORNIA REGULATORY NOTICE REGISTER 2021, VOLUME NUMBER 31-Z 959 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 Polit - ical Practices Commission, pursuant to the authority vested in it by Sections 82011, 87303, and 87304 of the Government Code to review proposed conflict of interest codes, will review the proposed/amended con- flict of interest codes of the following: CONFLICT–OF–INTEREST CODES AMENDMENT MULTI–COUNTY: Balancing Authority of Northern CA JPA (BANC) Inland Empire Health Plan Health Access Joint Powers Agency Inland Empire Health Plan Joint Powers Agency STATE AGENCY: State Council on Developmental Disabilities ADOPTION MULTI–COUNTY: 49–99 Cooperative Library System A written comment period has been established com- mencing on July 30, 2021 and closing on September 13, 2021.

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

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

s) will be submit - ted 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

Section 87300, which designate, pursuant to Government Code

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

s) to the agency for revision and re– submission within 60 days without further notice. Any interested person may present statements, ar - guments or comments, in writing to the Executive Director of the Commission, relative to review of the proposed conflict of interest code(s). Any written com- ments must be received no later than September 13, 2021. If a public hearing is to be held, oral comments may be presented to the Commission at the hearing.

COST TO LOCAL AGENCIES There shall be no reimbursement for any new or 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. There- fore, they are not “costs mandated by the state” as de- fined in Government Code

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

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

CALIFORNIA REGULATORY NOTICE REGISTER 2021, VOLUME NUMBER 31-Z 960 CONTACT Any inquiries concerning the proposed conflict of interest code(

s) should be made to Daniel Vo, Fair Political Practices Commission, 1102 Q Street, Suite 3000, Sacramento, California 95811, telephone (916) 322–5660. A VAILABILITY OF PROPOSED CONFLICT–OF–INTEREST CODES Copies of the proposed conflict of interest codes may be obtained from the Commission offices or the respective agency. Requests for copies from the Com- mission should be made to Daniel Vo, Fair Political Practices Commission, 1102 Q Street, Suite 3000, Sac- ramento, California 95811, telephone (916) 322–5660. TITLE 11. COMMISSION ON PEACE OFFICER STANDARDS AND TRAINING MINIMUM STANDARDS FOR TRAINING FOR DISTRICT ATTORNEY INVESTIGATORS COMMISSION REGULATION 1005(

A) Notice is hereby given that the Commission on Peace Officer Standards and Training (POST) propos- es to amend regulations in Division 2 of Title 11 of the California Code of Regulations as described below in the Informative Digest. A public hearing is not sched- uled. Pursuant to Government Code

section 11346.8, any interested person, or his/her duly authorized rep - resentative, 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 13, 2021.

Notice is also given that any interested person, or authorized representative, may submit written com - ments relevant to the proposed regulatory action by fax at (916) 227–4547, by email to Kirk Bunch at kirk. bunch@post.ca.gov, or by letter to: Commission on POST Attention: Rulemaking 860 Stillwater Road, Suite 100 West Sacramento, CA 95605–1630 AUTHORITY AND REFERENCE This proposal is made pursuant to the authority vested by Penal Code (PC)

section 13503 (authority of POST) and PC

section 13506 (POST authority to adopt regulations). This proposal is intended to in - terpret, implement, and make specific PC

section 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 Currently, Commission Regulation 1005(

a) requires the completion of the POST Regular Basic Course (RBC) for District Attorney Investigators (DAI), which excludes those individuals who have complet - ed the POST Specialized Investigators Basic Course (SIBC) from being appointed as a DAI. Commission Regulation 1005(

a) requires a Mini - mum Entry–Level Training Standards, Basic Course Requirement: “Every peace officer, except Reserve Levels II and III, those peace officers listed in sub - sections 1005(a), [peace officers whose primary duties are investigative], 1005(a)(4) [coroners or deputy cor- oners], and 1005(a)(7) [jail deputies], shall complete the Regular Basic Course before being assigned du - ties which include the exercise of peace officer pow - ers . Requirements for the Regular Basic Course are set forth in Commission Procedures

Section D–1–3 .” POST staff propose updating Commission Regula - tion 1005(

a) to allow completion of the RBC or SIBC to meet the training requirements for DAIs. This change will provide a District Attorney’s Office the ability to hire individuals who have completed the SIBC or maintain the current training requirement of the RBC. The proposed regulation change is necessary to al - low individuals who have completed either the RBC or the SIBC to become employed as DAIs or Inspectors. In addition to the basic course training requirement, the POST–certified District Attorney Investigator Transition Course, Commission Procedure

Section D–14, shall be completed within 12 months from the date of appointment. Anticipated Benefits of the Proposed Amendments: The benefits anticipated by the proposed amend - ment to the regulation will be to allow a District Attorney’s Office the ability to also hire individuals who have completed the SIBC or maintain the current training requirement of the RBC, which will increase the efficiency of the state of California in delivering services to stakeholders. Thus, the law enforcement standards are maintained and effective in preserving peace, protection of public health, safety, and welfare of California.

The proposed amendments will have no impact on worker safety or the state’s environment. Evaluation of Inconsistency/Incompatibility with Existing State Regulations: POST has determined that these proposed amend - ments are not inconsistent or incompatible with exist - ing regulations. After conducting a review for any reg- ulations that would relate to or affect this area, POST

CALIFORNIA REGULATORY NOTICE REGISTER 2021, VOLUME NUMBER 31-Z 961 has concluded that these are the only regulations that concern DAIs. FORMS INCORPORATED BY REFERENCE There are no forms incorporated by reference. ADOPTION OF PROPOSED REGULATIONS Following the public comment period, the Commis- sion may adopt the proposal substantially as set forth without further notice, or the Commission may mod - ify the proposal if such modifications remain suffi - ciently related to the text as described in the Informa - tive Digest.

If the Commission 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 ad- dressed to the agency official designated 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 sections 17500–17630 re - quires reimbursement: None.

Significant Statewide Adverse Economic Impact Directly Affecting California Businesses: POST has made an initial determination that the amended reg - ulations will not have a significant statewide adverse economic impact directly affecting California busi - nesses, including the ability of California businesses to compete with businesses in other states.

Small Business Determination: POST has found that the proposed language will not affect small business because the amended language will not affect small business because the amended language addresses the update to the Minimum Entry–Level Training Stan - dards, Basic Course Requirement. Additionally, the Commission’s main function to se- lect and maintain training standards for law enforce - ment has no effect financially on small businesses.

Cost Impacts on Representative Private Persons or Businesses: POST is not aware of any cost impacts that a representative private person or business would necessarily incur in reasonable compliance with the proposed action. Effect on Housing Costs: POST has made an ini - tial determination that the proposed regulation would have no effect on housing costs. RESULTS OF ECONOMIC IMPACT ASSESSMENT PER GOV. CODE

SECTION 11346.3(

b) The adoption of the proposed amendments of reg - ulations will neither create nor eliminate jobs in the state of California, nor result in the elimination of ex - isting businesses or create or expand businesses in the state of California. The benefits of the proposed amendments of reg - ulations to the regulations will increase the efficien - cy of the state of California in delivering services to stakeholders. Thus, the law enforcement standards are maintained and effective in preserving peace, protec - tion of public health, safety, and welfare in California.

There would be no impact that would affect worker safety or the state’s environment.

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 at- tention of the Commission, would be more effective in carrying out the purpose for which the action is pro - posed, or would be as effective as and less burdensome to affected private persons than the proposed action, or would be more cost–effective to affected private per - sons and equally effective in implementing the statu - tory policy or other provision of law than the proposed action.

CONTACT PERSONS Questions regarding this proposed regulatory action may be directed to Kirk Bunch, Commission on POST, 860 Stillwater Road, Suite 100, West Sacramento, CA 95605–1630 at (916) 227–3896. General questions re - garding the regulatory process may be directed to Ka- tie Strickland at (916) 227–2802. 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 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 Web - site at https://post.ca.gov/Regulatory–Actions.

CALIFORNIA REGULATORY NOTICE REGISTER 2021, VOLUME NUMBER 31-Z 962 AVAILABILITY 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 approved, 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 AIRBORNE TOXIC CONTROL MEASURE FOR IN–USE DIESEL–FUELED TRANSPORT REFRIGERATION UNITS (TRU) AND TRU GENERATOR SETS, AND FACILITIES WHERE TRUS OPERATE The California Air Resources Board (CARB or Board) will conduct a public hearing at the date and time noted below to consider the proposed amend - ments to the Airborne Toxic Control Measure for In– Use Diesel–Fueled TRUs and TRU Generator Sets, and Facilities Where TRUs Operate (TRU ATCM). Date: September 23, 2021 Time: 12:30 p.m.

Please see the public agenda which will be posted at least ten days before the September 23, 2021, Board Meeting for any appropriate direction regarding a pos- sible remote–only Board Meeting. If the meeting is to be held in person — in addition to remote access — it will be held at the 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 12:30 p.m., September 23, 2021, and may continue at 8:30 a.m., on September 24, 2021.

Please consult the agenda for the hearing, which will be available at least ten days before Sep - tember 23, 2021, to determine the day on which this item will be considered. WRITTEN COMMENT PERIOD AND SUBMITTAL OF COMMENTS In accordance with the Administrative Procedure Act, interested members of the public may present comments orally or in writing during the hearing and may provide comments by postal mail or by electron - ic submittal before the hearing. The public comment period for this proposed regulatory action will begin on July 30, 2021.

Written comments not submitted during the hearing must be submitted on or after July 30, 2021 and received no later than September 13, 2021. Comments submitted outside that comment pe - riod are considered untimely. CARB may, but is not required to, respond to untimely comments, including those raising significant environmental issues. The Board also encourages members of the public to bring to the attention of staff in advance of the hearing any suggestions for modification of the proposed regula - tory action.

Comments submitted in advance of the hearing must be addressed to one of the following: Postal mail: Clerks’ Office, California Air Resources Board 1001 I Street, Sacramento, California 95814 Electronic submittal: https://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 public upon request.

Additionally, the Board requests but does not re - quire 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 author- ity granted in California Health and Safety Code, sec- tions 39600, 39601, 39618, 39658, 39659, 39666, 39667, 43013, 43018, and 43019.1. This action is proposed to implement, interpret, or make specific sections 39618, 39650, 39658, 39659, 39666, 39667, 39674, 39675, 42400, 42400.1, 42400.2, 42400.3.5, 42402, 42402.2, 42410, 43013, 43018, and 43019.1.

INFORMATIVE DIGEST OF PROPOSED ACTION AND POLICY STATEMENT OVERVIEW (GOV. CODE, § 11346.5, SUBDIVISION (a)(3)) Sections Affected: Proposed amendments to California Code of Regu - lations, title 13, sections 2477, 2477.1, 2477.2, 2477.3, 2477.4, 2477.5, 2477.6, 2477.7, 2477.8, 2477.9, 2477.10, 2477.11, 2477.12, 2477.13, 2477.14, 2477.15, 2477.16, 2477.17, 2477.18, 2477.19, 2477.20, and 2477.21. Pro-

CALIFORNIA REGULATORY NOTICE REGISTER 2021, VOLUME NUMBER 31-Z 963 posed adoption of California Code of Regulations, ti - tle 13,

section 2477.22, 2477.23, and 2477.24. Background and Effect of the Proposed Regulatory Action: CARB staff are proposing amendments to the TRU ATCM (Proposed Amendments) to achieve additional emission reductions from diesel–powered TRUs need- ed to better protect communities from near–source pollution impacts, contribute to meeting the current health–based ambient air quality standards across California, and further the State’s climate goals.

