Time- Dated Material GAVIN NEWSOM, GOVERNOR OFFICE OF ADMINISTRATIVE LAW California Regulatory Notice Register REGISTER 2022, NUMBER 46-Z PUBLISHED WEEKLY BY THE OFFICE OF ADMINISTRATIVE LAW NOVEMBER 18, 2022 PROPOSED ACTION ON REGULATIONS TITLE 2.

FAIR POLITICAL PRACTICES COMMISSION Conflict–of–Interest Codes — Notice File Number Z2022–1108–05 ....................................... 1363 AMENDMENT MULTI–COUNTY: Dublin San Ramon Services District Midpeninsula Regional Open Space District San Bernardino Community College District Sierra Joint Community College District STATE AGENCY: Government Operations Agency Workforce Development Board ADOPTION MULTI-COUNTY: Cosumnes Groundwater Authority TITLE 2. GOVERNMENT OPERATIONS AGENCY Conflict–of–Interest Code — Notice File Number Z2022–1108–04 ........................................ 1364 TITLE 3.

DEPARTMENT OF PESTICIDE REGULATION Health Risk Mitigation and Volatile Organic Compound Emission Reduction for 1,3–Dichloropropene — Notice File Number Z2022–1101–02 ............................................ 1364 TITLE 4. GAMBLING CONTROL COMMISSION Subpoenas — Notice File Number Z2022–1107–01 .................................................... 1369 TITLE 4. POLLUTION CONTROL FINANCING AUTHORITY California Pollution Control Financing Authority Bond Program, Small Business Assistance Fund Fee Waiver — Notice File Number Z2022–1108–02 ............................................... 1373 TITLE 16.

BOARD OF ACCOUNTANCY Sale, Transfer, or Discontinuance of Licensee’ s Practice — Notice File Number Z2022–1108–01 ................ 1376 (Continued on next page)

TITLE 18. DEPARTMENT OF TAX AND FEE ADMINISTRATION Registration, Reporting, and Reimbursement — Notice File Number Z2022–1107–03 ......................... 1379 TITLE 18. DEPARTMENT OF TAX AND FEE ADMINISTRATION Marketplace Sales — Notice File Number Z2022–1108–03 .............................................. 1390 TITLE 22. DEPARTMENT OF SOCIAL SERVICES Conflict–of–Interest Code — Notice File Number Z2022–1102–01 ...................................... 1398

SUMMARY OF REGULATORY ACTIONS Regulations filed with the Secretary of State ......................................................... 1398 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 https://oal.ca.gov .

CALIFORNIA REGULATORY NOTICE REGISTER 2022, VOLUME NUMBER 46-Z 1363 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: Dublin San Ramon Services District Midpeninsula Regional Open Space District San Bernardino Community College District Sierra Joint Community College District STATE AGENCY: Government Operations Agency Workforce Development Board ADOPTION MULTI–COUNTY: Cosumnes Groundwater Authority A written comment period has been established commencing on November 18, 2022 and closing on January 3, 2023.

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

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

Section 87302, employees who must disclose 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 comments must be received no later than January 3, 2023. 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 2022, VOLUME NUMBER 46-Z 1364 CONTACT Any inquiries concerning the proposed conflict– of–interest code(

s) should be made to Daniel Vo, Fair Political Practices Commission, 1102 Q Street, Suite 3000, Sacramento, California 95811, telephone (916) 322–5660. AVAILABILITY OF PROPOSED CONFLICT–OF–INTEREST CODES Copies of the proposed conflict–of–interest codes may be obtained from the Commission offices or the respective agency. Requests for copies from 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 2.

GOVERNMENT OPERATIONS AGENCY AMEND THE CONFLICT–OF–INTEREST CODE OF THE GOVERNMENT OPERATIONS AGENCY NOTICE IS HEREBY GIVEN that the Govern- ment Operations Agency, pursuant to the authority vested in it by

section 87306 of the Government Code, proposes amendment to its conflict–of–interest code. A comment period has been established commenc - ing on November 18, 2022, and closing on January 3, 2023. All inquiries should be directed to the contact listed below. The Government Operations Agency proposes to amend its conflict–of–interest code to include employ- ee positions that involve the making or participation in the making of decisions that may foreseeably have a material effect on any financial interest, as set forth in subdivision (

a) of

section 87302 of the Government Code. The amendment carries out the purposes of the law and no other alternative would do so and be less burdensome to affected persons.

Changes to the conflict–of–interest code include: the addition of new positions, including Chief Admin- istrative Officer, Chief Equity Officer, Chief Privacy Officer, Senior Advisor, Special Advisor, and Lan- guage Access Manager; the retitling of several posi - tions, including Chief Counsel, Information Officer, Staff Services Manager II, and Staff Services Manager I; the abolition of an obsolete position, the Director of Performance Improvement; and also makes other technical and grammatical changes. The proposed amendment and explanation of the reasons can be obtained from the agency’s contact.

Any interested person may submit written com - ments relating to the proposed amendment by submit- ting them no later than January 3, 2023, or at the con - clusion of the public hearing, if requested, whichever comes later. At this time, no public hearing is sched - uled. A person may request a hearing no later than December 9, 2022. The Government Operations Agency has deter - mined that the proposed amendments: 1. Impose no mandate on local agencies or school districts. 2. Impose no costs or savings on any state agency. 3.

Impose no costs on any local agency or school district that are required to be reimbursed un - der

Part 7 (commencing with

Section 17500) of Division 4 of Title 2 of the Government Code. 4. Will not result in any nondiscretionary costs or savings to local agencies. 5. Will not result in any costs or savings in federal funding to the state. 6. Will not have any potential cost impact on private persons, businesses or small businesses. All inquiries concerning this proposed amendment and any communication required by this notice should be directed to: Michael Palmisano, Assistant Gener - al Counsel, Government Operations Agency, (916) 938–0813. TITLE 3.

DEPARTMENT OF PESTICIDE REGULATION HEALTH RISK MITIGATION AND VOLATILE ORGANIC COMPOUND EMISSION REDUCTION FOR 1,3–DICHLOROPROPENE DPR REGULATION NUMBER 22–005 PROPOSED OZONE STATE IMPLEMENTATION PLAN AMENDMENT REGARDING PESTICIDE EMISSIONS IN THE SACRAMENTO METRO, SAN JOAQUIN VALLEY, SOUTH COAST, SOUTHEAST DESERT, AND VENTURA NONATTAINMENT AREAS The Department of Pesticide Regulation (DPR) proposes to adopt sections 6448.3 and 6448.4; amend sections 6448, 6449.1, 6452, 6452.2, 6624, 6626, and 6881; and adopt new

section 6448.1, and renumber and amend previous

section 6448.1 as

section 6448.2 of Title 3, California Code of Regulations. In

summary, the proposed action will restrict the use of 1,3–dichlo- ropropene (1,3–

D) to mitigate the potential 72–hour

CALIFORNIA REGULATORY NOTICE REGISTER 2022, VOLUME NUMBER 46-Z 1365 acute risk and 70–year lifetime cancer risk to non–oc- cupational bystanders. The proposed mitigation mea - sures will also further reduce the emissions of 1,3–D as a volatile organic compound (VOC).

The proposed action will allow the use of 1,3–D only for the produc- tion of agricultural commodities, effectively prohib- iting other uses that are not currently registered; es - tablish mandatory setbacks (distances from occupied structures where 1,3–D cannot be applied); set limits on the application rate and acres treated for individu - al field soil fumigations; place restrictions on multiple field soil fumigations that do not meet distance or time separation criteria; limit the allowed methods to apply 1,3–D, including establishing criteria for acceptable types of tarpaulins that can be used; require an annual report from DPR that includes evaluations of 1,3–D use and air monitoring results; and require the inclu - sion of certain information in existing pesticide use records and pesticide use reports.

DPR also proposes to incorporate “1,3–Dichloropropene Field Fumiga - tion Requirements, Est. January 1, 2024” by reference in proposed sections 6448, 6448.2, 6624, and 6626. A copy of this document is included in the rulemaking file and is available upon request. DPR will conduct a public hearing to accept com- ments on these amendments that may become part of the ozone state implementation plan (SIP). The federal Clean Air Act requires each state with nonattainment areas to submit a SIP for achieving and maintaining federal ambient air quality standards for ozone.

Cal - ifornia’s SIP contains an element to reduce pesticidal sources of VOCs. These proposed regulations amend and add to regulations that were previously submitted to the U.S. Environmental Protection Agency (U.S. EPA) to support commitments made in the 2022 State Strategy for the SIP. Opportunity to comment and a hearing on the proposed regulations as part of the SIP amendment are being provided in conjunction with this rulemaking. If adopted, DPR will provide these amendments to the California Air Resources Board to submit to U.S. EPA as a revision to the California SIP.

WRITTEN COMMENT PERIOD Any interested person may present comments in writing about the proposed action to the agency con - tact person named below. The public comment period for this regulatory action will begin on November 18, 2022. DPR will accept written comments that are sub- mitted via U.S. mail and postmarked no later than Jan- uary 18, 2023. Comments regarding this proposed ac- tion may also be transmitted via e–mail to dpr22005@ cdpr.ca.gov or by facsimile at 916–324–1491 and must be received no later than 5:00 p.m. on January 18, 2023.

PUBLIC HEARING A public hearing has been scheduled for the date and time stated below to receive oral and/or written comments regarding the proposed action. 1 This pub - lic hearing will occur in a hybrid format with both a physical location and an option to participate from a remote location. DATE: J anuary 18, 2023 TIME: 9 :30 a.m.

PLACE: Physical Location: C alEPA Headquarters Building B yron Sher Auditorium 1 001 I Street, 2nd Floor S acramento, California 95814 Re mote Location: Z oom W ebinar ID: 826 1358 3257 P assword: 045724 D irect link to join the meeting from a w eb browser or Zoom client: https://us02web.zoom.us/j/ 82613583257?pwd=UGJ0Wkxtb FlFYUdrQmJYb3V3QyszUT09 O ne tap to join from a mobile phone: + 16699009128,,82613583257#,,,, * 045724# O r call from a landline: + 1 669 900 9128 — and enter the W ebinar ID and Password (above) w hen prompted The hearing will also be accessible via public web - cast for persons who would like to watch this hearing without participating.

The public webcast can be ac - cessed by visiting the following web address: https:// video.calepa.ca.gov/#/. A DPR representative will preside at the hearing. Persons who wish to speak at the physical location will be asked to register before the hearing. The reg - istration of speakers will be conducted at the physical location from 8:00 a.m. to 9:00 a.m. Persons who are participating from a remote location and wish to speak will be asked to utilize Zoom’s “raise hand” feature. Persons at the physical location will be called upon first, followed by persons participating from a remote location.

