Time- Dated Material GAVIN NEWSOM, GOVERNOR OFFICE OF ADMINISTRATIVE LAW California Regulatory Notice Register REGISTER 2024, NUMBER 33–Z PUBLISHED WEEKLY BY THE OFFICE OF ADMINISTRATIVE LAW AUGUST 16, 2024 PROPOSED ACTION ON REGULATIONS TITLE 2. DEPARTMENT OF HUMAN RESOURCES Bi–Weekly Payroll Cycle — Notice File Number Z2024–0801–02 ......................................... 1025 TITLE 2. FAIR POLITICAL PRACTICES COMMISSION Conflict–of–Interest Code — Notice File Number Z2024–0806–04 ........................................ 1027 AMENDMENT STATE AGENCY: Department of Conservation TITLE 3.

DEPARTMENT OF FOOD AND AGRICULTURE Livestock Identification Modified Point of Origin Inspection — Notice File Number Z2024–0806–02 ............. 1028 TITLE 3. DEPARTMENT OF FOOD AND AGRICULTURE Mobile Custom Livestock Slaughter — Notice File Number Z2024–0806–03 ................................ 1032 TITLE 10. FILM COMMISSION California Film and Television Tax Credit Program 4.0 — Notice File Number Z2024–0806–06 ................ 1039 TITLE 10. DEPARTMENT OF INSURANCE Catastrophe Modeling and Rulemaking — Notice File Number Z2024–0806–05 ............................. 1043 TITLE 11.

COMMISSION ON PEACE OFFICER STANDARDS AND TRAINING Basic Course Work Sample Test Battery Proctor Manual, Amend Commission Regulations 1005, 1007, 1008, 1059 — Notice File Number Z2024–0729–02 .................................................... 1050 TITLE 11. COMMISSION ON PEACE OFFICER STANDARDS AND TRAINING Minimum Training Standards for Instructors, Amend Commission Regulations 1001, 1070, 1082 — Notice File Number Z2024–0730–07 ................................................................ 1052 (Continued on next page)

TITLE 11. COMMISSION ON PEACE OFFICER STANDARDS AND TRAINING Training and Testing Specifications for Peace Officers Basic Courses, Amend Commission Regulations 1005, 1007, 1008 — Learning Domain 1 — Notice File Number Z2024–0729–03 ............................ 1054 TITLE 13. DEPARTMENT OF MOTOR VEHICLES Vision Test — Notice File Number Z2024–0801–01 .................................................... 1056 TITLE 14.

DEPARTMENT OF FISH AND WILDLIFE Scientific Collection Permits (SCP) Terrestrial & Vernal Pool Invert List 2024 — Notice File Number Z2024–0806–07 ................................................................................ 1059 TITLE 15. DEPARTMENT OF CORRECTIONS AND REHABILITATION Computer Voice Stress Analyzer Examinations — Notice File Number Z2024–0726–04. . . . . . . . . . . . . . . . . . . . . . . . 1063 TITLE 15.

DEPARTMENT OF CORRECTIONS AND REHABILITATION Tuberculosis Program — Notice File Number Z2024–0726–02 ........................................... 1066 GENERAL PUBLIC INTEREST DEPARTMENT OF FISH AND WILDLIFE CESA Consistency Determination Request for Los Robles Ranch 2089–2024–002–05, Santa Barbara County ........................................................................... 1068 DEPARTMENT OF FISH AND WILDLIFE Consistency Determination Request for Tenmile Creek Sediment Source Control — Varnhagen Meadow Project (Tracking Number: 1653–2024–143–001–R1), Mendocino County ................. 1069

SUMMARY OF REGULATORY ACTIONS Regulations filed with Secretary of State ............................................................. 1069 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 $338.00 (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 2024, VOLUME NUMBER 33–Z 1025 PROPOSED ACTION ON REGULATIONS Information contained in this document is published as received from agencies and is not edited by Thomson Reuters. TITLE 2. DEPARTMENT OF HUMAN RESOURCES The California Department of Human Resources (CalHR) proposes to amend the regulations described below after considering all comments, objections, and recommendations. I. PUBLIC HEARING CalHR has not scheduled a public hearing on this proposed action.