Background CARB adopted the TRU ATCM in 2004 (and amended it in 2010 and 2011) to reduce diesel partic - ulate matter (PM) emissions and resulting health risk from diesel–powered TRUs used to control the envi - ronment of temperature–sensitive products transport - ed in insulated trucks, trailers, shipping containers, or railcars, as well as diesel–powered TRU generator sets (gen set) that provide electric power to electrically– powered refrigeration units of any kind.

The TRU ATCM requires that TRU engines that operate in California meet specific in–use perfor - mance standards that require diesel PM emissions to be reduced in accordance with a phased compliance schedule. The phased compliance

schedule is based on the model year (M

Y) of the TRU engine and requires compliance with the in–use performance standard seven years after the engine M Y. The TRU ATCM includes two levels of stringency that were phased–in over time. The first phase, beginning in 2008, is the low emission TRU performance standard. The second phase, beginning in 2010, is the ultra–low emission TRU (ULETRU) performance standard. Ultimately, all TRU engines are required to meet the ULETRU performance standard and have 85 percent PM control (compared to an uncontrolled Tier 0 engine) to be fully compliant with the TRU ATCM.

CARB subsequently amended the TRU ATCM in 2010 and 2011. The 2010 amendments included addi- tional recordkeeping and reporting requirements for TRU original equipment manufacturers that directly or indirectly sell, or offer for sale, TRUs to the Cal - ifornia market. The amendments also included more stringent

definitions for compliance. The 2011 amend- ments extended certain TRU performance standard compliance deadlines from those originally contained in the 2004 regulation and included provisions to im - prove enforceability. Despite the progress made, the emission reductions achieved under the TRU ATCM are not sufficient to meet the State’s multiple risk reduction, air quality, and climate goals. Staff are proposing amendments to the TRU ATCM to achieve additional emission reduc- tions from diesel–powered TRUs and increase the use of zero–emission technology in the off–road sector.

These amendments are needed to meet these comple - mentary goals, as well as the directive of Executive Order N–79–20. 1,2 The Proposed Amendments are also needed to address the emergence and growth in the number of units equipped with engines less than 25 horsepower. The 2021 update to the statewide TRU emission inventory indicates growing sales of units with less than 25 horsepower engines, which contrasts with previous inventories where all trailer TRU en- gines were over 25 horsepower.

The federal and Cali- fornia PM off–road emission standard for engines less than 25 horsepower is 15 times higher (i.e., less strin - gent) than the standard for engines greater than 25 horsepower. As a result, diesel PM emissions have not been reduced under the TRU ATCM as expected. Similar trends are also expected for domestic shipping container (DSC) TRUs, railcar TRUs, and TRU gen sets. Based on the TRU emission inventory, the num - ber of TRUs equipped with engines less than 25 horse- power will become responsible for the majority of PM emissions from TRUs in the near future, if current trends continue.

Effect of the Proposed Amendments The Proposed Amendments are designed to achieve added public health, air quality, and climate benefits by requiring the transition of diesel–powered truck TRUs to zero–emission technology, a PM emission standard for newly–manufactured TRU engines in the remaining categories, and the use of lower–global warming potential (GWP) refrigerant. The Proposed Amendments also include new requirements for own - ers and operators of facilities where TRUs operate; expanded requirements for TRU reporting and com - pliance labels; and fees.

Key elements of the Proposed Amendments include the following: By December 31, 2022: ● All newly–manufactured truck TRUs, trailer TRUs, and DSC TRUs that operate in California shall use refrigerant with a GWP less than or equal to 2,200, or no refrigerant at all. ● M Y 2023 and newer trailer TRU, DSC TRU, railcar TRU, and TRU gen set engines shall meet a PM emission standard of 0.02 grams per brake horsepower–hour (g/hp–hr) or lower. ○ Note: M Y 2022 and older trailer TRU, DSC TRU, railcar TRU, and TRU gen set engines would continue to operate under the existing TRU ATCM requirements, in which they shall meet ULETRU by December 31 of 1 Executive Order N–79–20, State of California Executive Order signed by Governor Gavin Newsom, September 23, 2020. (web link: https://www.gov.ca.gov/wp–content/ uploads/2020/09/9.23.20–EO–N–79–20–Climate.pdf ) 2 EO N–79–20 set a goal for 100 percent zero–emission off–road v ehicles and equipment by 2035.

CALIFORNIA REGULATORY NOTICE REGISTER 2021, VOLUME NUMBER 31-Z 964 the seventh year after the engine M Y. For example, a trailer TRU equipped with a M Y 2020 engine would have to meet ULETRU by December 31, 2027.

By December 31, 2023: ● Applicable facility 3 owners shall register their facility with CARB, pay registration fees every three years, and report all TRUs that operate at their facility to CARB quarterly, or alternatively attest that only compliant TRUs (i.e., those with a valid CARB compliance label or showing as compliant on CARB’s website) operate at their facility. ● TRU owners shall report all TRUs that operate in California, regardless of where they are based. ● TRU owners shall pay TRU operating fees and affix CARB compliance labels to their TRU every three years, for each TRU operated in California. ● TRU owners shall turnover at least 15 percent of their truck TRU fleet (defined as truck TRUs operating in California) to zero–emission technology each year (for 7 years).

All truck TRUs operating in California shall be zero–emission by December 31, 2029. CARB may also consider other changes to the sec - tions affected, as listed on page two of this notice, or other sections within the scope of this notice, during the course of this rulemaking process.

Objectives and Benefits of the Proposed Regulatory Action: Objectives The main objectives of the Proposed Amendments are to: 1) achieve fine particulate matter (PM2.5), ox - ides of nitrogen (NOx), and greenhouse gas (GHG) emission reductions needed to protect communi - ties from near–source pollution impacts, contribute toward meeting the current health based ambient air quality standards across California, and toward achieving the State’s climate goals; 2) transition die - sel–powered TRUs to zero–emission technology, as directed by EO N–79–20, which set a goal for 100 per- cent zero–emission off–road vehicles and equipment by 2035; 3) address the emergence and growth in the number of trailer TRUs, DSC TRUs, railcar TRUs, and TRU gen sets equipped with engines less than 25 horsepower, which have less stringent emission stan- dards; 4) address multiple State policies and plans di - recting CARB to achieve additional diesel emission reductions; 5) strengthen the regulation by including 3 An applicable facility is defined in the Proposed Amendments as a refrigerated warehouse or distribution center with a building size greater than or equal to 20,000 square feet, a grocery store with a building size greater than or equal to 15,000 square feet, a seaport facility, or an intermodal railyard if one or more trailer TRUs or TRU gen sets operate within the legal property bound - ary of the facility. requirements for owners and operators of facilities where TRUs operate and vehicle owners, as well as expanded TRU reporting and labeling to monitor com- pliance; and 6) collect fees from TRU and applicable facility owners to cover CARB’s reasonable costs as- sociated with the certification, audit, and compliance of TRUs, as allowed by Senate Bill 854.

Benefits The primary benefits of the Proposed Amendments are PM2.5, NOx, and GHG emission reductions from diesel–powered TRUs that operate in California. Staff estimate that cumulatively, from 2022 to 2034, the Pro- posed Amendments will reduce statewide TRU emis - sions by approximately 1,258 tons of PM2.5, 3,515 tons of NOx, and 1.42 million metric tonnes of GHGs, relative to the baseline.

These emission reductions will benefit California residents by reducing cancer risk to individual residents and off–site workers near facili - ties where TRUs operate, including those located in and near disadvantaged communities; improving air quality and resulting ozone exposure from reductions in NOx; providing GHG emission reductions (includ - ing the powerful short–lived climate pollutants hy - drofluorocarbons and black carbon) needed to combat climate change; and reducing non–cancer health im- pacts such as premature deaths, hospital visits for car- diovascular and respiratory illnesses, and emergency room visits for asthma, especially in sensitive recep - tors including children, the elderly, and people with chronic heart or lung disease.

The total statewide val - uation of avoided adverse health outcomes as a result of the Proposed Amendments from 2022 to 2034 is approximately $1.75 billion. Emission reductions will also reduce occupational exposure and benefit on–site workers, including, but not limited to TRU operators, drivers, and other individuals who work at facilities where TRUs operate. The Proposed Amendments will provide an oppor - tunity to increase zero–emission technology in the off– road sector.

As more fleets use zero–emission truck TRU technologies as a result of the Proposed Amend- ments, industry acceptance of advanced technologies will improve. The state of zero–emission TRU tech - nology will progress and expand into extended range applications, as well as other off–road sectors. Pur - chases of zero–emission truck TRUs will also benefit zero–emission TRU manufacturers, as well as various businesses in the zero–emission TRU supply chain, in- cluding those involved in battery, fuel cell, cold plate, and solar photovoltaic technology throughout the State.

Supporting infrastructure installations will pro - vide opportunities for design, engineering, construc - tion, and project management firms to design new and expanded infrastructure at approximately 1,000 truck TRU home base facilities statewide, as well as benefit suppliers, equipment installers, and electricians. The

CALIFORNIA REGULATORY NOTICE REGISTER 2021, VOLUME NUMBER 31-Z 965 expansion of electric charging infrastructure will also increase the amount of electricity supplied by utility providers and help the State’s investor–owned utilities meet the goals of Senate Bill 350, which requires the State’s investor–owned utilities to develop programs to accelerate widespread transportation electrification with goals to reduce dependence on petroleum, in- crease the uptake of zero–emission vehicles, help meet air quality standards, and reduce GHGs. Lastly, the Proposed Amendments will result in noise reduction benefits.

Diesel–powered TRUs can produce a substantial amount of noise, which also results in adverse health impacts. This is of concern when TRUs operate in and near places where people live, work, and play. Staff have received several noise complaints regarding TRU activity near schools, hos - pitals, elder care facilities, and residential neighbor - hoods. The Proposed Amendments will transition die- sel truck TRUs to zero–emission technology, which produces little to no noise. This will eventually elimi - nate the use of diesel–powered truck TRUs and reduce noise levels.

Public Process To ensure an open and transparent rulemaking, staff have engaged in an extensive public process since de- velopment of the Proposed Amendments began in ear- ly 2016. Staff conducted eight public workshops to discuss regulatory concepts, methodology and data used to develop the emission inventory and conduct a health risk assessment, infrastructure considerations, compliance and enforcement mechanisms, as well as solicit stakeholder feedback.

Staff posted information regarding these workshops and any associated materi- als on the TRU Regulation website 4 and distributed notice of these meetings through several public list serves that include over 17,000 recipients. 5 In addi - tion, staff held three work group meetings to solicit feedback on regulatory concepts, as well as discuss infrastructure and enforcement issues related to the Proposed Amendments.

As of June 2021, staff have conducted more than 160 informal meetings, phone calls, and site visits with a broad group of stakeholders to discuss the Proposed Amendments and gather input and information.