Generally, registered persons at the physical location will be heard in the order of their registration and persons participating from a remote location will 1 If you have questions, comments, or require additional infor - mation, please contact the contact person named below. If you require reasonable accommodation or language assistance to par - ticipate, please provide notice at least 10 business days before the public meeting by contacting DPR’s Reasonable Accommodation Coordinator at 916–322–4553. TTY/TDD speech–to–speech us - ers may dial 7–1–1 for the California Relay Service.

CALIFORNIA REGULATORY NOTICE REGISTER 2022, VOLUME NUMBER 46-Z 1366 be heard in the order that they raised their hands in Zoom. Any other person who wishes to speak during the hearing will be afforded the opportunity to do so after persons who have registered at the physical loca- tion or who have raised their hands in Zoom have been heard. If a person participating from a remote location experiences technical difficulties during the hearing, they may e–mail written comments to dpr22005@ cdpr.ca.gov. DPR will also accept written comments that are submitted via U.S. mail and postmarked on the day of the hearing.

If the number of persons in attendance warrants, the hearing officer may limit the time for each oral comment in order to allow ev - eryone wishing to speak the opportunity to be heard. Oral comments presented at a hearing carry no more weight than written comments. Participants will be given instructions on how to provide oral comment once they have accessed the hearing. The hearing will continue on the date noted above until all testimony is submitted. DPR requests, but does not require, that persons who make oral com- ments at the hearing also submit a written copy of their testimony via e–mail.

EFFECT ON SMALL BUSINESS DPR has determined that the proposed regulatory action does affect small businesses. INFORMATIVE DIGEST/POLICY STATEMENT OVERVIEW DPR’s mission is to protect public health and the en- vironment by regulating pesticide sales and use, and by fostering reduced–risk pest management. DPR’s oversight includes product evaluation and registration; statewide licensing of commercial and private appli - cators, pest control businesses, dealers, and advisers; enforcement; and continuous evaluation of registered pesticides to ensure the protection of human health and the environment.

DPR’s program of continuous evaluation includes environmental monitoring and data collection. DPR also performs human health risk assessments of registered pesticides to carry out its statutory responsibilities. Upon completion of a risk assessment, DPR determines whether the use of a particular pesticide results in an unacceptable risk to human health or the environment, and may imple - ment additional mitigation or control measures on the pesticide’s sale, distribution and use through a variety of regulatory tools, such as conditions on registration, passing regulations, or cancellation.

This statutory scheme is set forth primarily in Food and Agricultural Code (FAC) Divisions 6 and 7. 1,3–D is a fumigant used to control nematodes, in - sects, and disease organisms in soil. Under existing regulations, 1,3–D is designated as a restricted mate - rial (3 CCR

section 6400(e)). As a restricted material, the purchase and use of 1,3–D is allowed only under a restricted materials permit from the local county agricultural commissioner (CAC). Before issuing a permit, the CAC must evaluate the permit application to determine whether the intended use may cause a substantial adverse environmental impact based on lo- cal conditions at the application site. Depending on the results of this review, the CAC may deny the permit or impose permit conditions including the use of specific mitigation measures.

As part of the permit for any re - stricted material, applicators must provide a notice of intent to the CAC before any application. The notice of intent includes application–specific information, such as the number of acres being treated and date the ap - plication is intended to commence. Additionally, 1,3–D is listed as a toxic air contam - inant (TAC) in 3 CCR

section 6860(

b) based on its designation as a hazardous air pollutant under the federal Clean Air Act. As a TAC and hazardous air pollutant for which a risk assessment has been com - pleted, DPR must determine the “need for and appro - priate degree of control measures” pursuant to FAC

section 14023(f). Control or mitigation measures that DPR develops for TACs must follow the requirements specified by FAC

section 14024, including consulting with specified agencies. 1,3–D is also a VOC and its emissions to the air con- tribute to the formation of ozone, a major air pollut - ant in California. Currently, 3 CCR sections 6448 and 6448.1 specify VOC requirements for 1,3–D field soil fumigations. The VOC requirements are mandated by the pesticide element of the ozone SIP for the federal Clean Air Act. The pesticide SIP element pertains to five regions in California that exceed the federal ozone standard (nonattainment areas) during the May–Octo- ber peak ozone season.

To mitigate the 1,3–D cancer risk to non– occupational bystanders, DPR currently implements a “township cap” program that includes a yearly use limit within designated 6×6 mile areas. The town - ship cap program includes six elements that address non–occupational bystander exposure. First, a notice of intent must be submitted to the CAC at least 48 hours before the fumigation begins. Second, the CAC will deny the notice of intent if the proposed applica - tion exceeds the township cap. Third, use reports for 1,3–D must include the field fumigation method code.

Fourth, 1,3–D field soil fumigations are prohibited within 100 feet of any occupied structure, measured from the perimeter of the application block to any oc - cupied residences, onsite employee housing, schools, convalescent homes, hospitals, or other similar sites identified by the CAC. If a structure is within 100 feet of the application block, no person shall be present at

CALIFORNIA REGULATORY NOTICE REGISTER 2022, VOLUME NUMBER 46-Z 1367 this structure at any time during the application and during the seven consecutive day period after the ap - plication is complete. 1,3–D product labels have a sim- ilar but less stringent occupied structure requirement. Fifth, field soil fumigations in December are prohibit- ed. And finally, the maximum application rate is 332 pounds active ingredient per acre.

The 1,3–D town - ship cap program, intended to mitigate cancer risk to non–occupational bystanders, was successfully chal - lenged in court by petitioners Juana Vasquez, Califor- nians for Pesticide Reform, and Pesticide Action Net - work North America. As a result, DPR is proposing regulations that will address acute and cancer risks to non–occupational bystanders from the use of 1,3–D.

The proposed regulations will place additional and more stringent restrictions on the use of 1,3–D for production agricultural purposes by establishing man- datory setbacks (distances from occupied structures where 1,3–D cannot be applied for a specified period of time); setting limits on the application rate and acres treated for individual applications; placing additional restrictions on seasonal applications and multiple ap - plications that do not meet distance or time separation criteria; requiring more stringent soil moisture content for applications; and limiting applications to specific fumigation methods with corresponding setbacks and restrictions.

The broad objectives of the proposed regulations are to mitigate the potential 72–hour acute risk and 70–year lifetime cancer risk to non–occupational by - standers from the use of 1,3–D, and to reduce VOC emissions from 1,3–D field soil fumigations. Adoption of these regulations will provide a benefit to public health and the environment by mitigating the potential acute and lifetime cancer risk to non–occupational by- standers from 1,3–D use, and by reducing VOC emis- sions to reduce ozone levels.

During the process of developing these regulations, DPR conducted a search of any similar regulations on this topic and concluded that these proposed regula - tions are not inconsistent or incompatible with exist - ing state regulations. DPR is the only state agency that has the authority to regulate the use of pesticides. Document Incorporated By Reference: 1,3–Dichloropropene Field Fumigation Require - ments, Est.

January 1, 2024 IMPACT ON LOCAL AGENCIES OR SCHOOL DISTRICTS DPR has determined that the proposed regulatory action does not impose a mandate on local agencies or school districts, nor does it require reimbursement by the state pursuant to

Part 7 (commencing with

section 17500) of Division 4 of the Government Code, because the regulatory action does not constitute a “new pro - gram or higher level of service of an existing program” within the meaning of

section 6 of

Article XIII of the California Constitution. DPR has also determined that no nondiscretionary costs or savings to local agencies or school districts are expected to result from the pro - posed regulatory action. CAC offices will be the local agencies responsi- ble for enforcing the proposed regulations. DPR an - ticipates that there will be no fiscal impact to these agencies. DPR negotiates an annual work plan with the CACs for enforcement activities. CACs currently evaluate, condition, and enforce 1,3–D restricted ma - terials permits, and the proposed regulations should result in a similar permitting workload.

COSTS OR SA VINGS TO STATE AGENCIES The proposed regulatory action is anticipated to re - sult in costs to DPR. Under the proposed regulations, DPR will be required to develop and maintain a list of approved totally impermeable film (TIF) tarpaulins; monitor and analyze the use of 1,3–D in each town - ship; conduct a detailed analysis of use in the top ten townships in different counties; and develop an annual report describing the outcome of the analysis and so - licit public feedback.

DPR estimates that this will re - sult in a cost of $195,000 in the 2023–2024 Fiscal Year (FY), and a total of $390,000 in the two subsequent FYs (2024–2025 and 2025–2026). EFFECT ON FEDERAL FUNDING TO THE STATE DPR has determined that no costs or savings in fed- eral funding to the state will result from the proposed action. EFFECT ON HOUSING COSTS DPR has made an initial determination that the pro- posed action will have no effect on housing costs.

SIGNIFICANT STATEWIDE ADVERSE ECONOMIC IMPACT DIRECTLY AFFECTING BUSINESS DPR has made an initial determination that adop - tion of these regulations will not have a significant statewide adverse economic impact directly affecting business, including the ability of California businesses to compete with businesses in other states. COST IMPACTS ON REPRESENTATIVE PRIVATE PERSONS OR BUSINESSES In reasonable compliance with the proposed ac - tion, growers using 1,3–D for the production of an

CALIFORNIA REGULATORY NOTICE REGISTER 2022, VOLUME NUMBER 46-Z 1368 agricultural commodity are anticipated to incur costs. Under the proposed regulations, growers will need to comply with a combination of requirements regard - ing application rate, application method, setbacks to occupied structures, and maximum application block size, which may result in switching to a different ap- plication method or reducing the size of their applica - tion block.

The average total cost for all growers using 1,3–D for the production of an agricultural commodi - ty to comply with these regulations is estimated to be $1,365,832 per year. The initial cost is estimated to be to $849–$2,187 to each impacted grower, regardless of whether the grower is a small business. The annual cost is estimated to be $2,187 to each grower who is impacted annually, regardless of whether the grower is a small business. Costs to each grower will vary based on whether annual or perennial crops are grown.

An - nual crops are reoccurring, so those businesses will have initial and annual ongoing costs. However, busi- nesses planting perennial crops will only use it once in the lifetime of the orchard, so those businesses will only have an initial cost since perennials are one–time applications.

RESULTS OF THE ECONOMIC I M PACT A NA LYSIS Impact on the Creation, Elimination, or Expansion of Jobs/Businesses: DPR determined it is not likely the proposed regulatory action will impact the creation or elimination of jobs, the creation of new businesses or the elimination of existing businesses, or the ex - pansion of businesses currently doing business with - in the State of California. DPR proposes to establish setbacks and fumigation method restrictions for each 1,3–D application, and the proposed requirements are similar to current requirements for other fumigants.

As with other fumigants, DPR anticipates businesses will manage the setbacks by shifting to fumigation methods with lower emissions and/or breaking up large fields into smaller blocks and fumigate sequen- tially over several days. The proposed regulations require minimal changes in processes, services, and equipment for compliance, and the changes can easily be achieved by existing businesses.