However, CalHR will hold a hear - ing if it receives a written request for a public hearing from any interested person, or his or her authorized representative, no later than 15 days before the close of the written comment period. II. WRITTEN COMMENT PERIOD Any interested person, or his or her authorized rep - resentative, may submit written comments relevant to the proposed regulatory action to CalHR. Comments may also be submitted by facsimile (FAX) at (916) 327–1885 or by email to the Contact Person(

s) listed below. Comments may also be submitted by mail to the Contact Person(

s) listed below. The written com - ment period closes at 12:00 a.m. on October 1, 2024. CalHR will only consider comments received at CalHR’s office by that time. Submit comments to the following address: Nicholas Wehr, Assistant Project Director California Department of Human Resources 1515 S Street, North Building, Suite 500 Sacramento, CA 95811 Telephone: 916–216–9002 Email: csps.project@calhr.ca.gov III. AUTHORITY AND REFERENCE Government Code (GC)

section 19815.4 authoriz - es CalHR to formulate, adopt, amend, or repeal rules, and regulations affecting the purposes, responsibili - ties and jurisdiction of the department that are consis - tent with the law and necessary for administration of its programs. Furthermore, the proposed amendments within this action are required to implement GC sec - tion 19824. IV. INFORMATIVE DIGEST/POLICY STATEMENT OVERVIEW CalHR seeks approval to enact a new California Code of Regulation (CCR) and amend multiple regu - lations to implement GC

section 19824 as amended in 2023 by Assembly Bill 130 (Chapter 39). This

section stipulates that state officers and employees’ salaries shall be paid from the General Fund or relevant State fund, adhering to a uniform payroll cycle established by the department. These amendments are crucial to support the California State Payroll System (CSPS) project, which aims to transition the current monthly payroll cycle to a biweekly schedule. This regulatory package proposes to amend, add or delete regulations to be in alignment with CSPS requirements.

CalHR, in collaboration with the State Controller’s Office (SCO), is undertaking the CSPS Project to re - place outdated payroll systems across the state. This initiative aims to modernize human resource man - agement, travel and business expenses, and payroll services for approximately 300,000 state govern - ment employees. The project encompasses six prima - ry capabilities: Personnel Administration, Benefits Administration, Time and Attendance Administration, Payroll processing, Position Control Administration, and Travel and Business Expense management.

Maintaining the existing monthly payroll cycle, based on a unique 21/22 workday pattern repeat - ing over a 28–year cycle, is neither feasible nor cost– effective. Most modern commercial off–the–shelf solutions support biweekly payroll cycles, unlike the state’s outdated approach requiring extensive customization. Following consultations with bargaining units, the CSPS Executive Steering Committee, and oth - er stakeholders, it has been decided that all state de - partments and employees will transition to a standard- ized biweekly payroll cycle with the implementation of CSPS.

This change aims to improve efficiency, ac - curacy, and service delivery across state payroll oper - ations, aligning with modern standards in human re - sources and payroll management. V. EVALUATION OF INCONSISTENCY/ INCOMPATIBILITY WITH EXISTING STATE REGULATIONS CalHR evaluated whether or not the proposed amendment is inconsistent or incompatible with ex - isting state regulations. With the amendment of GC 19824 that was enacted in 2023, it became pertinent to update all payroll–related regulations. Therefore, the

CALIFORNIA REGULATORY NOTICE REGISTER 2024, VOLUME NUMBER 33–Z 1026 proposed amendments are not inconsistent nor incom- patible with other existing state regulations. VI. ANTICIPATED BENEFITS FROM THIS PROPOSED REGULATION The proposed regulation provides governance to - ward existing and future payroll–related activities that supports departments remaining on the monthly pay - roll cycle awaiting their transition date to CSPS, in ad- dition to departments already converted to a biweek - ly cycle. VII. DISCLOSURES REGARDING THE PROPOSED ACTION CalHR has made the following initial determinations: 1.