This includes members of impacted communities, environ- 4 California Air Resources Board, New Transport Refrigeration Unit Regulation in Development Website. (web link: https://ww2. arb.ca.gov/our–work/programs/transport–refrigeration–unit/ new–transport–refrigeration–unit–regulation ) 5 Number of subscribers for the following CARB lists as of Jan - uary 28, 2021: Agricultural Activities, Community Air, Envi - ronmental Justice ChERRP, Commerce, Environmental Justice ChERRP, Mira Loma, Environmental Justice ChERRP, Wilm - ington, Goods Movement Emission Reduction Program, Port Truck, Reduction of GHG Emissions from Refrigerated Shipping Containers, Stationary Equipment Refrigerant Management Pro - gram, Sustainable Freight Transport Initiative, and Transport Re - frigeration Units. mental justice advocates, air districts, TRU owners and operators, trade associations, TRU manufactur - ers, TRU dealers and service centers, truck and trailer dealers, truck and trailer leasing companies, freight brokers, forwarders, shippers, receivers, freight facil - ity owners and operators, and other interested parties.

In addition to meeting with a wide range of stake - holders, staff also conducted targeted outreach to po - tential applicable facilities. This includes mailing over 40,000 postcards to facilities with refrigerated oper - ations potentially affected by the Proposed Amend - ments to notify them of upcoming workshops and di - rect them to the TRU Regulation website for more in- formation.

Staff also visited several facilities, includ - ing refrigerated warehouses and distribution centers, cold storage warehouses, port terminals, and railyards to learn more about their business operations and to better understand potential implementation challeng - es associated with the Proposed Amendments. A de - tailed

summary of all stakeholder outreach activities is included in

Chapter XIV of the Initial Statement of Reasons (ISOR). Comparable Federal Regulations: The United States Environmental Protection Agen - cy (U.S. EPA) and CARB regulate TRU engines as mobile non–road (off–road) engines (referred to as off–road throughout this rulemaking). Federal off– road compression–ignition engine emission standards are set forth for new engines in 40 Code of Federal Regulations

Part 89. California standards for new off– road compression–ignition engines align with federal requirements and are set forth in California Code of Regulations, title 13,

Article 4, sections 2420–2427, under “Heavy Duty Off–road Diesel Cycle Engines.” The Proposed Amendments require new TRU en - gines operating in California to meet emission stan- dards that generally align with the harmonized fed - eral/State off–road compression–ignition engine emission standards. More specifically, the Proposed Amendments require newly–manufactured (M Y 2023 and newer) trailer TRU, DSC TRU, railcar TRU, and TRU gen set engines to meet a PM standard that aligns with the U.S. EPA Tier 4 final PM emission standard for engines greater than 25 horsepower.

Engines less than 25 horsepower would be required to meet a PM emission standard more stringent than the harmonized federal/California PM standard. In–use (M Y 2022 and older) trailer TRU, DSC TRU, railcar TRU, and TRU gen set engines would continue to operate under the current TRU ATCM requirements. The more stringent PM standard for newly–manu - factured trailer TRU, DSC TRU, railcar TRU, and TRU gen set engines less than 25 horsepower is needed to address the emergence and growth in the number of units equipped with engines less than 25 horsepower. As discussed previously, the 2021 update to the state -

CALIFORNIA REGULATORY NOTICE REGISTER 2021, VOLUME NUMBER 31-Z 966 wide TRU emission inventory indicates growing sales of trailer TRUs with less than 25 horsepower engines, which contrasts with previous inventories where all trailer TRU engines were over 25 horsepower. The federal and California federal PM off–road emission standard for engines less than 25 horsepower is 15 times higher than the standard for engines greater than 25 horsepower. As a result, diesel PM emissions have not been reduced under the TRU ATCM as expect - ed. Similar trends are also expected for DSC TRUs, railcar TRUs, and TRU gen sets.

Based on the TRU emission inventory, the number of units equipped with engines less than 25 horsepower will become respon - sible for the majority of PM emissions from TRUs in the near future, if current trends continue. The Proposed Amendments follow the precedent set by the current TRU ATCM, which already requires more stringent in–use diesel emission standards than federal requirements. CARB adopted the TRU ATCM in 2004, and U.S. EPA authorized California to en - force the regulation in 2009. 6 CARB subsequently ad- opted amendments in 2010 and 2011. U.S.

EPA deter- mined those amendments fell within the scope of the original authorization and also granted full authoriza - tion. 7,8 In granting CARB authorization, U.S. EPA acknowledged that unique circumstances exist in Cal- ifornia necessitating the need for the State’s own off– road mobile source pollution program. As discussed in

Chapter II of the ISOR, California has a critical need to reduce exposure to air toxics such as diesel PM, as well as PM, NOx, and GHG emissions. The benefits of protecting public health and reducing emissions justi - fy the cost of adopting regulations that differ from ex- isting federal regulations. Currently, there are no federal regulations establish- ing requirements on the use of zero–emission technol- ogies or lower–GWP refrigerant for TRUs, as would be required by the Proposed Amendments. An Evaluation of Inconsistency or Incompatibility with Existing State Regulations (Gov.

Code, § 11346.5, subdivision (a)(3)(D)): During the process of developing the proposed regulatory action, CARB conducted a search of any similar regulations on this topic and concluded these regulations are neither inconsistent nor incompatible with existing state regulations. 6 United States Environmental Protection Agency, Federal Reg - ister, Vol. 74, No. 11, Page 3030, January 16, 2009. (web link: https://www.govinfo.gov/content/pkg/FR–2009–01–16/pdf/E9– 907.pdf) 8 United States Environmental Protection Agency, Federal Regis - ter, Vol. 82, Number 12, Page 6525, January 19, 2017. (web link: https://thefederalregister.org/82–FR/6522/2017–01235.pdf ) 7 United States Environmental Protection Agency, Federal Reg - ister, Vol. 78, Number 125, Page 39870, June 28, 2013. (web link: https://www.govinfo.gov/content/pkg/FR–2013–06–28/ pdf/2013–15437.pdf) DISCLOSURES REGARDING THE PROPOSED REGULATION Fiscal Impact/Local Mandate Determination Regarding the Proposed Action (Gov.

Code, § 11346.5, subdivisions (a)(5)&(6)): The determinations of the Board’s Executive Offi - cer 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 regula - tory action would create costs or savings to any State agency, would not create costs or savings in federal funding to the State, would create costs or mandate to any local agency or school district, whether or not re - imbursable 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. Cost to any Local Agency or School District Requiring Reimbursement under

section 17500 et seq . Pursuant to Government Code sections 11346.5, subdivision (a)(5) and 11346.5, subdivision (a)(6), the Proposed Amendments are a mandate that would cre - ate costs and cost–savings to local agencies and 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

section 17500). The mandate is not reimbursable because costs associated with the Proposed Amendments apply gen- erally to all owners of TRUs or applicable facilities, including local agencies and school districts. There - fore, the Proposed Amendments do not constitute a “Program” imposing any unique requirements on lo - cal agencies or school districts as set forth in Govern - ment Code

section 17514. Cost or Savings for State Agencies The estimated costs to CARB as a result of the Proposed Amendments include the direct and indi - rect labor costs for the additional positions needed to successfully implement and enforce the Proposed Amendments as described below and operational costs (e.g., compliance labels, envelopes, and postage). ● 3.0 Air Pollution Specialist (APS) positions and 6.0 Air Resources Technician (ART) II positions in Fiscal Year 2022–2023. ● Air Resources Supervisor I, 1.0 Staff Services Manager, 1.0 APS, and 10.0 ART II positions in Fiscal Year 2023–2024.

Implementation duties include assisting owners with TRU reporting and applicable facility registra - tion, providing technical assistance, and issuing com-

CALIFORNIA REGULATORY NOTICE REGISTER 2021, VOLUME NUMBER 31-Z 967 pliance labels. Enforcement duties include conducting unit, fleet, and facility inspections; fleet and facility investigations; and issuing and processing citations. The need for additional staff is due to additional re - quirements in the Proposed Amendments requiring out–of–state based TRU reporting, TRU operating fees, applicable facility registration, applicable facility registration fees, and applicable facility reporting.

The Proposed Amendments will also have a fiscal impact on State government agencies that own TRUs or applicable facilities. Staff determined State govern- ment agencies own 159 TRUs, or 0.08 percent of the total number of TRUs. Staff applied this percentage to the total equipment–related direct costs to estimate the costs incurred by State government TRU owners. Staff determined that State government owns six truck TRU home base facilities and two applicable facilities. The Proposed Amendments will increase the num - ber of zero–emission TRUs in the State.

Displacing diesel with electricity will decrease the total amount of diesel fuel dispensed in the State, resulting in a re - duction in diesel fuel tax revenue collected by State government. For this analysis, staff used the combined State and local sales tax rate of 8.6 percent, which is a weighted average based on county–level output, with 3.94 percent 9 going towards State sales tax and 4.67 percent10 going towards local sales tax.

The Energy Resources Fee is a $0.0003/kilowatt– hour surcharge levied on consumers of electricity pur- chased from electrical utilities. 11 The revenue collect- ed is deposited into the Energy Resources Programs Account of the General Fund which is used for ongo - ing energy programs and projects deemed appropriate by the Legislature, including but not limited to, activ - ities of the California Energy Commission. The Proposed Amendments include TRU operat - ing fees and applicable facility registration fees. The proposed fee

schedule is included in

Chapter X of the ISOR. The proposed fees will result in revenue to the State to offset costs to CARB to implement and en - force the Proposed Amendments. Sales tax is levied in California to fund a variety of programs at the local and State levels.

The Proposed Amendments will result in the sale of more expensive TRUs and infrastructure in California, which will re - sult in a direct increase in sales tax revenue collected 9 California Department of Tax and Fee Administration, Detailed Description of the Sales & Use Tax Rate. (web link: https://www. cdtfa.ca.gov/taxes–and–fees/sut–rates–description.htm, last ac - cessed May 24, 2021) 10 California Department of Tax and Fee Administration, Califor - nia City & County Sales & Use Tax Rates, October 2020. (web link: https://www.cdtfa.ca.gov/taxes–and–fees/sales–use–tax– rates.htm) 11 California Department of Tax and Fee Administration, 2020 Electrical Energy Surcharge Rate, December 2019. (web link: https://www.cdtfa.ca.gov/formspubs/1725.pdf) by the State.

However, overall, State sales tax revenue may increase less than the direct increase from TRU and infrastructure sales if overall business spending does not increase. Staff used a combined State and lo- cal sales tax rate of 8.6 percent, which is a weighted average based on county–level output, with 3.94 per - cent 12 going towards State sales tax and 4.67 percent13 going towards local sales tax.

From 2022 to 2034, staff estimated the cost to State government due to the Proposed Amendments to be $1.1 million, resulting from TRUs and applicable fa - cilities owned by State government; and approximate- ly $47.1 million in costs to CARB. State government will also see a direct increase in revenue from Energy Resources Fees, TRU operating fees, applicable facil- ity registration fees, and State sales tax of $71.8 mil - lion; as well as a decrease in sales tax from diesel fuel of $22.6 million. Staff estimated the total fiscal impact to State government to be –$927,000 from 2022 to 2034.

CARB will seek authorization to use collected TRU operating fees and applicable facility registration fees to offset costs incurred to implement and enforce the Proposed Amendments. Other Non–Discretionary Costs or Savings on Local Agencies The Proposed Amendments will have a fiscal im - pact on local government agencies that own TRUs or applicable facilities. Staff determined local govern - ments own 256 TRUs, or 0.132 percent of the total number of TRUs. Staff applied this percentage to the total equipment–related direct costs to estimate the costs incurred by local government TRU owners.

Staff determined that local government owns 25 truck TRU home base facilities and 19 applicable facilities. Several cities and counties in California levy a util - ity user tax on electricity usage. This tax varies from city to city and ranges from no tax to 11 percent.