The Benefits of the Regulation to the Health and Welfare of California Residents, Worker Safety, and the State’s Environment: The proposed action is de - signed to reduce and mitigate the potential acute and cancer risk of 1,3–D to non–occupational bystanders and reduce VOC emissions to reduce ozone levels. While the proposed regulations will reduce the health risk, the reduction will vary depending on several fac- tors including a person’s distance from a 1,3–D ap - plication, the amount of 1,3–D applied, and weather conditions during applications.

DPR is not aware of any methods to quantify the health benefits or mon- etary value of actions to reduce acute or cancer risk to pesticides. Moreover, the uncertainties in evalu - ating risk make estimating benefits even more diffi- cult. For example, while DPR has established specific target concentrations, exceeding the targets increases the probability that adverse health effects might oc- cur, not that they will occur.

Quantifying the bene - fits for 1,3–D is particularly difficult because DPR’s risk characterization document indicates that the 55 ppb regulatory target concentration for acute risk is to mitigate a potential decrease in weight gain for infants and children. While other health impacts might be as - sociated with this effect, the direct benefits of avoiding this effect are uncertain.

CONSIDERATION OF ALTERNATIVES DPR must determine that no reasonable alternative considered by the agency, or that has otherwise been identified and brought to the attention of the agency, would be more effective in carrying out the purpose for which the action is proposed or would be as effec- tive and less burdensome to affected private persons or businesses than the proposed regulatory 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 the law.

AUTHORITY This regulatory action is taken pursuant to the au - thority vested by Food and Agricultural Code sections 11456, 12976, 14005, and 14024. REFERENCE This regulatory action is to implement, interpret, or make specific Food and Agricultural Code sections 11501, 14006, and 14024. A VAILABILITY OF STATEMENT OF REASONS AND TEXT OF PROPOSED REGULATIONS DPR has prepared an Initial Statement of Reasons and the express terms of the proposed action, all of the information upon which the proposal is based, and a rulemaking file.

A copy of the Initial Statement of Reasons and the proposed text of the regulations may be obtained from the agency contact person named in this notice. The information upon which DPR relied in preparing this proposal and the rulemaking file are available for review at the address specified below.

CALIFORNIA REGULATORY NOTICE REGISTER 2022, VOLUME NUMBER 46-Z 1369 A VAILABILITY OF CHANGED OR MODIFIED TEXT After the close of the comment period, DPR may make the regulations permanent if they remain sub - stantially the same as described in the Informative Digest. If DPR does make substantial changes to the regulations, the modified text will be made available for at least 15 days prior to adoption. Requests for the modified text should be addressed to the agency contact person named in this notice. DPR will accept written comments on any changes for 15 days after the modified text is made available.

AGENCY CONTACT Written comments about the proposed regulatory action; requests for a copy of the Initial Statement of Reasons, and the proposed text of the regulations; and inquiries regarding the rulemaking file may be direct- ed to: Lauren Otani, Senior Environmental Scientist (Specialist) Department of Pesticide Regulation 1001 I Street, P.O.

Box 4015 Sacramento, California 95812–4015 916– 445–5781 Note: In the event the contact person is unavailable, questions on the substance of the proposed regulatory action may be directed to the following person at the same address as noted below: Minh Pham, Environmental Program Manager II Environmental Monitoring Branch 916– 445–0979 This Notice of Proposed Action, the Initial State - ment of Reasons, and the proposed text of the regula - tions are also available on DPR’s Internet Home Page http://www.cdpr.ca.gov.

Upon request, the proposed text can be made available in an alternate form as a disability–related accommodation. A VAILABILITY OF FINAL STATEMENT OF REASONS Following its preparation, a copy of the Final State- ment of Reasons mandated by Government Code sec- tion 11346.9(

a) may be obtained from the contact per- son named above. In addition, the Final Statement of Reasons will be posted on DPR’s Internet Home Page and accessed at http://www.cdpr.ca.gov. TITLE 4. GAMBLING CONTROL COMMISSION SUBPOENAS CGCC–GCA–2022–06–R NOTICE IS HEREBY GIVEN that the Califor - nia Gambling Control Commission (Commission) is proposing to take the action described in the Infor - mative Digest after consideration of all relevant public comments, objections, and recommendations received concerning the proposed action.

Comments, objec - tions, and recommendations may be submitted as follows: WRITTEN COMMENT PERIOD Any interested person, or his or her authorized rep - resentative, may submit written comments relevant to the proposed regulatory action to the Commission at any time during the 45–day public comment period, which closes on January 3, 2022. Written comments relevant to the proposed regulatory action may be sent by mail, facsimile, or e–mail, directed to one of the in- dividuals designated in this notice as a contact person.

To be eligible for the Commission’s consideration, all written comments must be received at its office no later than midnight on January 4, 2022. Comments sent to persons and/or addresses other than those specified under Contact Persons, or received after the date and time specified above, will be included in the record of this proposed regulatory action, but will not be summarized or responded to re- gardless of the manner of transmission. PUBLIC HEARING The Commission has not scheduled a public hear - ing on this matter.

Any interested person, or his or her authorized representative, may request a hearing pur - suant to Government Code

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

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

CALIFORNIA REGULATORY NOTICE REGISTER 2022, VOLUME NUMBER 46-Z 1370 Notice as contact person and will be mailed to those persons who submit oral or written testimony related to this proposal or who have requested notification of any changes to the proposal. AUTHORITY AND REFERENCE Pursuant to the authority vested by sections 19811, 19823(a), 19824(h), 19840, and 19841, of the Business and Professions Code, and

section 11450.5(b), of the Government Code; and to implement, interpret or make specific sections 19840, 19870, and 19871 of the Business and Professions Code, sections 1985, 1985.1, 1985.2, 1985.3, and 1985.4, of the Code of Civil Pro - cedure, sections 1560 and 1561, of the Evidence Code, and sections 11450.05, 11450.20, 11450.30, 11450.50, and 11455.10 of the Government Code, the Commis - sion is proposing to adopt the following changes to

Chapter 1 of Division 18 of Title 4 of the California Code of Regulations: INFORMATIVE DIGEST AND POLICY STATEMENT Introduction: The Commission is the state agency charged with the administration and implementation of the Gam - bling Control Act (Act). The Commission is autho - rized to adopt regulations governing applications for licenses, permits, registrations, findings of suitabil- ity, or other approvals, including in connection with the consideration of an application at an evidentiary hearing.

The Commission’s regulations provide comprehen- sive procedures for evidentiary and non–evidentiary hearings and related topics. At a Commission meet - ing, the Commission may, among other actions, issue or deny a license, temporary license, interim license, registration, permit, finding of suitability, renewal, or other approval; or it may elect to hold an evidentiary hearing if issues are identified that require additional information or consideration related to an applicant’s suitability for licensure.

For evidentiary hearings on applications, the regulations require the hearing to be conducted as a Gambling Control Act hearing (GCA hearing), unless the Commission determines the hear- ing should be conducted as an Administrative Proce - dure Act hearing (APA hearing). This proposed regulatory action adds requirements to the service of subpoenas and will clarify discover related procedures available to parties to a GCA hear- ing. They include: 1. Clarifying that all subpoenas and subpoenas du - ces tecum must be served in the manner provid - ed by Government Code

section 11450.20 and requiring that a copy be served on the presiding officer. 2. Allowing the presiding officer to order, on their own motion, to enforce, modify, or quash a sub - poena or subpoena deuces tecum. 3. Clarifying the exclusive right to and method of discovery between the applicant and complainant to a GCA hearing, and that discovery is not per - mitted upon a member of the Commission or an advisor of the Commission. Existing Law:

Section 19824, subdivision (

h) of the Business and Professions Code provides authority for the issuance of subpoenas and subpoenas duces tecum, and states that the Commission may “issue subpoenas to compel attendance of witnesses and production of documents and other material things at a meeting or hearing of the commission or its committees, including advisory committees.”

Section 11450.05, subdivision (

b) of the Government Code states that “An agency may use the subpoena procedure provided in this

article [Article 4.5] in an adjudicative proceeding not required to be conducted under

Chapter 5 (commencing with

Section 11500), in which case all the provisions of this

article apply in - cluding, but not limited to, issuance of a subpoena at the request of a party or by the attorney of record for a party under

Section 11450.20.” Effect of Regulatory Action: The proposed action has been prepared to modify existing subpoena regulations to clarify discovery re - lated procedures available to parties to a GCA hear - ing. They include: 1. Clarifying that all subpoenas and subpoenas du - ces tecum must be served in the manner provid - ed by Government Code

section 11450.20 and re- quiring that a copy be served on the presiding officer. 2. Allowing the presiding officer to order, on their own motion, to enforce, modify, or quash a sub - poena or subpoena deuces tecum. 3. Clarifying the exclusive right to and method of discovery between the applicant and complainant to a GCA hearing, and that discovery is not per - mitted upon a member of the Commission or an advisor of the Commission. Anticipated Benefits of Proposed Regulation: This proposed action will avoid needless consump - tion of time to deal with unwarranted subpoena and subpoenas duces tecum.

In addition, it makes addition- al clarifications regarding the exclusive right to and method of discovery between the applicant and com - plainant to a GCA hearing, which will avoid discov - ery disputes and clarify that discovery is not permitted

CALIFORNIA REGULATORY NOTICE REGISTER 2022, VOLUME NUMBER 46-Z 1371 upon a member of the Commission or an advisor of the Commission except in limited circumstances. Specific Proposal: This proposed action will make changes within the California Code of Regulations, Title 4, Division 18 as follows:

Chapter 1 General Provisions

Article 1.

Definitions and General Provisions Amend 12014. Subpoenas.

Section 12014 provides to the Commission’s guide- lines for subpoenas and subpoenas duces tecum. Subsection (

a) provides that the issuance and en - forcement of a subpoena or subpoena duces tecum in any adjudicative proceeding held pursuant to the Act for which a notice of hearing has been issued will be in accordance with

Article 11 (commencing with sec - tion 11450.05) and

Article 12 (commencing with sec - tion 11455.10), respectively, of

Chapter 4.5 of

Part 1 of Division 3 of Title 2 of the Government Code. Further, the issuance of a subpoena or subpoena duces tecum may be on the form entitled “Subpoena,” CGCC– CH1–02 (New 05/20), or in a manner that otherwise complies with

Article 11 of

Chapter 4.5 of

Part 1 of Division 3 of Title 2 of the Government Code. Last - ly, all subpoenas and subpoenas duces tecum must be served at least 30 days prior to the date specified for commencement of the hearing in the notice of hearing, or the date specified in the subpoena for the appear- ance of a witness or the production of records. Subsection (

a) has been revised to provide updates to the requirements of how a subpoena and/or subpoe- na duces tecum is served. Specifically, it requires ser- vice pursuant to Government Code

section 11450.20 with a copy to the presiding officer. Subsection (

b) provides that any motion made pur - suant to subdivision (

a) of

section 11450.30 of the Gov- ernment Code must be filed with the presiding officer no later than 15 days prior to the date specified for appearance or for the production of records. The party bringing the motion must serve copies of the motion on all parties and persons who are required by law to receive notice of the subpoena. Any response to the motion must be filed with the presiding officer and served no later than 5 days before the motion is sched- uled to be heard.