Staff used a value of 3.53 percent, representing a population–weighted average. 14 The Proposed Amendments will increase the number of zero–emis - sion TRUs in the State, which will increase the amount of electricity used and the amount of utility user tax revenue collected by cities and counties. 12 California Department of Tax and Fee Administration, Detailed Description of the Sales & Use Tax Rate. (web link: https://www. cdtfa.ca.gov/taxes–and–fees/sut–rates–description.htm, last ac - cessed May 24, 2021) 13 California Department of Tax and Fee Administration, Califor - nia City & County Sales & Use Tax Rates, October 2020. (web link: https://www.cdtfa.ca.gov/taxes–and–fees/sales–use–tax– rates.htm) 14 California State Controller’s Office, California Cities Utility Users Taxes Revenue and Tax Rate Fiscal Year 2018–19, Novem- ber 2020. (web link: https://www.sco.ca.gov/Files–ARD–Local/ LocRep/2018–19_Cities_UUT.pdf)

CALIFORNIA REGULATORY NOTICE REGISTER 2021, VOLUME NUMBER 31-Z 968 Off–road diesel is exempt from on–road diesel tax - es, but does incur sales tax. 15 Displacing diesel with electricity will decrease the total amount of diesel fuel dispensed in the State, resulting in a reduction in tax revenue collected by local governments. For this anal- ysis, staff used the combined State and local sales tax rate of 8.6 percent, which is a weighted average based on county–level output, with 3.94 percent 16 going to - wards State sales tax and 4.67 percent17 going towards local sales tax.

Sales tax is levied in California to fund a variety of programs at the local and State levels. The Proposed Amendments will result in the sale of more expensive TRUs and infrastructure in California, which will re - sult in a direct increase in sales tax revenue collected by local governments. However, overall, local sales tax revenue may increase less than the direct increase from TRU and infrastructure sales if overall business spending does not increase.

Staff used a combined State and local sales tax rate of 8.6 percent, which is a weighted average based on county–level output, with 3.94 percent 18 going towards State sales tax and 4.67 percent19 going towards local sales tax. From 2022 to 2034, staff estimated the cost to lo - cal governments due to the Proposed Amendments to be $3.8 million, resulting from TRUs and applicable facilities owned by local governments. Local govern - ments will also see a direct increase in utility user and local sales tax revenue of $19.1 million and a decrease in sales tax from diesel fuel of $4.9 million.

Staff es - timated the total fiscal impact to local governments to be –$10.4 million from 2022 to 2034.

Cost or Savings in Federal Funding to the State The Proposed Amendments are not expected to impose any costs or savings in federal funding to the State. 15 California Department of Tax and Fee Administration, Califor - nia City & County Sales & Use Tax Rates, October 2020. (web link: https://www.cdtfa.ca.gov/taxes–and–fees/sales–use–tax– rates.htm) 16 California Department of Tax and Fee Administration, Detailed Description of the Sales & Use Tax Rate. (web link: https://www. cdtfa.ca.gov/taxes–and–fees/sut–rates–description.htm, last ac - cessed May 24, 2021) 17 California Department of Tax and Fee Administration, Califor - nia City & County Sales & Use Tax Rates, October 2020. (web link: https://www.cdtfa.ca.gov/taxes–and–fees/sales–use–tax– rates.htm) 18 California Department of Tax and Fee Administration, Detailed Description of the Sales & Use Tax Rate. (web link: https://www. cdtfa.ca.gov/taxes–and–fees/sut–rates–description.htm, last ac - cessed May 24, 2021) 19 California Department of Tax and Fee Administration, Califor - nia City & County Sales & Use Tax Rates, October 2020. (web link: https://www.cdtfa.ca.gov/taxes–and–fees/sales–use–tax– rates.htm) Housing Costs (Gov.

Code, § 11346.5, subdivision (a)(12)): The Executive Officer has also made the initial de - termination that the proposed regulatory action will not have a significant effect on housing costs. Significant Statewide Adverse Economic Impact Directly Affecting Business, Including Ability to Compete (Gov.

Code, §§ 11346.3, subdivision (a), 11346.5, subdivsion (a)(7), 11346.5, subdivion (a)(8)): The Executive Officer has made an initial determi - nation that the proposed regulatory action would not have a significant statewide adverse economic impact directly affecting businesses, including the ability of California businesses to compete with businesses in other states, or on representative private persons. Results of The Economic Impact Analysis/ Assessment (Gov. Code, § 11346.5, subdivision (a)(10)): MAJOR REGULATION: STATEMENT OF THE RESULTS OF THE STANDARDIZED REGULATORY IMPACT ANALYSIS (SRIA) (GOV.

CODE, § 11346.3, SUBDIVISION (c)) In May 2021, CARB submitted a SRIA to the De - partment of Finance (DOF) for its review. CARB has updated the Proposed Amendments since the original SRIA submittal, and to address DOF comments. The revisions are discussed in

Chapter X of the ISOR. The creation or elimination of jobs within the State Staff anticipate the statewide employment impacts of the Proposed Amendments to be slightly positive in 2023 and 2024, corresponding with demand for zero– emission truck TRUs and supporting infrastructure from in–state fleets. From 2025 through 2034, the em- ployment impacts are estimated to be negative as the overall costs of the Proposed Amendments offset the positive impacts of additional in–state demand.

Staff used Regional Economic Models, Inc. (REMI) Policy Insight Plus Version 2.4.1 to estimate the mac- roeconomic impacts of the Proposed Amendments on the California economy. REMI is a structural economic forecasting and policy analysis model that integrates input–output, computable general equilibri- um, and econometric and economic geography meth- odologies. The REMI model estimated at most a 0.01 percent increase or decrease in statewide employment, relative to the baseline, due to the Proposed Amend- ments.

The economy is expected to grow over this period and therefore, reduced employment, relative to the baseline, can be interpreted as a reduction in em- ployment growth. This amounted to a total increase in employment of 151 jobs in the year with the greatest

CALIFORNIA REGULATORY NOTICE REGISTER 2021, VOLUME NUMBER 31-Z 969 positive impact, and decreases in employment of 1,438 jobs in the year with the most negative impact. The creation of new businesses or the elimination of existing businesses within the State Staff do not anticipate the Proposed Amendments will directly result in business creation or elimination. However, the Proposed Amendments may have a small indirect impact on business creation or elimination. TRU fleets and applicable facilities face compliance costs, and the potential for some of these business to be eliminated cannot be ruled out.

While changes in jobs for the California economy cannot directly estimate the broader impacts of busi - ness creation and elimination, job changes can be used to understand some of the potential impacts to businesses. The overall job impacts of the Proposed Amendments are small relative to the total California economy. The changes in statewide employment rep - resent, at most, a 0.01 percent change relative to base- line California employment in any given year.

The competitive advantages or disadvantages for businesses currently doing business within the State Staff do not anticipate impacts to the competitive ad- vantage or disadvantage to businesses currently doing business in the State because the Proposed Amend - ments impose requirements equally on all TRUs that operate in California, whether the business that owns or operates them is based in–state or out–of–state. All businesses owning or operating TRUs would be subject to the same refrigerant, PM standard, and zero–emission truck TRU requirements, regardless of in–state or out–of–state ownership status.

Thus, the Proposed Amendments would not create any compet - itive disadvantage to businesses located in California. Businesses that already use zero–emission TRU technologies may gain a competitive advantage com - pared to fleets that rely on diesel–powered TRUs in the baseline. Some businesses may already be using cold plate and cryogenic TRUs in addition to bat - tery–electric TRUs. Such businesses will not have large compliance costs associated with the Proposed Amendments and may also gain a competitive advan - tage compared to fleets that rely on diesel–powered TRUs in the baseline.

Applicable facilities are required to pay registration fees and ensure that TRUs operating on their proper - ty are compliant. The applicable facilities are based on size thresholds and facilities below these specific thresholds will not face direct costs associated with the Proposed Amendments. Therefore, facilities below the threshold may gain a slight competitive advantage compared to larger facilities. Out–of–state facilities will not face the same registration fees and reporting costs.

Therefore, California–based facilities may also face a competitive disadvantage to other similar–sized applicable facilities in close proximity, but in another state. Staff do not consider these impacts significant because fees and reporting costs are relatively small compared to the total cost of the Proposed Amend - ments. The average annual cost for an applicable facil- ity to comply with the Proposed Amendments is less than one percent of their annual revenue.

The increase or decrease of investment in the State Private domestic investment consists of purchas - es of residential and nonresidential structures and of equipment and software by private businesses and nonprofit institutions. It is used as a proxy for im - pacts on investments in California because it provides an indicator of the future productive capacity of the economy. Based on the macroeconomic impact analy- sis, change in private investment due to the Proposed Amendments ranges from a decrease of $2 million in 2023 to a decrease of $48 million in 2029.

In any given year, the change in private investment represents less than 0.01 percent of baseline investment. The incentives for innovation in products, materials, or processes The Proposed Amendments provide a strong signal for the development of zero–emission TRU technolo - gies and help in building a robust market for advanced technologies. Staff anticipate growth in the industries that manufacture zero–emission TRU technologies, which will strengthen the supply chain and result in technology improvements earlier than they would have otherwise occurred.

For example, improvements in battery weight and range are needed to improve market acceptance and bring overall battery–electric technology costs down. These improvements will al - low advanced technologies to expand further into ex - tended range TRU applications, as well as other off– road sectors. In addition, due to the large volume of refrigerated product that moves through California, there is the possibility that the Proposed Amendments will compel TRU original equipment manufacturers to incorporate advanced technologies and lower– GWP refrigerant into units sold outside of the State.

The benefits of the regulations, including, but not limited to, benefits to the health, safety, and welfare of California residents, worker safety, and the State’s environment and quality of life, among any other benefits identified by the agency The Proposed Amendments will reduce PM2.5, NOx, and GHG emissions from diesel–powered TRUs that operate in California. Cumulatively, from 2022 to 2034, the Proposed Amendments are expected to re - duce statewide TRU emissions by approximately 1,258 tons of PM2.5, 3,515 tons of NOx, and 1.42 million metric tonnes of GHGs, relative to the baseline.

These emission reductions will benefit California residents by reducing cancer risk near facilities where TRUs operate; improving air quality and resulting ozone

CALIFORNIA REGULATORY NOTICE REGISTER 2021, VOLUME NUMBER 31-Z 970 exposure from reductions in NOx; providing GHG emission reductions needed to combat climate change; as well as reducing non–cancer health impacts such as premature deaths, hospital visits, emergency room visits, and other adverse health impacts, especially in sensitive receptors including children, the elderly, and people with chronic heart or lung disease.

Emission reductions will also reduce occupational exposure and benefit on–site workers, including, but not limited to TRU operators, drivers, and other individuals who work at facilities where TRUs operate. The estimated statewide value of health benefits from reduced PM2.5 and NOx emissions, as well as the value of GHG emis- sion reductions using the social cost of carbon, are de- scribed in

Chapter V of the ISOR. Department of Finance Comments and Responses DOF Comment #1: The costs of equipment dispos - al must be quantified. Because existing ATCM regu - lations prevent sale of non–complying TRUs within California, the revised emissions and zero–emission requirements will effectively decrease or eliminate the resale value of existing equipment that was complying under the existing ATCM requirements within Cali - fornia.

Based on CARB’s 2019 Emissions Inventory for Transport Refrigeration Units, historically around 20 percent of non–complying non–truck TRUs are re- placed rather than retrofit and all truck TRUs must be replaced, which means around 45,000 of the original 200,000 TRUs will either need to be scrapped or sold interstate when they become non–compliant and the SRIA should quantify the costs associated with this.

Response: Because the current TRU ATCM impos- es more stringent emissions requirements on TRUs operating in California compared to those that do not, TRU owners already scrap or sell their units for use out–of–state when they become non–compliant for use in California. Under the Proposed Amendments, the PM emission standard requirement applies to newly–manufactured units, while the zero–emission truck TRU requirement is phased in at 15 percent each year. The zero–emission truck TRU phase–in com - pliance

schedule generally aligns with the average 7– to–10–year useful life for truck TRUs. Therefore, staff do not believe TRU turnover would be significantly accelerated due to the Proposed Amendments. Scrap and resale values should not be considerably affected. Based on current listings, truck TRUs can be sold out– of–state for $6,450 to $10,000 and trailer TRUs can be sold out–of–state for $7,500 to $16,400, depending on the M Y and engine hours. Because the SRIA provides an upper bound estimate on costs, staff conservatively did not assume any cost savings associated with scrap and resale.

DOF Comment #2: The SRIA could be improved by including a more explicit discussion of the antic - ipated state revenues that would be generated by the proposed operating and facility registration fees that CARB proposes to collect from TRU owners. Fur - thermore, the SRIA notes an estimated $48 million in fee revenue would be collected over the lifetime of the regulation, yet CARB’s implementation and enforce - ment costs are estimated to be only $19.4 million. The SRIA should clarify how the remaining fee revenue would be utilized by CARB.

Response: Staff have updated the economic anal - ysis since the release of the SRIA on May 12, 2021. The changes include increasing the number of CARB staff needed to implement and enforce the Proposed Amendments and updating the salary amount used for the Staff Services Manager I position. These chang - es resulted in an increase of proposed TRU operating and applicable facility operating fees. In the SRIA, the TRU operating fee for a diesel TRU was $43, the TRU operating fee for a zero–emission TRU is $22, and the applicable facility registration fee is $43.

In the updat- ed proposal, the TRU operating fee for a diesel TRU is $54, the TRU operating fee for a zero–emission TRU is $27, and the applicable facility registration fee is $54. Staff also updated the analysis to account for additional costs to CARB, including the indirect labor cost and operational cost (e.g., compliance labels, en - velopes, and postage) expected as a result of the Pro - posed Amendments. More information on these costs can be found in Appendix G. As a result of the up - dates, staff estimate that CARB’s TRU program costs would be $47.1 million from 2022 to 2034.

Approxi - mately $60.8 million in fee revenue would be collected by CARB. The proposed fee amounts in the Proposed Amend - ments would not result in excess fee revenue. The difference in CARB’s TRU program costs compared to fee revenue is due to existing TRU program labor costs not associated with the Proposed Amendments and the required SRIA assumption of full compliance. To determine the fee amounts, staff accounted for non–compliance since it is reflective of actual condi - tions.

This results in a more accurate estimate of the number of TRUs and facilities that would comply with the fee requirements and the resulting fee revenue that CARB would collect. Staff used a non–compliance rate based on the average of non–reporting assumed in the statewide TRU inventory and the percentage of citations issued by CARB’s Enforcement Division for non–reporting violations in 2019 equal to approx - imately 13 percent. Because the economic analysis assumes full compliance, the estimated fee revenue collected over the lifetime of the regulation would be less than what is presented in the SRIA.

DOF Comment #3: The SRIA could be improved by including actual data for 2020 when it becomes available or using the most up–to–date data available. The current baseline assumption of significant turn -

CALIFORNIA REGULATORY NOTICE REGISTER 2021, VOLUME NUMBER 31-Z 971 over in 2020 results in nearly double the capital costs in 2027 ($120 million compared to an average of $65 million in all other years) because there are double the number of non–truck TRUs that need to take com - pliance actions in that year (around 40,000 in 2027 compared to an average of 20,000 in all other years). Updating the analysis would be helpful as the costs and benefits appear to be impacted significantly by the share of TRUs assumed to be non–compliant.

Alter - natively, the SRIA could include a separate scenario analysis with different assumptions on the share of non– compliant TRUs that need to come to compliance in 2020 to illustrate how impacts would vary if the share of non–compliant TRUs in 2020 were higher or lower than the 2018 rate. Response: For the SRIA, staff used the legal base - line of full compliance with existing regulations by assuming that all non–complying TRUs are replaced in 2020 as well as the most up–to–date data avail - able at the time of SRIA development.

Staff agree that costs and benefits are impacted by the number of TRUs assumed to be non–compliant and that the analysis should be based on the most up–to–date data available. As newer data becomes available, staff will consider updating the analysis or adding a sensitivi - ty analysis to determine how impacts would vary if the share of non–compliant TRUs in 2020 were higher or lower than the 2018 rate for inclusion in the Final Statement of Reasons. Business Report (Gov.

Code, §§ 11346.5, subd. (a) (11); 11346.3, subdivision (d)): In accordance with Government Code sections 11346.5, subdivisions (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 welfare of the people of the State of California. Cost Impacts on Representative Private Persons or Businesses (Gov. Code, § 11346.5, subdivision (a)(9)): In developing this regulatory proposal, staff evalu - ated the potential economic impacts on representative private persons or businesses.

The total direct cost for TRU and applicable facility owners to comply with the Proposed Amendments is estimated to be approx - imately $103.9 million per year for 13 years (from 2022 to 2034), or a total of approximately $1.35 billion and assumes that TRU and infrastructure purchases are amortized over a period of 5 years at 5 percent interest. The estimated annual recurring cost savings average $23.9 million per year. The total net cost of the Proposed Amendments from 2022 to 2034 is es - timated to be $1.04 billion, which is less than the ap - proximate $1.75 billion in expected monetized health benefits.

The methodology and full details for estimat- ing the cost impact to a typical business owning TRUs are provided in

Chapter X of the ISOR. The Proposed Amendments will not result in any direct costs on individuals. However, staff anticipate the Proposed Amendments will result in indirect costs to individuals to the extent that affected businesses pass compliance costs through to consumers of refrig- erated products. If the total direct cost of the Proposed Amendments is fully passed through to consumers, the cost per California household from total impact of the Proposed Amendments from 2022 to 2034 is estimated to be $78.35 per household with a yearly av- erage of $6.03. Effect on Small Business (Cal. Code Regs., title 1, § 4, subdivisions (

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

section 4, that the proposed regulatory action would affect small businesses. The methodology and full details for es - timating the cost impact to a small business owning TRUs are provided in

Chapter X of the ISOR. Consideration of Alternatives (Gov.

Code, § 11346.5, subdivision (a)(13)): Before taking final action on the proposed regula - tory action, the Board must determine that no reason - able alternative considered by the Board, or that has otherwise been identified and brought to the attention of the Board, would be more effective in carrying out the purpose for which the action is proposed, would be as effective and less burdensome to affected private persons than the proposed action, or would be more cost–effective to affected private persons and equally effective in implementing the statutory policy or other provisions of law.

Staff considered four alternatives to the Proposed Amendments. As explained in

Chapter XI of the ISOR, no alternative proposal was found to be less burden - some and equally effective in achieving the purposes of the Proposed Amendments in a manner that ensures full compliance with the authorizing law. Staff have not identified any reasonable alternatives that would lessen any adverse impact on small business.

STATE IMPLEMENTATION PLAN REVISION If adopted by the Board, CARB plans to submit the proposed regulatory action to the United States Envi - ronmental Protection Agency for approval as a revi - sion to the California State Implementation Plan (SIP) required by the federal Clean Air Act (CAA). The ad- opted regulatory action would be submitted as a SIP revision because it amends regulations intended to re- duce emissions of air pollutants in order to attain and maintain the National Ambient Air Quality Standards promulgated by U.S. EPA pursuant to the CAA.

CALIFORNIA REGULATORY NOTICE REGISTER 2021, VOLUME NUMBER 31-Z 972 ENVIRONMENTAL ANALYSIS CARB, as the lead agency for the Proposed Amend- ments, has prepared a draft supplemental environmen- tal analysis (Draft Supplemental EA) under its certified regulatory program (California Code of Regulations, title 17, sections 60000 through 60008) to comply with the requirements of the California Environmen - tal Quality Act (CEQA; Public Resources Code sec - tion 21080.5).

The Draft Supplemental EA concluded implementation of the Proposed Amendments, could result in: beneficial impacts to air quality, energy de - mand, GHG emissions and climate change; less than significant impacts to energy demand, hazards and hazardous materials, land use and planning, mineral resources, population and housing, public services, recreation, and wildfire; and potentially significant adverse impacts to aesthetics, agriculture and forest resources, air quality, biological resources, cultural resources, geology and soils, hazards and hazardous materials, hydrology and water quality, mineral re - sources, noise, transportation, and utilities and service systems.

The beneficial impacts are related to PM, NOx, and GHG emission reductions as well as de - creased use of diesel fuel. The potentially significant and unavoidable adverse impacts are primarily relat - ed to short–term, construction–related activities. This explains why some resource areas are identified above as having both less–than–significant impacts and po - tentially significant impacts.

The Draft Supplemental EA, included as Appendix D to the ISOR, is entitled “Draft Supplemental Environmental Analysis for the Proposed Amendments to the Airborne Toxic Control Measure for In–Use Diesel–Fueled Transport Refrig - eration Units (TRU) and TRU Generator Sets, and Fa- cilities Where TRUs Operate.” Written comments on the Draft Supplemental EA will be accepted during a 45–day public review period starting on July 30, 2021 and ending at 5:00 p.m. on September 13, 2021.

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 Clerks’ Office at cotb@ arb.ca.gov or (916) 322–5594 as soon as possible, but no later than ten business days before 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 nece - sidades de otro idioma, por favor llame a la oficina del Consejo al cotb@arb.ca.gov o (916) 322–5594 lo más pronto posible, pero no menos de 10 días de trabajo an- tes del día programado para la audiencia del Consejo. TTY/TDD/Personas que necesiten este servicio pue - den marcar el 711 para el Servicio de Retransmisión de Mensajes de California. AGENCY CONTACT PERSONS Inquiries concerning the substance of the pro - posed regulatory action may be directed to the agen - cy representative Lea Yamashita, Staff Air Pollu - tion Specialist, Freight Operations

Section at Lea. Yamashita@arb.ca.gov or (designated back–up contact) Cari Anderson, Chief, Freight Transport Branch at Cari. Anderson@arb.ca.gov. AVAILABILITY OF DOCUMENTS CARB staff has prepared a Staff Report: Initial Statement of Reasons (ISOR) for the proposed regula- tory action, which includes a

summary of the econom- ic and environmental impacts of the proposal. The report is entitled: “Staff Report: Initial Statements of Reasons — Public Hearing to Consider the Proposed Amendments to the Airborne Toxic Control Measure for In–Use Diesel–Fueled Transport Refrigeration Units (TRU) and TRU Generator Sets, and Facilities Where TRUs Operate.” 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, on July 27, 2021.

Please contact Chris Hopkins, Regula - tions Coordinator, at Chris.Hopkins@arb.ca.gov or (916) 445–9564 if you need physical copies of the doc- uments. Because of current travel, facility, and staff - ing restrictions, the California Air Resources Board’s offices have limited public access. Pursuant to Gov - ernment Code

section 11346.5, subdivision (b), upon request to the aforementioned Regulations Coordina - tor, physical copies would be obtained from the Public Information Office, California Air Resources Board, 1001 I Street, Visitors and Environmental Services Center, First Floor, Sacramento, California, 95814.