Upon a timely motion of a party or a witness, after notice to the parties and an opportunity to be heard, upon a showing of good cause, the pre - siding officer may order the quashing of a subpoena or subpoena duces tecum entirely, may modify it, or may direct compliance with it upon other terms and conditions. This provision, has been revised to provide that the presiding officer may, on their own motion (suo moto), order the quashing of a subpoena or subpoena duces tecum entirely, may modify it, or may direct compli - ance with it upon other terms and conditions. Amend 12052.

Commission Meeting; General Procedures; Scope; Notice; Rescheduling of Meeting.

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

c) provides what the Commission will include in a notice for any license, permit, finding of suitability, renewal, or other approval. Subparagraph (

B) of paragraph (2) provides that if the application is to be scheduled at an evidentiary hearing, informa - tion must be provided regarding the date, time, and location of the pre–hearing conference. This

section is modified to update a reference due to a provision being moved.

Article 2. Procedures for Hearings and Meetings on Applications Amend 12060. GCA Hearings.

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

f) specifies that the complainant will provide to the applicant, at least 45 calendar days prior to the GCA hearing, and the applicant must provide to the complainant, at least 30 calendar days prior to the GCA hearing, a list of items. ● Subparagraph (4) provides other written com- ments and writings must be provided. This pro - vision is amended to include “other items” that contain relevant evidence. New subsection (

g) provides that the exclusive right to and method of discovery between the applicant and complainant during a GCA hearing is as provided in subsection (f). Additionally, it provides that discovery is not permitted upon a member of the Commission or an advisor of the Commission except in limited circumstances. Subsection (l), renumbered to subsection (m), is modified to update a reference due to a provision be- ing moved. Existing subsections (

g) through (

n) are renumbered to subsections (

h) through (o).

Chapter 2 Licenses and Work Permits

Article 1. Initial and Renewal Licenses and Work Permits Amend 12118. Objection to Local Work Permits.

Section 12118 provides a series of general provisions that apply to the Commission’s ability to object to the issuance of a work permit by a local jurisdiction. Subsection (

c) is modified to update a reference due to a provision being renumbered.

CALIFORNIA REGULATORY NOTICE REGISTER 2022, VOLUME NUMBER 46-Z 1372 CONSISTENCY OR COMPATIBILITY WITH EXISTING STATE REGULATIONS The Commission has evaluated this regulatory ac - tion and determined that the proposed regulations are neither inconsistent nor incompatible with any other existing state regulations. The proposed action is intended to make changes to the Commission’s regulations to improve the Com- mission’s existing processes and in so doing makes them more compatible and internally consistent.

COMPARABLE FEDERAL LAW There are no existing federal regulations or statutes comparable to the proposed regulations. FISCAL IMPACT ESTIMATES Fiscal Impact on Public Agencies Including Costs or Savings to State Agencies or Costs/ Savings in Federal Funding to the State: None Non–Discretionary Cost or Savings Imposed Upon Local Agencies: None. Mandate Imposed on Any Local Agency or School District for Which

Part 7 (Commencing with

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

Part 7 (Commencing with

Section 17500) of Division 4 of the Government Code Requires Reimbursement: None. Effect on Housing Costs: None. Impact on Business: The Commission has determined that this regulato - ry proposal will not have a significant impact directly affecting business, including the ability to compete. For this purpose, the definition of a small business as defined by the federal Small Business Administration was utilized.

The basis for this determination is that this proposed action imposes no mandatory requirement on busi - nesses or individuals and does not significantly change the Commission’s current practices and procedures. Cost Impact on Representative Private Person or Business: The Commission is not aware of any cost impacts that a representative private person or business would necessarily incur in reasonable compliance with the proposed action.

Effect on Small Business: The Commission has made a determination that the proposed regulatory action would not affect small businesses as the proposed action only modifies exist- ing subpoena requirements. Results of Economic Impact Assessment/ Analysis Impact on Jobs/New Businesses: The Commission has determined that this regulato - ry proposal will not have a significant impact on the creation of new jobs or businesses, the elimination of jobs or existing businesses, or the expansion of busi - nesses in California.

For this purpose, the definition of a small business as defined by the federal Small Business Administration was utilized. The basis for this determination is that this pro - posed action imposes no new mandatory requirement on businesses or individuals and does not significantly change the Commission’s current practices and proce- dures. The proposed action modifies existing subpoe- na requirements.

Benefits of Proposed Regulation: It has been determined that the proposed action will protect the health, safety, and general welfare of California residents by aiding and preserving the in - tegrity of controlled gambling. Health and Welfare of California Residents: It has been determined that the proposed action will protect the health, safety, and general welfare of California residents by aiding and preserving the in - tegrity of controlled gambling.

Worker Safety: It has been determined that the proposed action will not affect worker safety because it does not pertain to working conditions or worker safety issues. State’s Environment: It has been determined that the proposed action will not affect the State’s environment because it does not pertain to environmental issues.

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

INITIAL STATEMENT OF REASONS, INFORMATION AND TEXT OF PROPOSAL The Commission has prepared an Initial Statement of Reasons and the exact language for the proposed action and has available all the information upon which the proposal is based. Copies of the language and of the Initial Statement of Reasons, and all of the

CALIFORNIA REGULATORY NOTICE REGISTER 2022, VOLUME NUMBER 46-Z 1373 information upon which the proposal is based, may be obtained at the hearing or prior to the hearing upon request from the Commission at 2399 Gateway Oaks Drive, Suite 220, Sacramento, CA 95833–4231. A VAILABILITY AND LOCATION OF THE RULEMAKING FILE AND THE FINAL STATEMENT OF REASONS All the information upon which the proposed ac - tion is based is contained in the Rulemaking File that will be available for public inspection and copying at the Commission’s office throughout the rulemaking process.

Arrangements for inspection and/or copying may be made by contacting the primary contact per - son named below. You may obtain a copy of the Final Statement of Reasons, once it has been prepared, by making a writ- ten request to one of the contact persons named be - low or by accessing the Commission’s website listed below.

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

TITLE 4. POLLUTION CONTROL FINANCING AUTHORITY Pursuant to

Section 44520 of the Health and Safe - ty Code, the regulations being amended herewith by the California Pollution Control Financing Authority (“CPCFA” or the “Authority”) are, by legislative man- date, necessary to carry out its powers and duties. PROPOSED REGULATORY ACTION The Authority proposes to amend

Section 8035 of Title 4, Division 11,

Article 4 of the California Code of Regulations (the “Amended Regulations”) concerning the administration of the California Pollution Control Financing Authority’s Bond Program. These Amend- ed Regulations are necessary to implement, interpret and make specific

Article 4 of the California Pollution Control Financing Authority Act (the “Act”). AUTHORITY AND REFERENCE Authority: Sections 44520(

a) and 44548(a)

(3) Health and Safety Code.

Section 44520(

a) authorizes the Au- thority to adopt these proposed regulations to carry out its powers and duties.

Section 44548(a)(3) allows the Authority to adopt regulations which provide for differential fees from participating parties based upon factors determined to be relevant by the Authority. Reference:

Section 44519, 44520, 44525, 44537.5, 44537.5 and 44548, of the Health and Safety Code. INFORMATIVE DIGEST/POLICY STATEMENT OVERVIEW Existing law establishes the Authority to adopt all necessary rules and regulations to carry out its pow - ers and duties under this division pursuant to

Section 44520 of the Health and Safety Code. Background of

Section 8035. During the late 1970s and early 1980s, the U.S. Small Business Administration (SBA) administered a special pollution control loan guarantee program for small businesses. The program offered SBA loan guarantees for federally issued tax–exempt bonds. The SBA discontinued the program in 1981, which left small business borrowers with inadequate resources for securing cost–effective tax–exempt financing. In order to fill the void created by the discontinua- tion of the SBA program and offset certain costs of is-

CALIFORNIA REGULATORY NOTICE REGISTER 2022, VOLUME NUMBER 46-Z 1374 suance and letter of credit fees associated with tax–ex- empt bond issuance, the State Legislature established the collection of the Small Business Assistance Fund (SBAF) fees from large businesses obtaining conduit bond financing from the Authority in 1985. Under this legislation, large businesses began paying into SBAF to support the Authority’s programs that benefit small business borrowers.

Eligible small business (A small business is defined as 500 employees or less.) borrowers can receive up to $210,000 towards its eligible costs of issuance, based on a sliding scale dependent on the Par amount of the transaction. Currently, the Authority awards SBAF funds to eligible small business borrowers at the close of a transaction. SBAF funds may be used to pay certain transaction costs of issuance and certain post issuance requests.

Acceptable SBAF subsidy uses include, but are not limited to, bond counsel fees, underwriter or placement agent fees or discount and related expenses, printing fees, fees due to other state agencies, account- ing fees, consultant’s fees, other expenses directly re- lated to the issuance of bonds that are normally paid from bond proceeds at the time of closing, and post issuance requests related to a change in a national in - terest rate index (eg. LIBOR to SOFR). Currently, the Authority maintains approximately $14.95 million, available for use to qualified small business borrow- ers, in the SBAF account.

Need for an amendment to

Section 8035 In early 2013, the Authority waived the SBAF fee for large businesses and between 2013 and 2015, there were 5 large businesses that successfully issued tax– exempt bonds with the Authority. Then, the Author - ity extended the waiver for an additional six months until December 31, 2016, and waived half of the fee from January 1, 2017, to June 30, 2017. Between June 30, 2016, and June 30, 2017, one large business is - sued bonds with the Authority. In the last four years, only two large businesses have issued bonds with the Authority.

Staff anticipates that the temporary fee suspension will entice large businesses to once again finance with the Authority. Suspension of the SBAF fee notice - ably reduces a portion of the cost of issuance. The fee waiver could also make the Authority competitive in an increasingly high borrowing cost environment and incentivize national companies to focus investment in California. With the current SBAF balance of approximately $14.95 million, the temporary SBAF fee suspension will not affect the availability of SBAF assistance to small businesses.

During the previous four years, the SBAF received fees from two large businesses and all eligible small businesses received SBAF assistance. See table on page 2 of the Initial Statement of Reasons which outlines the number of companies and amounts paid into and out of the SBAF over the past four years. ANTICIPATED BENEFITS FROM THIS REGULATORY ACTION CPCFA anticipates that the temporary fee waiver will entice large businesses to issue bonds by notice - ably reducing a portion of the cost of issuance.

The fee reduction could also serve as an incentive for nation - al companies to focus investment in California while their fees are lowered. CPCFA will also continue to utilize the current balance of the SBAF fund to help small businesses pay for the costs of issuance of tax– exempt bonds.

The proposed amendment to the current regula - tions will not have a significant effect on the creation or elimination of jobs in California, significantly af- fect the creation of new businesses or elimination of existing businesses within California, or significant- ly affect the expansion of businesses currently doing business within California. After conducting a review for any related regula - tions in this area, the Executive Director has deter - mined that these are the only regulations concerning the SBAF fee paid by large businesses.

Therefore, the proposed regulations are neither inconsistent nor in - compatible with existing state regulations. DISCLOSURE REGARDING THE PROPOSED ACTION The Executive Director of the Authority has made the following determinations regarding the effect of the Amended Regulations: Mandate on local agencies or school districts: None. Cost or savings to any state agency: None. Cost to any local agency or school district that must be reimbursed in accordance with Govern- ment Code sections 17500–17630: None. Other non–discretionary cost or savings imposed on local agencies: None.

Cost or savings in federal funding to the state: None. Significant effect on housing costs: None. Cost impact on a representative private person or business: The Authority is not aware of any cost impacts that a representative private person or busi - ness would necessarily incur in reasonable compli - ance with the proposed action. Small Business: The Amended Regulations will not have an adverse impact on small business in Cal - ifornia and will not affect small business since they do not impose additional restrictions or cost on small business.

CALIFORNIA REGULATORY NOTICE REGISTER 2022, VOLUME NUMBER 46-Z 1375 Significant, statewide, adverse economic impact directly affecting businesses including the ability of California businesses to compete with business- es in other states: The Authority has made an initial determination that the Amended Regulations will not have a significant, statewide adverse economic impact directly affecting businesses, including the ability of California businesses to compete with businesses in other states.

RESULTS OF THE ECONOMIC I M PACT A NA LYSIS Assessment regarding effect on jobs/businesses: The Amended Regulations will not have a significant effect on the creation or elimination of jobs in Califor- nia, significantly affect the creation of new businesses or elimination of existing businesses within Califor - nia, or significantly affect the expansion of businesses currently doing business in California.

Benefits of the regulation to the health and wel- fare of California residents, worker safety, and the state’s environment: The proposed amendments to sections 8035 will open more financing opportunities to businesses involved in pollution control projects. These types of projects will benefit the environment and the public health and safety. CONSIDERATION OF ALTERNATIVES In accordance with Government Code

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

The Authority invites interested parties to present statements with respect to alternatives to the Amend - ed Regulations during the written comment period.

AGENCY CONTACT PERSON Written comments, inquiries and any questions re - garding the substance of the Amended Regulations shall be submitted or directed to: Andrea Gonzalez, Associate Governmental Program Analyst California Pollution Control Financing Authority 915 Capitol Mall, 5th Floor Sacramento, CA 95814 Telephone: (916) 651–7284 Fax: (916) 657–4821 Email: andrea.gonzalez@treasurer.ca.gov Deanna Hamelin, Staff Services Manager I California Pollution Control Financing Authority 915 Capitol Mall, 5th Floor Sacramento, CA 95814 Telephone: (916) 651–6503 Fax: (916) 657–4821 Email: dhamelin@treasurer.ca.gov WRITTEN COMMENT PERIOD Any interested person, or his or her authorized rep - resentative, may submit written comments relevant to the Amended Regulations to the Authority.

The writ - ten comment period on the Amended Regulations ends at 5:00 p.m. on January 4, 2023 . All the comments must be submitted in writing to the Agency Contact Person identified in the Notice by that time in order for them to be considered by the Authority.

In the event that substantial changes are made to the proposed regulations during the written comment pe - riod, the Authority will also accept additional written comments limited to any changed or modified reg- ulations for fifteen (15) calendar days after the date on which such regulations, as changed or modified are made available to the public pursuant to Title 1,

Chapter 1,

Section 44 of the California Code of Reg - ulations. Such additional written comments should be addressed to the Agency contact person identified in this Notice. AVAILABILITY OF INITIAL STATEMENT OF REASONS AND TEXT OF PROPOSED REGULATIONS The Authority has established a rulemaking file for this regulatory action, which contains those items re - quired by law. The file is available for inspection at the Authority’s office at 801 Capitol Mall, Room 266, Sacramento, California 95814, during normal business working hours.

As of the date this Notice is published in the Notice Register, the rulemaking file consists of this notice, the Initial Statement of Reasons and the proposed text of the Adopted Regulations. Cop - ies of these items and all the information upon which the proposed rulemaking is based are available upon request from the Agency Contact Person designated

CALIFORNIA REGULATORY NOTICE REGISTER 2022, VOLUME NUMBER 46-Z 1376 in this Notice or at the Authority’s website located at http://www.treasurer.ca.gov/cpcfa/index.asp. PUBLIC HEARING CPCFA does not intend to conduct a Public Hearing on the matter of these regulations, unless requested. Any interested person may submit a written request for a public hearing no later than 15 days prior to the close of the written comment period. AVAILABILITY OF CHANGED OR MODIFIED TEXT After the written comment period ends and follow - ing a public hearing, if any is requested pursuant to

Section 11346.8 of the Government Code, the Author- ity may adopt the proposed Regulations substantially as described in this Notice, without further notice. If the Authority makes modifications that are sufficiently related to the originally proposed text, it will make the modified text (with changes clearly indicated) avail- able to the public for at least fifteen (15) calendar days before the Authority adopts the proposed Regulations, as modified. Inquiries about and requests for copies of any changed or modified regulations should be ad- dressed to the Agency Contact Person identified in this Notice.

The Authority will accept written comments on the modified regulations for fifteen (15) calendar days after the date on which they are made available. AVAILABILITY OF FINAL STATEMENT OF REASONS Upon completion, a copy of the Final Statement of Reasons may be requested from the Agency Contact Person designated in this Notice or found at the Au - thority’s website at http://www.treasurer.ca.gov/cpcfa/ index.asp. California Board of Accountancy 2450 Venture Oaks Way, Suite 420 Sacramento, CA 95833 January 10, 2023 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 January 3, 2023 , 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 modify such proposals if such modifications are sufficiently related to the origi- nal text.

With the exception of technical or grammati- cal 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 authori - ty vested by Sections 5010 and 5018 of the Business and Professions Code (BPC), and to implement, inter- pret, or make specific sections 5018 and 5063.3 of said Code and Civil Code

section 1798.81, the CBA is con- sidering 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- 1 All California Code of Regulations references are to title 16, unless otherwise indicated. TITLE 16. B OARD OF ACCOUNTANCY SALE, TRANSFER, OR DISCONTINUANCE OF LICENSEE’S PRACTICE 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 REGULATORY NOTICE REGISTER 2022, VOLUME NUMBER 46-Z 1377 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- tants 2 (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 (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 successor person 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 person. 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 notifying 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 records to the successor person, the documents the licensee 2 The AICPA is the world’s largest member association repre - senting the accounting profession with a history of serving the public interest since 1887. It sets ethical standards for the account- ing profession and U.S. auditing standards for private companies, nonprofit organizations, and federal, state and local governments. 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 person, 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. 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 person 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. However, the CBA notes over the past two years it received 7,143 total complaints (2,729 in 2020–21 and 4,414 in 2021–22) of which, zero percent were related

CALIFORNIA REGULATORY NOTICE REGISTER 2022, VOLUME NUMBER 46-Z 1378 to violations of the proposed regulations. As a result, no additional workload or costs are anticipated. The regulations do not result in costs or savings in federal funding to the state. 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 cli - ents of the sale or transfer of the practice via first– class or certified mail, or via electronic transmission. If sent by first–class or certified mail, it may result in costs of $0.60 (domestic) and $1.40 (international) per notification, or $4.00 per notification for certified mail.

The CBA cannot provide an estimate of the to - tal 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, 2) the number and location of clients impacted, and 3) the method of notification. Licensees would also be required to either transfer client records to the successor person or to the client, as specified, or retain the records, as specified.

Be- cause any client record transfer and/or retention costs would also depend on these same unknown variables, the CBA cannot provide an estimate of these transfer or retention costs. However, the CBA notes that most client records are typically retained by the licensee in digital format and any transfer or retention of these records would occur digitally, 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 record transfer or retention costs.

As a result, these individuals would probably choose to dig- itize any records as part of their normal course of busi- ness and complete the digitizing of records prior to the sale or transfer to eliminate these potential costs. Business Impact: The CBA has made an initial determination that the proposed regulatory action would have no significant statewide adverse economic impact directly affecting business, including the ability of California businesses to compete with businesses in other states. The following studies/relevant data were relied upon in making the above determination: Pursuant to CBA Regulations

section 58, all licens - ees engaged in the practice of public accountancy shall comply with all applicable professional stan - dards, which includes the AICPA Code of Profes - sional Conduct. The AICPA Code of Professional Conduct contains standards regarding the sale, trans - fer and discontinuance of a practice and changes to these standards is the basis for this rulemaking action. The CBA ’s proposed regulations provide added detail regarding how licensees can meet the existing stan - dards relating to sale, transfer, or discontinuance of a practice. As licensees would already be subject to any costs associated with meeting the standards, pursuant to CBA Regulations

section 58, the proposed regula - tions specific to the sale, transfer and discontinuance (54.3 and 54.4) will not create an additional significant economic impact for licensees. Cost Impact on Representative Private Person or Business: The cost impact that a representative private per - son or business would necessarily incur in reason - able compliance with the proposed action and that are known to the CBA are mailing costs to notify or pro - vide records to a client. The cost impact in providing records to a client would be dependent on the volume of records the licensee has for that client.

For exam - ple, a licensee with fewer and/or smaller clients with fewer records to maintain would incur less cost than a licensee with many and/or larger clients with a larger volume of records to maintain. Additionally, depend - ing on whether the records are stored in a hardcopy or electronic format, storage of said records may incur costs, and such costs would vary based on the volume of records being maintained. Effect on Housing Costs: None. EFFECT ON SMALL BUSINESS The CBA has determined that the proposed regula - tions would affect small businesses.

Specifically, any licensee who is a small business and decides to sell, transfer, or discontinue their practice will need to no - tify their clients via a written notification and based on the response (or non–response) to that notification, must follow specific requirements for transfer, return, or storage of the records. Ultimately, in cases where the licensee must retain a client’s records, they will also be required to dispose of the records, following a specific timeframe, in a manner that will ensure confidentiality.