CALIFORNIA REGULATORY NOTICE REGISTER 2021, VOLUME NUMBER 31-Z 973 Further, the agency representative to whom non - substantive inquiries concerning the proposed ad - ministrative action may be directed is Chris Hopkins, Regulations Coordinator, (916) 445–9564. The Board staff has compiled a record for this rulemaking action, which includes all the information upon which the pro- posal is based. This material is available for inspection upon request to the contact persons. 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 vote on a resolution directing the Executive Officer to: make any proposed modified regulatory language that is sufficiently related to the originally proposed text that the public was adequately placed on notice and that the regulatory language as modified could result from the proposed regulatory action, and any additional sup - porting documents and information, available to the public for a period of at least 15 days; consider written comments submitted during this period; and make any further modifications as may be appropriate in light of the comments received available for further public comment.

The Board may also direct the Executive Officer to: evaluate all comments received during the public comment periods, including comments regard - ing the Draft Environmental Analysis, and prepare written responses to those comments; and present to the Board, at a subsequently scheduled public hearing, the final proposed regulatory language, staff’s written responses to comments on the Draft Environmental Analysis, along with the Final Environmental Analy - sis for action.

FINAL STATEMENT OF REASONS A VAILABILITY 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 https://ww2.arb.ca.gov/rulemaking/2021/tru2021. TITLE 16. CEMETERY AND FUNERAL BUREAU NOTICE OF PROPOSED REGULATORY ACTION CONCERNING

ARTICLE 3.5 ENDOWMENT CARE FUND UNITRUST DISTRIBUTION § 2334, ENDOWMENT CARE FUND CONVERSION APPLICATION § 2334.1, ENDOWMENT CARE FUND CONVERSION CONDITION § 2334.2, DENIAL OF ENDOWMENT CARE FUND CONVERSION APPLICATION § 2334.3, ABANDONMENT OF ENDOWMENT CARE FUND CONVERSION APPLICATION § 2334.4, REVERSION TO NET INCOME DISTRIBUTION METHOD § 2350, ENDOWMENT CARE FUND REPORTS NOTICE IS HEREBY GIVEN that the Cemetery and Funeral Bureau (Bureau) is proposing to take the rulemaking action described below under the heading Informative Digest/Policy Statement Overview.

Any person interested may present statements or arguments relevant to the action proposed in writing. Written comments, including those sent by mail, facsimile, or e–mail to the addresses listed under Contact Person in this Notice, must be received by the Bureau at its office by 5:00 p.m., Tuesday, September 14, 2021. PUBLIC HEARING AVAILABILITY The Bureau has not scheduled a public hearing on this proposed action.

The Bureau will, however, hold a hearing if it receives a written request for a public hearing from any interested person, or his or her au - thorized representative, no later than 15 days prior to the close of the written comment period. A VAILABILITY OF CHANGED OR MODIFIED TEXT The Bureau may, after considering all timely and relevant comments, adopt the proposed regulations substantially as described in this notice, or may mod - ify the proposed regulations if such modifications are sufficiently related to the original text.

With the ex - ception of technical or grammatical changes, the full text of any modified proposal will be available for 15 days prior to its adoption from the person designated

CALIFORNIA REGULATORY NOTICE REGISTER 2021, VOLUME NUMBER 31-Z 974 in this Notice as the contact person and will be mailed to those persons who submit written or oral testimony related to this proposal or who have requested notifi - cation of any changes to the proposal. AUTHORITY AND REFERENCE Pursuant to the authority vested by Business and Professions Code (BPC) sections 142, and 7606, and Government Code (GC)

section 11445.20, and to im - plement, interpret or make specific BPC sections 142, 7612.6, 7613.9, 7653.6, 7711.1, and Health and Safe - ty Code (HSC) sections 8726, 8726.1, 8726.2, 8731, 8733.5, 8736, 8738, 8738.1, 8740, 8751, 8751.1, and GC sections 11445.10 and 11445.20, the Bureau is consider- ing adding a new

Article 3.5 and title, adding sections 2334, 2334.1, 2334.2, 2334.3, 2334.4, and amending

section 2350 in

Article 5 of Division 23 (commencing with

section 2300) of Title 16 of the California Code of Regulations (CCR) as described in this Notice. INFORMATIVE DIGEST/POLICY STATEMENT OVERVIEW The death care industry transacts business with consumers at a time when they are emotionally vul - nerable. Protection of the public is mandated to be the highest priority for the Bureau in exercising its licens- ing, regulatory, and disciplinary functions.

The Bu - reau achieves its goal of consumer protection through the following primary methods: issuing and renewing licenses; overseeing funeral and cemetery trust funds; investigating complaints; conducting inspections; and disciplining licensees for violations of its laws and regulations. The Bureau licenses, regulates, and investigates complaints against 14 different licensure categories in California, totaling approximately 13,100 licensees.

These licensing categories include funeral establish - ments, funeral directors, embalmers, apprentice em - balmers, cemetery brokers, cemetery broker branch, cemetery broker additional, cemetery salespersons, cremated remains disposers, crematories, crematory managers, hydrolysis facilities, cemetery managers, and private, nonreligious cemeteries. Existing law requires each privately–owned cem - etery authority create an endowment care trust fund through a written trust agreement executed by their board of directors and requires them to deposit funds to the trust for each interment space they sell.

There are various types of interments cemeteries sell (graves, crypts, niches, and scattering of cremated remains on the cemetery’s property) and each type of interment has a minimum required deposit. The deposits ceme - teries make to endowment care trusts, along with the initial contribution required by HSC

section 8738.1, form what is known as the corpus of the trust. The law prohibits expenditure of the fund corpus. In 2017, the Legislature passed Assembly Bill (AB) 926 (Irwin,

Chapter 750, Statutes of 2017), requiring the Bureau to develop processes and functions nec - essary to facilitate and regulate the conversion of endowment care trust funds from the net income dis - tribution method to the unitrust distribution method (“unitrust method”) beginning January 1, 2020 (see HSC sections 8726.1, 8726.2). Under the net income distribution method, only the income and a portion of realized capital gains gener - ated from endowment care fund investments may be used for cemetery care and maintenance

whereas, the unitrust method allows expenditures based on the total net value of the endowment care fund assets. AB 926 capped the unitrust amount at 5 percent and capped trustee fees at 0.1 percent of the net fair market value of the endowment care fund as of the last trading day for each of the three preceding fiscal years. AB 926 further requires the Bureau to evaluate the effective - ness of the unitrust distribution method and to report its findings at its next two hearings before the Joint Sunset Review Oversight Hearings of the Assembly Committee on Business and Professions and Senate Committee on Business, Professions and Economic Development. In 2019, AB 795 (Irwin,

Chapter 309, Statutes of 2019) was passed amending the prior version of HSC

section 8726.2 enacted by AB 926 and delaying the implementation date to January 1, 2021. HSC

section 8726.2 now sets limits on trustee compensation that allows professional management of trust assets and prevents depletion of assets via excessive trustee fees. Additionally, HSC sections 8726.2 and 8726.3 place controls on excessive investment adviser fees that could unduly deplete a fund and limits the ability of private creditors to seize trust fund assets. HSC sec - tion 8726.3 also makes clear that, in the event of a sei- zure by a public entity, trust fund assets can only be used for care, maintenance, and embellishment of the cemetery for which the funds were originally put in trust. Significantly, HSC

section 8726.2 authorizes a cemetery authority to apply to the Bureau to convert from the net income distribution method to the uni - trust method and provides the Bureau with authority to review and evaluate information provided by the applicant (cemetery authority, board of trustees or corporate trustee) to determine whether the cemetery authority meets

Section 8726.2’s conditions for ap - proval, including the provision of “relevant trust doc - uments.” In addition, subdivision (

f) of that

section au- thorizes the Bureau to adopt rules to administer HSC

section 8726.2 and ensure compliance, including, but

CALIFORNIA REGULATORY NOTICE REGISTER 2021, VOLUME NUMBER 31-Z 975 not limited to, reporting requirements for cemetery authorities. There are no existing regulations that specify the processes and procedures for how a cemetery authority applicant may apply to the Bureau to convert from the net income distribution method to the unitrust distri - bution method as authorized by

Section 8726.2 of the Health and Safety Code. Further, there are no regula - tions that specify how a cemetery authority may main- tain such approval, report any updated or changed in - formation, and the processes and procedures for denial of approval or reversion to the net income distribution method in the event that specified conditions are not met. This proposal would establish such regulations.

The Bureau has drafted proposed text to specify: (1) the processes and procedures for applying for and re - ceiving approval from the Bureau to convert from a net income distribution method to a unitrust distribu - tion method, including the provision of a completed application form “Unitrust Conversion Application”, (2) the grounds for denying a unitrust conversion ap - plication, (3) the circumstances under which a unitrust conversion application will be deemed abandoned, (4) the process for reverting to a net income distribution method from a unitrust method; and, (5) the process for providing any “created, updated, or changed” in - formation to the Bureau in the cemetery authority’s annual report.

The Bureau has consulted with stakeholders (licens- ees, consumer advocates, and members of the public) regarding the proposed unitrust distribution method regulations. The Bureau held a stakeholder workshop on June 21, 2021 and discussed and made available for public comment the draft language and application for endowment care fund conversion. Based on stakehold- er comments, the Bureau revised the proposed lan - guage to address stakeholders’ concerns. The revised proposed language is included with this proposal.

In addition to the aforementioned authority in Sec - tion 8726.2 of the Health and Safety Code, BPC sec - tion 7606 authorizes the Bureau to adopt, amend, or repeal such rules and regulations as may be reason - ably necessary to enable it to carry into effect the pro- visions of the Cemetery and Funeral Act (Act). The Bureau proposes to: ● Add a new

Article 3.5, and Title, “Endowment Care Fund Unitrust Distribution” and Sections 2334, 2334.1, 2334.2, 2334.3, 2334.4, and Amend

Section 2350 in

Article 5 of Division 23 of Title 16 of the California Code of Regulations. ● Adopt CCR

section 2334, Unitrust Conversion Application The Bureau proposes to adopt a regulation setting forth the timeframe, required contents of, and docu - ments required to be submitted with a “Unitrust Con - version Application,” and incorporates the form by reference. The proposal would also provide a process for applicants to use when relevant trust documents are not available, allow the Bureau discretion to con - dition approval on the applicant’s provision of the relevant trust documents within a certain timeframe and revoke the conditional approval, after notice and potential hearing, as provided in

Section 2334.2. The proposal would also require a completed application be submitted at least 90 days prior to the beginning of the cemetery authority’s reporting year for which the conversion is requested. ● Adopt CCR

section 2334.1, Approval of Endowment Care Fund Conversion The Bureau proposes to adopt a regulation to es - tablish the requirement for cemeteries to obtain prior approval for, and specify the timing of, the endow - ment care fund conversion to the unitrust distribution method ● Adopt CCR

section 2334.2, Denial of Unitrust Conversion Application The Bureau proposes to adopt a regulation to estab- lish the denial, written notice and appeal process for the endowment care fund conversion to the unitrust distribution method, including opportunities for an in- formal office conference and informal hearing. ● Adopt CCR

section 2334.3, Abandonment of Unitrust Application The Bureau proposes to adopt a regulation to estab- lish the abandonment date for unitrust conversion ap - plications that are returned as incomplete. In addition, this

section provides that an applicant who abandons an application must submit a new application and doc- uments to obtain the Bureau’s approval. ● Adopt CCR

section 2334.4, Reversion to Net Income Distribution Method The Bureau proposes to adopt a regulation to estab- lish the process for requiring a cemetery authority to revert an endowment care fund to the net income dis - tribution method, including options for the effective date of reversion. The proposal would set standards for notifying the cemetery authority of the require - ment to revert and specifies what the Bureau deter - mines is “satisfactory proof” of reversion, as well as the response date for providing the Bureau such proof.