RESULTS OF ECONOMIC IMPACT ASSESSMENT/ANALYSIS Impact on Jobs/Businesses: The CBA has determined that this regulatory pro - posal will not have a significant impact on the creation of jobs or new businesses, or the elimination of jobs or

CALIFORNIA REGULATORY NOTICE REGISTER 2022, VOLUME NUMBER 46-Z 1379 existing businesses, or the expansion of businesses in the State of California. Benefits of Regulation: The CBA has determined that this regulatory pro - posal will have the following benefits to the health and welfare of California residents, worker safety, and state’s environment: This proposal would benefit the welfare of California residents because it would require licensees to follow specified procedures intended to protect consumers and their client records when a licensee sells, trans - fers, or discontinues a public accountancy practice.

This regulatory proposal does not affect worker safety because it has nothing to do with worker safety. This regulatory proposal does not affect the state’s environment because it has nothing to do with the environment.

CONSIDERATION OF ALTERNATIVES The CBA 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 effecive in implementing the statutory policy or other provision of law.

Any interested person may present statements or arguments orally or in writing relevant to the above determinations at the above–mentioned hearing. INITIAL STATEMENT OF REASONS AND INFORMATION The CBA 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 of the initial statement of reasons, and all of the information upon which the proposal is based, may be obtained at the hearing or prior to the hear - ing upon request from the CBA at 2450 Venture Oaks Way, Suite 300, Sacramento, California, 95833. 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 which 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.

CONTACT PERSON Inquiries or comments concerning the proposed rulemaking action may be addressed to: Name: Sarah Fletcher Address: 2450 Venture Oaks Way, Suite 300 Sacramento, CA 95833 Telephone Number: (916) 561–1706 Fax Number: (916) 263–3678 E–Mail Address: regulations@cba.ca.gov The backup contact person is: Name: Corey Faiello–Riordan Address: 2450 Venture Oaks Way, Suite 300 Sacramento, CA 95833 Telephone Number: (916) 561–4345 Fax Number: (916) 263–3678 E–Mail Address: regulations@cba.ca.gov Website Access: Materials regarding this proposal can be found at https://www.dca.ca.gov/cba/about/laws–and–rules. shtml.

TITLE 18. DEPARTMENT OF TAX AND FEE ADMINISTRATION PROPOSED ADOPTION OF DIVISION 5,

CHAPTER 5, COUNTY REVENUE PROTECTION FUND REGULATIONS, AND

SECTION 35401, REGISTRATION, REPORTING, AND REIMBURSEMENT NOTICE IS HEREBY GIVEN that the California Department of Tax and Fee Administration (Depart - ment), pursuant to the authority in

section 2.3 of ar - ticle XIII A of the California Constitution, proposes to adopt

chapter 5, County Revenue Protection Fund Regulations, and

section (Regulation or Reg.) 35401, Registration, Reporting, and Reimbursement, in chap- ter 5 of division 5 of title 18 of the California Code of Regulations (CCR). (All further

section references are to sections in

article XIII A of the Cal. Const., unless otherwise specified.) Proposed Regulation 35401 re- quires each county to register with the Department to report the gains it is required to annually determine

CALIFORNIA REGULATORY NOTICE REGISTER 2022, VOLUME NUMBER 46-Z 1380 for the county and each local agency in the county un- der subdivision (

a) of

section 2.3. It clarifies the deter- mination periods for which the gains shall annually be determined under subdivision (

a) of

section 2.3. It specifies the dates by which the gains shall annually be determined as required by subdivision (

a) of

section 2.3. It requires each county to report the gains it annu- ally determines under subdivision (

a) of

section 2.3 to the Department by specified reporting due dates every three years. It also clarifies how the Department will use the gains reported by the counties to determine each county’s and local agency’s aggregate gain every three years and provide reimbursement to each county and local agency with an aggregate negative gain un - der subdivision (

c) of

section 2.3. AUTHORITY

Section 2.3. REFERENCE

Section 2.3. INFORMATIVE DIGEST/POLICY STATEMENT OVERVIEW

Summary of Existing Laws Base Year Value As relevant here,

section 1 generally limits the max- imum amount of ad valorem taxes on real property to one percent of the full cash value of that property and requires the one percent tax to be collected by the counties and apportioned according to law to the dis - tricts within the counties.

Section 2 generally defines full cash value as the appraised value of the real prop- erty when purchased, newly constructed, or a change in ownership has occurred. It authorizes the full cash value base to be adjusted by an annual inflationary rate not to exceed two percent. It also authorizes the full cash value to be reduced to reflect substantial damage, destruction, or other factors causing a decline in value. For purposes of

section 2, subdivisions (

a) and (

b) of Revenue and Taxation Code (RTC)

section 110.1 gen- erally provide that the base year value for real prop - erty is the “full cash value” or fair market value of the property as determined pursuant to RTC

section 110 on the 1975 lien date or the date of the most re - cent change in ownership of the property or the date of completion of new construction. Subdivision (

f) of RTC

section 110.1 requires the base year value of real property to be adjusted by an inflation factor for each lien date after the lien date in which the base year val- ue is determined, and that adjusted value is known as the adjusted base year value. RTC

section 51 prohibits the inflation factor from exceeding two percent of the prior year’s value. RTC

section 51 further provides, for purposes of

section 2, that for each lien date after the lien date in which the base year value is determined, the taxable value of real property is generally the less- er of: (1) the adjusted base year value; or (2) its full cash value, as defined in RTC

section 110, as of the lien date, taking into account reductions in value due to damage, destruction, depreciation, obsolescence, removal of property, or other factors causing a decline in value. The lien date is the first day of January pre- ceding the fiscal year for which the taxes are levied, unless otherwise provided. (RTC, § 2192.) Base Year Value Transfers Subdivision (

a) of

section 2 authorizes the Legisla - ture to enact legislation that allows a person over 55 years of age or any severely and permanently disabled person residing in property eligible for the homeown - er’s exemption to transfer the property’s adjusted base year value to a replacement dwelling of equal or less - er value located in the same county or another coun - ty that has adopted an ordinance allowing in–bound base year value transfers from other counties that is purchased or newly constructed by that person as his or her principal residence within two years of the sale of the original property. The Legislature enact - ed RTC

section 69.5 to allow those base year value transfers when certain conditions are met. As of No - vember 7, 2018, the following 10 counties had ordi - nances enabling these types of intercounty base year value transfers: Alameda, Los Angeles, Orange, Riv - erside, San Bernardino, San Diego, San Mateo, Santa Clara, Tuolumne, and Ventura. (See www.boe.ca.gov/ proptaxes/prop60–90_55over.htm.) Subdivision (

e) of

section 2 requires the Legislature to enact legislation that allows the base year value of property that is substantially damaged or destroyed by a disaster, as declared by the Governor, to be trans - ferred to comparable property within the same county that is acquired or newly constructed as a replacement for the substantially damaged or destroyed property. Subdivision (

e) of

section 2 also authorizes the Leg - islature to enact legislation authorizing counties to adopt ordinances allowing similar in–bound base year value transfers if the replacement property is of equal or less value and acquired or newly constructed within three years of the substantial damage or destruction to the original property. The Legislature enacted RTC sections 69 and 69.3 to allow these intra–county and intercounty base year value transfers, respectively.

As of May 6, 2021, the following 14 counties had adopted ordinances enabling these types of intercounty base year value transfers: Contra Costa, Glenn, Los Ange - les, Modoc, Orange, San Diego, San Francisco, San - ta Clara, Solano, Sonoma, Sutter, Ventura, Yolo, and Yuba. (See www.boe.ca.gov/proptaxes/disaster–relief. htm#FAQs.)

CALIFORNIA REGULATORY NOTICE REGISTER 2022, VOLUME NUMBER 46-Z 1381 Parent–Child and Grandparent–Grandchild Transfer Exclusions Subdivision (

h) of

section 2 provides that the pur - chase or transfer of the principal residence and the first one million dollars of the full cash value of other real property of a transferor, in the case of a transfer between parents and their children or between grand - parents and their grandchildren if all the parents of those grandchildren are deceased, is not a “purchase” or “change in ownership” for purposes of determin - ing the “full cash value” of property under

section 2. The Legislature enacted RTC

section 63.1 to imple - ment the parent–child and grandparent–grandchild transfer exclusions from reassessment and it generally provides that the full cash value of other real property is its adjusted base year value immediately prior to the date of its purchase or transfer. (RTC, § 63.1, subd. (c).) Proposition 19 Assembly Constitutional Amendment Number 11 (Stats. 2020,

chapter 31), the Home Protection for Se- niors, Severely Disabled, Families, and Victims of Wildfire or Natural Disasters Act, was placed on the ballot as Proposition 19, approved by the voters at the November 3, 2020, statewide general election, and added sections 2.1, 2.2, and 2.3 effective December 16, 2020. As relevant here, subdivision (

b) of

section 2.1 expanded base year value transfers by authorizing an owner of a primary residence who is over fifty–five years of age, severely disabled, or a victim of a wild - fire or natural disaster to transfer the taxable value of their primary residence to a replacement primary residence located anywhere in the state, beginning April 1, 2021, regardless of the location or value of the replacement primary residence, that is purchased or newly constructed as that person’s principal resi - dence within two years of the sale of the original pri - mary residence.

Also, for any transfer of taxable value to a replacement primary residence of greater value than the original primary residence, subdivision (

b) of

section 2.1 requires the taxable value of the replace - ment primary residence to be calculated by adding the difference between the full cash value of the original primary residence and the full cash value of the re - placement primary residence to the taxable value of the original primary residence. Subdivision (

c) of

section 2.1 provides new parent–child and grandparent–grandchild transfer exclusions that apply to purchases and transfers on and after February 16, 2021, and subdivision (

d) of

section 2.1 makes the parent–child and grandparent– grandchild transfer exclusions discussed above inop - erative as to any purchase or transfer occurring on or after February 16, 2021. The exclusions provided by subdivision (

c) only apply to purchases or transfers of a family home or family farm and require the prop - erty to continue as the family home or family farm of the transferee. Also, subdivision (

c) provides that the new taxable value of the family home or family farm is the sum of the taxable value of that property, subject to adjustment as authorized by

section 2, de - termined as of the date immediately prior to the date of the purchase by, or transfer to, the transferee (“prior taxable value”), plus the amount by which the value of the family home or family farm exceeds the sum of the prior taxable value and one million dollars. Due to the provisions of subdivisions (

c) and (d), partial parent– child and grandparent–grandchild transfer exclusions may only be allowed on the purchase or transfer of family homes or family farms with an assessed val - ue of over one million dollars. (See www.boe.ca.gov/ prop19/#FAQs for an example of a partial exclusion due to the taxable value calculation.) Also, there is no longer a parent–child or grandparent–grandchild transfer exclusion that applies to the sale or transfer of real property that is not a family home or family farm.

Section 2.2 created the California Fire Response (CFR) Fund and the County Revenue Protection (CRP) Fund in the State Treasury.