The proposal would establish that it constitutes unpro- fessional conduct to fail to comply with the Bureau’s notice requiring the cemetery authority to revert, or to refuse to provide the “satisfactory proof” of rever - sion as specified by this section. Finally, the proposal would specify that a cemetery authority that has re - verted to net income distribution and seeks to recon - vert its endowment care fund to the unitrust method shall submit a new application and receive Bureau ap- proval prior to conversion.

CALIFORNIA REGULATORY NOTICE REGISTER 2021, VOLUME NUMBER 31-Z 976 ● Amend CCR

section 2350, Endowment Care Fund Reports Existing law addresses the annual report required pursuant to BPC

section 7612.6(b). The Bureau proposes to amend the regulation to separate it into two subdivisions to clarify existing regulatory language. Proposed changes to subdivision (

a) correct the terminology and citations of the existing regulation which pertains to the annual report require- ments pursuant to BPC

section 7612.6(

b) and proposes other technical and grammatical clean–up to this Sec - tion to improve readability. It also adds a requirement for the audit report to be “signed” by a licensed inde - pendent certified public accountant or public accoun - tant and adds text to clarify that the report must fully and accurately disclose the “financial” position of the endowment care fund. It strikes references to the re - quirement of rendering an “independent” opinion and replaces it with an “unmodified” opinion requirement. This proposal adds a new subdivision (

b) that lists the additional information that must be provided with the endowment care fund report when the cemetery authority is using the unitrust distribution method including any information that has been created, up - dated or changed since the Bureau’s approval. It also replaces outdated code BPC

section 9650(

c) with BPC

section 7612.6(

b) in the text and the Authority and Reference section. ANTICIPATED BENEFITS OF PROPOSED REGULATIONS This regulatory proposal would establish: (1) a con- sistent and straightforward process for obtaining Bu - reau approval to convert to the unitrust distribution method, (2) the grounds for denying a unitrust conver- sion application, (3) the circumstances under which a unitrust conversion application will be deemed aban - doned, (4) the process for reverting to a net income distribution method from a unitrust method; and, (5) the process for providing any “created, updated, or changed” information to the Bureau in the cemetery authority’s annual report.

Section 2334 will help eliminate confusion for li - censed cemetery authorities and the public regarding the application and documentation requirements, pro - cedures, and timelines for seeking the Bureau’s ap - proval to convert an endowment care fund from the net income distribution method to the unitrust distri - bution method. The information collected from the application and the accompanying documents enables the Bureau to properly evaluate the application and de- termine the cemetery authority meets the conditions of approval set forth in HSC

section 8726.2(b). This will help ensure that only qualified cemetery author - ities are able to use the unitrust income distribution method, and therefore helps ensure the licensee’s on - going care and future maintenance of the cemetery for the benefit of the public in general. The proposed adoption of

section 2334.1 will pro - vide notice and clarity to licensed cemetery author - ities and the public of the requirement to receive the Bureau’s approval before converting to the unitrust distribution method and notifies them of the effective date of the conversion. The proposed adoption of

section 2334.2 will in - form licensed cemetery authorities and the public of the denial process for unitrust conversion applications. In addition, it provides an opportunity for the appli - cant to submit additional documentation and informa- tion which the applicant believes supports a reversal of the denial resulting in the approval of the application. Its establishment of an appeal process will ensure due process is provided to applicants. The proposed adoption of

section 2334.3 will pro - vide transparency and clarity to cemetery authorities and the public of the date for abandonment of the ap - plication. The 12–month limit will encourage appli - cants to submit documentation necessary to complete the application and to obtain the Bureau’s approval in a timely manner. The proposed adoption of

section 2334.4(

a) through (

e) provides straightforward and uniform procedures and instruction to cemetery authorities and the pub - lic of the requirements, procedures, and timeframes applicable to the reversion process. It will provide that a failure to comply with the Bureau’s direction to revert to the net income distribution method will subject cemetery authorities to disciplinary action for unprofessional conduct.

Since the size of the endow - ment care fund when the cemetery is sold out is the dominant factor in determining how much income can be produced to meet the needs of cemeteries, pro- tection of principal through reversion will ensure that cemeteries have adequate funds now and in the future so that they do not fall into disrepair. The proposed amendment of

section 2350 clarifies the annual reporting requirements for cemetery au - thorities who have been approved to convert to the unitrust method. This new requirement provides a simplified and efficient method for the Bureau to meet

section 8726.2(e)’s review requirement. It also pro - vides a less costly alternative for the cemetery author- ity to report updated or new information to the Bureau rather than requiring the filing of a separate report or notice with the Bureau. The proposed amendments also eliminate confusion regarding those requirements by replacing an outdated code reference and updating other provisions consistent with BPC

section 7612.6.

CALIFORNIA REGULATORY NOTICE REGISTER 2021, VOLUME NUMBER 31-Z 977 DETERMINATION OF INCONSISTENCY/ INCOMPATIBILITY WITH EXISTING REGULATION(

S) During the process of developing these regulations and amendments, the Bureau has conducted a search of any similar regulations of these topics and has con- cluded that these regulations are neither inconsistent nor incompatible with existing state regulations. INCORPORATION BY REFERENCE Unitrust Conversion Application, form 23–UCA (New 7/21) DISCLOSURES REGARDING PROPOSED ACTION FISCAL IMPACT ESTIMATES Fiscal Impact on Public Agencies Including Costs or Savings to State Agencies: The proposed regulations are not anticipated to in - crease workload or costs to the state.

Current law requires the Bureau to implement and oversee an application process to convert an endow - ment care fund from a net distribution method to a unitrust distribution method. Any workload and costs of implementation are a result of current law. Cost or Savings in Federal Funding to the State: None. Nondiscretionary Costs/Savings to Local Agencies: None. Local Mandate: None. Cost to Any Local Agency or School District for Which Government Code Sections 17500–17630 Require Reimbursement: None.

Business Impact: The Bureau has made an initial determination that the proposed regulatory action would not have a sig - nificant statewide adverse economic impact directly affecting businesses, including the ability of Califor - nia businesses to compete with businesses in other states.

This initial determination is based on the fol - lowing facts: ● The Bureau has determined that the only types of businesses that may be affected are licensed cemetery authorities seeking the Bureau’s approval to convert their endowment care trust fund from the net income distribution method to the unitrust distribution method. ● As of July 2020, the Bureau licenses 194 endowment care cemeteries, which are all projected to apply for the unitrust distribution method in the first year. Of the 194, the Bureau anticipates 96 licensees will qualify for the unitrust distribution method.

Given that the licensee population is only 194, and not all will meet the conditions of approval, the Bureau has determined that the number of licensees is insufficient to create a statewide adverse economic impact. ● These proposed regulations would provide licensed cemeteries with an additional business structure option consistent with current law.

The regulation does not require licensed cemeteries to convert to or to be established using the unitrust distribution method. ● Opting to utilize the unitrust distribution method is a voluntary business decision made by the cemetery and therefore, any business impact is a result of this choice and not the regulations. ● Existing law requires licensed cemetery authorities to annually submit an endowment care fund report. The Bureau is requesting additional documents and/or information to aid in its evaluation of the effectiveness of the unitrust distribution method.

The additional documents and/or information add to the existing reporting requirements, which would not add additional cost to the cemetery authorities because the cemetery already keeps records of this information and this proposal would not require a separate report to be filed. Business Reporting Requirement The proposed regulations impose additional report - ing, recordkeeping, or other compliance requirements: BPC

section 7612.6(

b) addresses the cemetery au - thority annual report requirements. Proposed amendments to

Section 2350 would re - quire additional information to be included in that report for cemetery authorities who elect to convert to the unitrust method and who have information that was created, updated or changed since the cemetery authority was approved to convert by the Bureau. Health and Safety Code

section 8726.2(e)(1) requires the Bureau to review on an annual basis whether a cemetery authority continues to meet the conditions of approval for use of the unitrust method. The Bu - reau has determined that it is necessary for the health, safety, or welfare of the people of the state that the regulation apply to businesses. Adding reporting re - quirements and/or information to the existing regula - tion will aid the Bureau in its annual evaluation that will demonstrate the cemetery authority continues to meet the conditions of approval, which helps ensure sufficient oversight over the administration of the en - dowment care fund.

CALIFORNIA REGULATORY NOTICE REGISTER 2021, VOLUME NUMBER 31-Z 978 Cost Impact on Representative Private Person or Business: The Bureau 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. There is no cost for the cemetery author- ity to apply for the Bureau’s approval to convert from the net income distribution method to the unitrust dis- tribution method. Effect on Housing Costs: None.

EFFECT ON SMALL BUSINESS The Bureau has determined that the proposed reg - ulations does not affect small businesses because this proposed regulation only applies to licensed cemetery authorities seeking the Bureau’s approval to convert the endowment care fund to the unitrust distribution method. These proposed regulations would provide licensed cemeteries with an additional business struc - ture option consistent with current law. The option is not expected to result in any additional operating costs to cemeteries choosing to use the unitrust distribution method.

The regulation does not require licensed cem- eteries to convert to the unitrust distribution method. RESULTS OF ECONOMIC IMPACT ASSESSMENT/ANALYSIS Impact on Jobs/Businesses: As explained further below, the Bureau has deter - mined that this regulatory proposal will not create or eliminate jobs, will not create new business or elimi - nate existing businesses, and will not affect the expan- sion of businesses currently doing business within the State of California.

As of July 2020, the Bureau currently licenses 194 endowment care cemeteries, which are all projected to apply for the unitrust distribution method in the first year. Of the 194, the Bureau anticipates 96 licensees will qualify for the unitrust distribution method. The Bureau expects at least half of all licensees annually will remain utilizing the unitrust distribution method.

The Bureau has determined that this regulatory pro- posal will have the following effects: ● It will not create or eliminate jobs in the State of California because this proposed regulation applies to the licensed cemetery authorities seeking the Bureau’s approval to convert the endowment care fund to the unitrust distribution method. These proposed regulations would provide licensed cemeteries with an additional business structure option consistent with current law.

The regulation does not require licensed cemeteries to convert to or to be established using the unitrust distribution method. ● It will not create new businesses within the State of California because the proposed regulations would only allow existing licensed cemetery authorities to apply for the Bureau’s approval to convert to the unitrust distribution method. The proposed regulation does not negatively impact the existing cemetery industry.

The regulation does not require licensed cemeteries to convert to or to be established using the unitrust distribution method ● It will not expand or eliminate existing business because this regulation applies to the existing licensed cemetery authorities in California. The proposed regulations are only applicable to cemeteries that are already licensed by the Bureau and provides the cemetery with the business option to expend funds, which may be available to the cemetery under the unitrust distribution method.

The regulation proposal does not require licensed cemeteries to convert to or to be established using the unitrust distribution method. ● This regulatory proposal will not affect the health and welfare of California residents because the regulations are aimed toward licensed cemetery authorities seeking the Bureau’s approval to convert the endowment care fund to the unitrust distribution method. ● This regulatory proposal may positively affect worker safety if a sufficient endowment care fund is maintained by the cemetery that would allow the cemetery to expend funds to repair surfaces and ensure the property is kept in a condition so as to prevent a hazard to the worker. ● This regulatory proposal may positively affect the state’s environment if a sufficient endowment care fund is maintained over the life expectancy of the cemetery, which may enhance the condition of the cemetery grounds, thus making a positive impact on the environment.