Section 2.2 requires the Director of Finance to calculate the additional rev- enues and savings that accrued to the state from the implementation of

section 2.1 during the prior fiscal year ending June 30 on or before September 1, 2022, and each subsequent September 1 thereafter.

Section 2.2 requires the Controller to transfer 75 percent and 15 percent of the amount calculated by the Director of Finance from the General Fund to the CFR Fund and CRP Fund, respectively, by September 15, 2022, and each subsequent September 15 thereafter.

Section 2.2 also continuously appropriates moneys in the CRP Fund for the purposes of reimbursing counties and local agencies that incur a negative gain and paying the Department’s administrative costs, in accordance with

section 2.3 (discussed below). Subdivision (

a) of

section 2.3 requires each coun - ty to annually determine the gain for the county and for each local agency in the county resulting from the implementation of

section 2.1 by adding the following amounts: 1. The revenue increase resulting from the sale and reassessment of original primary residences for outbound intercounty transfers pursuant to sub - division (

b) of

section 2.1; 2. The revenue decrease, which shall be expressed as a negative number, resulting from the transfer of taxable values of original primary residences located in other counties to replacement primary residences located within the county for inbound intercounty transfers pursuant to subdivision (

b) of

section 2.1; and 3. The revenue increase resulting from subdivision (

c) of

section 2.1.

CALIFORNIA REGULATORY NOTICE REGISTER 2022, VOLUME NUMBER 46-Z 1382 So, the gains the counties determine under subdivi - sion (

a) may be positive or negative. Also, subdivision (

a) requires the Department to adopt a regulation pur - suant to

section 2.3 that specifies the date by which the counties annual determinations shall be made. Subdivision (

b) of

section 2.3 makes a county or lo- cal agency in the county that has a positive gain for a determination period, as determined pursuant to sub - division (a), ineligible to receive reimbursement from the CRP Fund for that period. Subdivision (

b) also deems a county or any local agency that has a negative gain for a determination period, as determined pur - suant to subdivision (a), eligible to receive reimburse- ment from the CRP Fund for that period. Subdivision (

f) of

section 2.3 provides that an “eligi- ble local agency” is a county, a city, a city and county, a special district, or a school district as determined pursuant to subdivision (

o) of

Section 42238.02 of the Education Code as it read on January 8, 2020, that has a negative gain as determined pursuant to

section 2.3. Subdivision (

c) of

section 2.3 requires the Department to determine each eligible local agency’s aggregate gain every three years, based on the amounts deter - mined by the counties under subdivision (a), and pro - vide each county and local agency with an aggregate negative gain reimbursement equal to that amount from the CRP Fund. If there is insufficient money in the CRP Fund to cover the total amount of reimburse- ments, subdivision (

c) requires the Department to al - locate a pro rata share of the money in the fund to each county and local agency based on the amount it is eligible to be reimbursed relative to the total amount all the counties and local agencies are eligible to be reimbursed for the aggregation period. Subdivision (

d) of

section 2.3 requires the Control - ler to transfer any remaining balance in the CRP Fund to the General Fund after the Department has reim - bursed each county and local agency that has experi - enced a negative gain during an aggregation period to be available for appropriation for any purpose. Sub - division (

e) of

section 2.3 requires the Department to adopt regulations to implement

section 2.3 pursuant to the rulemaking provisions in the Administrative Pro - cedure Act (APA) (Gov. Code (GC), § 11340 et seq.). The Legislature has not enacted Legislation to further implement

section 2.3. Effect, Objective, and Benefits of the Proposed

Chapter and Regulation The Department determined that

section 2.3 created an issue because it requires the Department to adopt a regulation specifying the date by which each county must annually determine the gain for the county and for each local agency in the county resulting from the implementation of

section 2.1. The Department deter- mined that

section 2.3 created issues because

section 2.3 does not specify the period for which each annual determination shall be made and the provisions of sub- divisions (

c) and (

d) of

section 2.1 became operative in the middle of February 2021, rather than the begin- ning of a month, or a calendar year, or the state’s fis- cal year, which is the same as the fiscal year for prop- erty tax purposes. The Department determined that

section 2.3 also created issues because it requires the Department to determine each eligible county’s and local agency’s aggregate gain every three years, based on the gains determined by the counties, and provide reimbursement to each county and local agency with an aggregate negative gain from the CRP Fund. How- ever, it does not provide procedures for the Depart - ment to obtain the information it needs to make the aggregate gain computations and send reimbursement to the counties and local agencies with an aggregate negative gain every three years.

Also, it does not spec- ify when the Department will make the aggregate gain computations, determine if there is sufficient money in the CRP Fund to fully reimbursement the counties and local agencies with an aggregate negative gain, and then provide full or pro rata reimbursement from the CRP Fund. As a result, the Department drafted new

chapter 5 to be added to division 5 of title 18 of the CCR and Regulation 35401 to be included in new

chapter 5 to have the effect and accomplish the objec- tive of addressing these issues. As further explained below, proposed Regulation 35401: ● Requires each county to register with the Department to report the gains it is required to annually determine for the county and each local agency in the county under subdivision (

a) of sec- tion 2.3; ● Clarifies the determination periods for which the gains shall annually be determined under subdi - vision (

a) of

section 2.3; ● Specifies the dates by which the gains shall annu- ally be determined as required by subdivision (

a) of

section 2.3; ● Requires each county to report the gains it annu- ally determines under subdivision (

a) of

section 2.3 to the Department by specified reporting due dates every three years; and ● Clarifies how the Department will use the gains reported by the counties to determine each coun - ty’s and local agency’s aggregate gain every three years and provide reimbursement to each county and local agency with an aggregate negative gain from the money in the CRP Fund under subdivi - sion (

c) of

section 2.3. In addition, Department recognizes that

section 2.3 created additional issues for the counties because it requires each county to determine specified prop- erty tax revenue increases and decreases to annual - ly determine the gain for the county and each local

CALIFORNIA REGULATORY NOTICE REGISTER 2022, VOLUME NUMBER 46-Z 1383 agency in the county. However, it does not impose that requirement on any specific part or parts of each coun- ty’s government (e.g., Assessor, Auditor–Controller, Board of Supervisors) and it does not clarify how each county is supposed to calculate the specified property tax revenue increases and decreases for the county and each local agency in the county. The Department is not aware of any other law that addresses those issues, and it appears that each county will annually require detailed information from their Assessor’s office about

section 2.1’s impacts on adjusted base year values and detailed information from the office of their Auditor– Controller, Auditor and Controller, Controller, or Di - rector of Finance about how those impacts on adjusted base year values affect the property tax revenues for the county and each local agency in the county to de - termine gains under

section 2.3. Furthermore, the State Board of Equalization as - sesses state–assessed property for property taxes pur - poses (Cal. Const., art. XIII, § 19), prescribes rules and regulations to govern county assessors when as - sessing property taxes (GC, § 15606), and conducts surveys of the county assessors’ assessment practices (GC, § 15640 et seq.).

The Controller’s office meets with the county auditors at the Annual State Control - ler’s Conference with County Auditors ( https://www. sco.ca.gov/ard_state_controllers_conference_with_ county_auditors.html ) “for the purpose of discussion of problems dealing with county budget procedure, reporting of financial transactions of the counties, al- location of property tax revenues, including the Spe - cial District Augmentation Fund, and to promote uni - formity of procedure in all matters pertaining to the duties of county auditors, throughout the state.” (GC, § 12422.) However, the Department does not have a role in the administration of property taxes.

As a result, the Department held an interested par - ties meeting on May 21, 2021, to discuss general is - sues related to

section 2.3 with the counties. The De - partment conducted surveys with the counties in May 2021 and January 2022 so the Department could an - swer questions related to proposed Regulation 35401 and the counties’ initial questions about how to cal - culate gains under

section 2.3 based on the general consensus drawn from the counties’ survey responses. The Department also posted a Proposition 19 guide on its website ( www.cdtfa.ca.gov/taxes–and–fees/ Prop–19–Home–Protection–Act.htm#Overview) that provides background information about Proposition 19, the counties’ duties to annually determine gains under

section 2.3, answers to frequently asked ques - tions about calculating and reporting gains that are based on the responses from the surveys, and the re - sults of both surveys. However, the Department is not planning to send additional surveys to the counties and cannot provide further guidance about how the counties should calculate gains under

section 2.3 at this time. The Department also recommends that the counties contact the California Assessors Association and/or California State Association of County Audi - tors if they have new questions about how to calculate gains that are not addressed in the guide, and work with those associations to establish uniform answers to those questions. Proposed Regulation 35401 Subdivision (

a) of proposed Regulation 35401 de - fines important terms used in the regulation, includ- ing “contact information,” “county,” “County Reve - nue Protection Fund Account,” “Department,” “fiscal year,” “gain,” “identifying information,” “local agen- cy,” “negative gain,” “representative information,” and “state holiday.” Subdivision (

a) clarifies that the term “county,” as used in the proposed regulation, is limited to a county in this state because only coun - ties in this state are required to calculate gains under subdivision (

a) of

section 2.3, and that the term “coun- ty” includes a “city and county,” as provided in GC

section 19, to avoid confusion. Subdivision (

a) clarifies that the term “fiscal year,” as used in the proposed reg- ulation, means a one–year period beginning on July 1 and ending on June 30 because fiscal years can be- gin and end on different dates for different purposes and that is the fiscal year for property tax purposes. (RTC, § 75.6.) Subdivision (

a) clarifies that the term “gain,” as used in the proposed regulation, means the amount determined by adding the revenue increases and decreases specified in subdivision (

a) of

section 2.3, rounded to the nearest whole dollar, and that the term “negative gain,” as used in the proposed regula - tion, means a gain that is less than zero. Subdivision (

a) clarifies that the term “local agency” means a city, a special district, or a school district as determined pursuant to subdivision (

o) of

section 42238.02 of the Education Code as that subdivision read on January 8, 2020, based on the definition of eligible local agency in subdivision (

f) of

section 2.3. Subdivision (

a) also clarifies that the term “state holiday,” as used in the proposed regulation, means a state holiday listed in GC

section 6700, including every Sunday. Subdivision (

b) of proposed Regulation 35401 in - corporates the requirement that each county annually determine the gain for the county and each local agen- cy in the county from subdivision (

a) of

section 2.3. It also clarifies that a negative gain shall be expressed as a negative number. Subdivision (

c) of proposed Regulation 35401 re - quires each county to electronically register for a County Revenue Protection Fund Account through the Department’s online services portal, and provide its “contact information,” as defined in subdivision (a), which includes the information the Department needs to identify and communicate with the county’s autho-

CALIFORNIA REGULATORY NOTICE REGISTER 2022, VOLUME NUMBER 46-Z 1384 rized representatives, and the counties “identifying information,” as defined in subdivision (a), which in- cludes the information the Department needs to specif- ically identify and reimburse the county and each lo - cal agency in the county. Subdivision (

c) also requires each county to update their registration information in a reasonable and timely manner. The Department de - termined that it is necessary for each county to register with the Department for a County Revenue Protection Fund Account so that each county can report the gains it determines under subdivision (

a) of

section 2.3 to the Department and the Department can use the gains to determine each county’s and local agency’s aggre- gate gain every three years, as required by subdivision (

c) of

section 2.3. The Department determined that, as part of the registration process, it is necessary for each county to provide the information the Department needs to specifically identify the county and each local agency in the county, identify and communicate with each county’s authorized representatives, and send re- imbursement to the counties and local agencies with aggregate negative gains. The Department also deter - mined it would be more effective and efficient for the counties to register through the Department’s online services portal, than complete and submit hard copy forms.

Subdivision (d)(1) of proposed Regulation 35401 clarifies that the initial determination period is the period beginning on February 16, 2021, and ending on June 30, 2022, as suggested in a response to the Department’s May 2021 survey, and each subsequent determination period is a fiscal year beginning July 1 and ending on June 30, commencing with the fiscal year beginning on July 1, 2022, and ending on June 30, 2023. (The responses to the May 2021 survey are available at www.cdtfa.ca.gov/formspubs/cdtfa814. pdf.) There are no provisions in

section 2.3 that spec - ify which periods’ revenue should be included in the counties’ annual determinations. However, subdivi - sion (

a) of

section 2.3 requires each county to include the revenue increases from

section 2.1’s limitations on the parent–child and grandparent–grandchild trans - fer exclusions, which became operative February 16, 2021, in its annual determinations. Therefore, the Department determined that it is necessary for the counties’ initial determination period to begin on February 16, 2021.

Also, the Department understands that property tax is assessed on a fiscal–year basis, counties determine their property tax revenue using a fiscal year that begins on July 1 and ends on June 30, and a substantial majority of the counties that re - sponded to the Department’s survey would prefer that their annual determinations be made using the same fiscal year periods.

The Department recognizes that the intent of sections 2.2 and 2.3, when read together, was for the Department to issue its first reimburse- ments to the eligible counties and local agencies after the Director of Finance has calculated the additional revenues and savings that accrued to the state from the implementation of

section 2.1 for three consecu - tive fiscal years, beginning with the fiscal year ending on June 30, 2022, and the Controller has transferred 15 percent of that money into the CRP fund. The Depart- ment also recognizes that the intent of sections 2.2 and 2.3 was for the first reimbursements to compensate the counties and local agencies with aggregate negative gains for their revenue losses from the implementation of

section 2.1 for the same fiscal years. Therefore, the Department determined that it is necessary for the end of the counties’ initial determination period to coin - cide with the end of the fiscal year ending on June 30, 2022, and for each subsequent determination period to be a fiscal year that begins on July 1 and ends on June 30. Subdivisions (d)(2) of proposed Regulation 35401 specifies the date by which the counties annual de- terminations shall be made in accordance with subdi - vision (

a) of

section 2.3. It provides that on or before January 31, 2023, each county shall determine the gain for the county and each local agency in the coun- ty for the initial determination period ending on June 30, 2022. It also provides that on or before January 31, 2024, and each subsequent January 31 each county shall determine the gain for the county and each lo - cal agency in the county for the determination period ending on the preceding June 30.

Also, subdivision (d)(3) of Regulation 35401 clarifies that if any January 31 specified in subdivision (d)(2) falls on a Saturday or state holiday, then each county shall determine the gain for the county and each local agency in the coun- ty on or before the next business day following that January 31. The Department’s May 2021 survey asked the counties when the due date should be for them to determine the gain for the county and each local agency in the county for the prior fiscal year ending June 30 so the Department could identify a reasonable due date that would be the least burdensome for all the counties.

The counties’ responses indicated that it would be feasible for them to make their determina - tions for the prior fiscal year ending on June 30 by the following January 31, if not sooner. Therefore, the Department determined that an annual determination date of January 31 is reasonable and will provide the counties sufficient time to obtain the necessary data to make their determinations for the determination peri - od ending on the preceding June 30. Also, when the last day to perform

an act falls on a Saturday or state holiday, California law generally permits that act to be performed on the next business day (see, e.g., GC, § 6707). Therefore, the Department determined that it is reasonable to allow the counties to make their deter- minations on the next business day when the last day

CALIFORNIA REGULATORY NOTICE REGISTER 2022, VOLUME NUMBER 46-Z 1385 to make their determinations falls on a Saturday or state holiday, including a Sunday. Subdivision (

e) of proposed Regulation 35401 per - mits a county to change any gain timely determined under subdivision (d)(2) for any reason before the gain is required to be reported to the Department. The De - partment understands that subdivision (

a) of

section 2.3 requires the counties to make their annual deter - minations based upon the data available on or before each determination date. The Department also under - stands that there may be situations where a county wants to correct errors in or otherwise update the gain determined for a county or local agency before it is reported to the Department and used to calculate the county’s or local agency’s aggregate gain. Therefore, the Department determined that it is reasonable to allow the counties to make changes to timely deter - mined gains before they are required to be reported.

Also, the Department’s original draft of Regulation 35401 only permitted a county to correct errors in or update a gain timely determined under subdivision (d)(2) based on more accurate or current information. The Department discussed that draft with the counties during an interested parties meeting on September 8, 2021, and some counties indicated that they thought the reference to correcting errors was intended to re - fer to making assessment roll corrections for property tax purposes.

Therefore, the Department reconsidered the proposed language and determined that it is nec - essary to allow the counties to change their timely de- termined gains for any reason to avoid confusion and ensure that any issues with a timely determined gain may be addressed before that gain is required to be reported to the Department.

Subdivision (f)(1) of proposed Regulation 35401 generally requires each county to report the gains for the county and each local agency in the county for each of the three preceding determination periods, through the Department’s online services portal, on or before January 31, 2025, and every third January 31 thereafter, beginning with January 31, 2028. Subdivi - sion (f)(1) includes an example to illustrate the report- ing dues dates.

Also, subdivision (f)(2) of the proposed regulation clarifies that the Department will not ac- cept any gain, unless it is reported through the De - partment’s online services portal before the expiration of any extensions of the reporting due granted by the Department. The Department’s May 2021 survey also asked the counties when the due date should be for them to report the gains for the county and each local agency in the county for the prior fiscal year ending June 30 so the Department could identify a reasonable reporting due date that would be the least burdensome for all the counties.

The counties’ responses indicated that it would also be feasible for them to report the gains for the prior fiscal year ending on June 30 by the following January 31, if not sooner. However, the De- partment only needs the counties to report their gains after the end of each aggregation period so that the Department can use them to calculates each county’s and local agency’s aggregate gain.

Therefore, the De- partment determined that it would be less burdensome for the counties to report their gains for the same ag - gregation period at one time, rather than three sepa - rate times, and that allowing them to do so gives the counties additional time to change their timely deter - mined gains for the first two determination periods in each aggregation period before they are required to be reported to the Department. Subdivision (g)(1) of proposed Regulation 35401 automatically grants each county a one–month exten - sion of the reporting due date specified in subdivision f)(1).

There are provisions that allow the Department to grant extensions for good cause in many of the tax and fee laws administered by the Department, includ - ing RTC

section 6459 in the Sales and Use Law. Also,

section 535.050 of the Department’s Compliance Pol- icy and Procedures Manual specifies, in part, that “a general one–month extension, pursuant to RTC

section 6459, is granted to all municipalities, school districts and other political subdivisions of this state.” There - fore, the Department determined that is it reasonable to provide a similar automatic one–month extension of the deadline for the counties to report their gains to the Department to be consistent with Department’s existing policies. Subdivisions (g)(2) of proposed Regulation 35401 provides for the Department to grant any county an extension of the reporting due date specified in sub- division (f)(1) to the following April 30 if a state of emergency due to a disaster, as proclaimed by the Governor pursuant to GC

section 8625, is in effect in the county at any time during the two–month period from the January 1 immediately preceding the re - porting due date specified in subdivision (f)(1) to the extended reporting due date specified in subdivision (g)(1). It also provides that such an extension shall be granted if a request therefor is electronically filed with the Department on or before the April 30 following the reporting due date specified in subdivision (f)(1).

The Department recognizes that there may be states of emergency due to disasters that could potentially prevent affected counties from reporting their gains for an aggregation period by the January 31 report - ing deadline, as automatically extended for one month by subdivision (g)(1). Therefore, subdivision (f)(2) of the proposed regulation provides an additional exten - sion of the reporting due date specified in subdivision (f)(1) to help ensure that counties have enough time to report their gains, and no counties or local agencies are unnecessarily denied reimbursement.

CALIFORNIA REGULATORY NOTICE REGISTER 2022, VOLUME NUMBER 46-Z 1386 Subdivision (g)(3) of proposed Regulation 35401 also clarifies that if the date by which a county is re- quired to report gains, including any extensions of that due date under subdivisions (g)(1) and (2), falls on a Saturday or state holiday, then the Department shall automatically grant the county an extension to the next business day to report the gains.

The Department determined that it is reasonable to allow the counties to report their gains on the next business day when the last day to report their gains falls on a Saturday or state holiday, including a Sunday, for the same rea- son the Department determined that it is reasonable to allow the counties to make their determinations on the next business day when the last day to make their determinations falls on a Saturday or state holiday, in- cluding a Sunday. Subdivision (h)(1)(

A) of proposed Regulation 35401 provides that on May 5, 2025, and on each May 5 ev - ery three years thereafter, the Department shall deter - mine each county’s and each local agency’s aggregate gain, by combining the gains determined by the coun- ties and timely reported to the Department for each of the three preceding determination periods. It also clar- ifies that each county and local agency with an aggre- gate negative gain shall be eligible to be reimbursed an amount equal to its aggregate negative gain expressed as a positive number for that three–year aggregation period.

For example, if a local agency’s aggregate gain was negative one hundred dollars (–$100) for an aggregation period, then the local agency would be eligible to be reimbursed one hundred dollars ($100) for that period.

The Department recognizes that the general intent of sections 2.2 and 2.3 was for the Con- troller to make three annual transfers from the gener - al fund to the CRP fund before the Department uses the money in the CRP fund to reimburse the counties and local agencies with an aggregate negative gain for an aggregation period; for the Controller to return any money in the CRP fund to the general fund after the Department has reimbursed the counties and local agencies with an aggregate negative gain for the first aggregation period; and for the whole process to start over with new annual transfers into the fund for pur - poses of reimbursing the counties and local agencies with an aggregate negative gain for the next aggrega - tion period.

The Department also recognizes that on September 15, 2024, and each September 15 every three years thereafter, all the money available for the Department to provide reimbursement or proportional reimbursement to the counties and local agencies with