INITIAL STATEMENT OF REASONS AND INFORMATION The Bureau has prepared an initial statement of the reasons for the proposed action and has available all the information upon which the proposal is based. TEXT OF PROPOSAL Copies of the exact language of the proposed regu - lations, and any document incorporated by reference, and of the initial statement of reasons, and all of the

CALIFORNIA REGULATORY NOTICE REGISTER 2021, VOLUME NUMBER 31-Z 979 information upon which the proposal is based, may be obtained upon request from the Bureau at 1625 North Market Boulevard, Suite S–208, Sacramento, Califor- nia 95834. A VAILABILITY AND LOCATION OF THE FINAL STATEMENT OF REASONS AND RULEMAKING FILE All the information upon which the proposed reg - ulations are based is contained in the rulemaking file that is available for public inspection by contacting the person named below.

You may obtain a copy of the final statement of rea- sons once it has been prepared, by making a written request to the Contact Person named below or by ac - cessing the website listed below.

CONSIDERATION OF ALTERNATIVES The Bureau must determine that no reasonable al - ternative it considered to the regulation 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 effec - tive and less burdensome to affected private persons than the proposal described in this Notice, or would be more cost–effective to affected private persons and equally effective in implementing the statutory policy or other provision of law.

Set forth below are the alternatives that were con - sidered and the reason the alternative was rejected or adopted: Alternative 1: Maintain the status quo. This alternative was rejected because it would make the Bureau non–compliant with the statutory mandates of Health and Safety Code

section 8726.2. Alternative 2: Adopt new regulations and amend existing regulatory sections. This alternative was accepted as the most compliant and administratively consistent option for the Bureau to evaluate the application to grant approval to licensed cemetery authorities seeking the Bureau’s approval to convert the endowment care fund to the unitrust distribution method, in order to comply with

Section 8726.2 of the Health and Safety Code, which mandates the Bureau allow application for conversion to the unitrust distribution method by a cemetery authority, its board of trustees or its corporate trustee by January 1, 2021. Any interested person may submit comments to the Bureau in writing relevant to the above determinations at 1625 North Market Blvd., Suite S–208, Sacramento, California 95834.

CONTACT PERSON Inquiries or comments concerning the proposed ad - ministrative action may be addressed to: Name: Carolina Sammons Address: 1625 North Market Boulevard, Suite S–208 Sacramento, CA 95834 Telephone No.: (916) 574–7876 Fax No.: (916) 928–7988 Email Address: carolina.sammons@dca.ca.gov The backup contact person is: Name: Cheryl Jenkins Address: 1625 North Market Boulevard, Suite S–208 Sacramento, CA 95834 Telephone No.: (916) 574–8203 Fax No.: (916) 928–7988 Email Address: cheryl.jenkins@dca.ca.gov Inquiries concerning the substance of the proposed regulations may be directed to Carolina Sammons at (916) 574–7876.

Website access: Materials regarding this proposal can be found at https://www.cfb.ca.gov/laws_regs/ proposed_regs.shtml. TITLE 16. BOARD OF ACCOUNTANCY NOTICE OF PROPOSED REGULATORY ACTION CONCERNING: SALE, TRANSFER, OR DISCONTINUANCE OF LICENSEE’S PRACTIC E NOTICE IS HEREBY GIVEN that the California Board of Accountancy (CBA) is proposing to take the action described in the Informative Digest.

Any per - son interested may present statements or arguments orally or in writing relevant to the action proposed at a hearing to be held at: California Board of Accountancy 2450 Venture Oaks Way, Suite 420 Sacramento, CA 95833 September 16, 2021 10:00 a.m. Written comments, including those sent by mail, facsimile, or e–mail to the addresses listed under Contact Person in this Notice, must be received by the CBA at its office no later than 5:00 p.m. on Tuesday, September 14, 2021, or must be received by the CBA at the hearing.

The CBA, upon its own motion or at the request of any interested party, may thereafter adopt the proposals substantially as described below or may

CALIFORNIA REGULATORY NOTICE REGISTER 2021, VOLUME NUMBER 31-Z 980 modify such proposals if such modifications are suffi- ciently related to the original text. With the exception of technical or grammatical changes, the full text of any modified proposal will be available for 15 days prior to its adoption from the person designated in this Notice as contact person and will be mailed to those persons who submit written or oral testimony related to this proposal or who have requested notification of any changes to the proposal.

Authority and Reference: Pursuant to the authority vested by Sections 5010, 5018 and 5063.3 of the Busi- ness and Professions Code (BPC), and to implement, interpret or make specific sections 5018 and 5063.3 of said Code and Civil Code

section 1798.81, the CBA is considering adding

section 54.3 and 54.4 to Division 1 of Title 16 of the California Code of Regulations 1 (CCR) as follows: INFORMATIVE DIGEST A. Informative Digest BPC

section 5018 authorizes the CBA to adopt reg- ulations to prescribe or amend rules of professional conduct appropriate to the establishment and mainte - nance of a high standard of integrity and dignity in the profession. Existing law, BPC

section 5063.3, prohibits licens - ees from disclosing a client or prospective client’s confidential information, except under certain speci - fied circumstances. Existing CBA regulation,

section 54, defines confidential information and indicates that it includes all information obtained by a licensee in their professional capacity regarding a client or pro - spective client, except information obtained from a prospective client who does not subsequently become a client, as long as certain conditions are met. Existing CBA regulation, CCR

section 54.1, states that licens - ees are generally prohibited from disclosing a client or potential client’s confidential information, except in specified circumstances. BPC sections 5063.3 and CCR

section 54.1 generally permit disclosures of con- fidential client information in connection with the sale or merger of a business. Existing law, BPC

section 5018, requires licensees to adhere to the rules and standards of professional conduct adopted by the CBA, which are set forth in Title 16, Division 1,

Article 9, of the CCR. Existing regulation, CCR

section 58, requires licensees to com- ply with all applicable professional standards, which includes the Code of Professional Conduct developed by the American Institute of Certified Public Accoun- 1 All California Code of Regulations references are to title 16, unless otherwise indicated. tants2 (AICPA) [“Licensees engaged in the practice of public accountancy shall comply with all applicable professional standards”]. The Code of Professional Conduct is a set of principles, rules and

interpretations that guides Certified Public Accountants (CPAs) in the performance of their professional responsibilities. Existing law, BPC

section 5097, governs a licensee’s maintenance of audit documentation. Existing law, Civil Code

section 1798.81 governs the appropriate destruction of customer records. In October 2016, the AICPA Professional Ethics Ex- ecutive Committee’s (PEEC) adopted new and revised

interpretations (Interpretations) of the AICPA Code of Professional Conduct. As indicated above, pursu - ant to CCR

section 58, the CBA requires its licensees to comply with all applicable professional standards, including the Code of Professional Conduct developed by the AICPA. The CBA ’s proposal would add two new sections to

Article 9 of Division 1 of Title 16 to address new In - terpretation 1.400.205 (Transfer of Files and Return of Client Records in Sale, Transfer, Discontinuance or Acquisition of a Practice) and revised Interpreta - tion 1.700.050 (Disclosing Client Information in Con- nection With a Review or Acquisition of Member’s Practice). CCR

section 54.3 would address the sale or transfer of all or part of a licensee’s practice to a suc - cessor licensee and CCR

section 54.4 would address notification to clients when a licensee’s practice is discontinued without a sale or transfer of the practice to a successor licensee. Both sections would establish requirements to ensure licensees are handling client records appropriately. Specifically, this proposal would do the following:

Section 54.3 This proposed

section specifies various steps a licensee would be required to take regarding notify - ing clients when selling or transferring all or part of the licensee’s practice, the circumstances under which the licensee would be permitted to transfer client files to the successor licensee, the documents the licens - ee would be required to retain and how long to retain them.

Section 54.4 This proposed

section would establish requirements that licensees must follow when discontinuing their practice without a sale or transfer of the practice to a successor licensee, including providing written notice to the client, returning records to the client, what to do if the licensee is unable to return the client’s records, and proper manner of disposing client records. 2 The AICPA is the world’s largest member association represent- ing the accounting profession with a history of serving the public interest since 1887. It sets ethical standards for the accounting profession and U.S. auditing standards for private companies, nonprofit organizations, and federal, state and local governments.

CALIFORNIA REGULATORY NOTICE REGISTER 2021, VOLUME NUMBER 31-Z 981 B. Policy Statement Overview/Anticipated Benefits of Proposal This regulatory proposal would establish require - ments for licensees to follow when selling, transfer - ring, or discontinuing their practice and provides guid- ance regarding the proper disposal of client records. The CBA anticipates that the proposed regulations would benefit licensees by providing them with clear direction for notifying clients and appropriately han - dling client records when selling, transferring or dis - continuing their accountancy practice.

The CBA also anticipates that this proposal would benefit consumers by ensuring that clients are notified when a licensee sells, transfers, or discontinues their practice and pro - vides an opportunity for the client to obtain their re - cords. It would also ensure the confidentiality of client records by establishing requirements for licensees to follow when transferring them to a successor licensee or properly disposing of them.

Consistency and Compatibility with Existing State Regulations During the process of developing these regulations and amendments, the CBA has conducted a search of any similar regulations on this topic and has conclud - ed that these regulations are neither inconsistent nor incompatible with existing state regulations. INCORPORATION BY REFERENCE None. FISCAL IMPACT ESTIMATES Fiscal Impact on Public Agencies Including Costs or Savings to State Agencies or Costs/Savings in Federal Funding to the State: The CBA does not anticipate additional workload or costs resulting from the proposed regulations.

The CBA would ensure compliance with the pro - posed regulation through enforcement and investiga - tion measures, which would typically be conducted in response to a consumer complaint related to the cli - ent’s inability to receive their records or files. Howev- er, the CBA notes over the past two years it received 4,751 total complaints (2,134 in 2018–19 and 2617 in 2019–20) of which zero percent were related to viola- tions of the proposed regulations. As a result, no addi- tional workload or costs are anticipated. Nondiscretionary Costs/Savings to Local Agencies: None. Local Mandate: None.

Cost to Any Local Agency or School District for Which Government Code Sections 17500–17630 Require Reimbursement: None. Economic Impact: The regulations will require licensees to notify clients of the sale or transfer of the practice via first class mail, which would result in costs of $0.55 (do - mestic) and $1.20 (international) per notification.

The CBA cannot provide an estimate of the total future costs related to notifying clients because the number of notifications would depend on unknown variables including: 1) the number of future sale or transfers of practices, and 2) the number and location of clients impacted. Licensees would also be required to either transfer client files to the successor licensee or to the client, as specified, or retain the files, as specified. Because any client file transfer and/or retention costs would also depend on these same unknown variables, the CBA cannot provide an estimate of these transfer or reten - tion costs.

However, the CBA notes most client files are typi - cally retained by the licensee in digital format and any transfer or retention of these files would occur digital- ly, which would not likely result in additional costs. The CBA further notes a typical licensee opting to sell or transfer their practice would likely be averse to significant file transfer or retention costs. As a result, these individuals would probably choose to digitize any files as part of their normal course of business and complete the digitizing of files prior to the sale or transfer to eliminate these potential costs.

Business Impact: The CBA has made an initial determi