Mandate on local agencies and school districts : None. 2. Cost or savings to any state agency: The CSPS Project and its accompanying budget has been approved assuming a biweekly payroll cycle will be used. As such, this proposal aligns with the ap- proved CSPS Project scope and associated budget and does not create additional fiscal impact above and beyond the existing CSPS Project budget. 3. Cost to any local agency or school district, which must be reimbursed in accordance with Govern - ment Code sections 17500 through 17630: None. 4. Other nondiscretionary costs or savings imposed on local agencies: None. 5.

Cost or savings in federal funding to the state: None. 6. Significant, statewide adverse economic impact directly affecting business, including the ability of California businesses to compete with busi - nesses in other states: None 7. Cost impacts on representative private person or business: CalHR is not aware of any cost im - pacts that a representative private person or busi- ness would necessarily incur in reasonable com - pliance with the proposed action. 8. Results of the Economic Impact Assessment/ Analysis: Adoption of these regulations will not: a. Create or eliminate jobs within California. b.

Create new businesses or eliminate existing busi- nesses within California; or c. Affect the expansion of businesses currently do - ing business within California. d. Create new benefits to worker safety and the state’s environment. Adoption of these regulations will: e. Provide benefits to the health and welfare of Cal- ifornia residents, including to state employees who will receive their salaries on a more frequent

schedule and to state employers who will be pro- vided clear direction in establishing an updat - ed, more modern payroll cycle, which, as stated above, will align the state with modern standards of human resources and payroll management. 9. Significant effect on housing costs: None. 10. Small Business Impact: The proposed regulations will not affect small businesses because the appli- cability of the proposed regulations are confined to State civil service employees and appointing authorities.

These regulations outline the admin - istration of compensation and benefits for state employees and as such have no impact on the small business community. VIII. CONSIDERATION OF ALTERNATIVES In accordance with GC

section 11346.5, subdivision (a) (13), CalHR must determine that no reasonable al - ternative considered, or that has otherwise been iden - tified and brought to the attention of agency, would be more effective in carrying out the purpose for which the action is proposed; or would be as effective and less burdensome to affected private persons; or would be more cost–effective to affected private persons and equally effective in implementing the statutory policy or other provision of law than the proposed described in this Notice.

CalHR invites interested people to pres- ent statements or arguments with respect to alterna - tives to the proposed regulation at the hearing, if one is requested, or during the written comment period. IX.

CONTACT PERSONS Inquiries concerning the proposed administrative action may be directed to: Nicholas Wehr, Assistant Project Director California Department of Human Resources 1515 S Street, North Building, Suite 500 Sacramento, CA 95811 Telephone: 916–216–9002 Email: csps.project@calhr.ca.gov The backup contact person for these inquiries is: Jodi LeFebre, Assistant Deputy Director, Legislative California Department of Human Resources 1515 S Street, North Building, Suite 500 Sacramento, CA 95811 Telephone: 916–909–3297 Email: jodi.lefebre@calhr.ca.gov

CALIFORNIA REGULATORY NOTICE REGISTER 2024, VOLUME NUMBER 33–Z 1027 Please direct requests for copies of the proposed text (the “express terms”) of the regulation, the ini - tial statement of reasons, the modified text of the reg - ulation, if any, or other information upon which the rulemaking is based to these Contact Person(

s) at the above address. X. AVAILABILITY OF THE STATEMENT OF REASONS, TEXT OF PROPOSED REGULATIONS, AND RULEMAKING FILE CalHR will have the entire rulemaking file available for inspection and copying throughout the rulemaking process at its office at the above address during nor - mal business hours. As of the date this notice is pub - lished, the rulemaking file consists of this notice, the proposed text of the regulation, and the initial state - ment of reasons. XI.

AVAILABILITY OF CHANGED OR MODIFIED TEXT After considering all timely and relevant comments received, CalHR may adopt the proposed amendment to the regulation as described in this notice. If CalHR makes modifications that are sufficiently related to the originally proposed text, it will make the modified text (with the changes clearly indicated) availability to the public and will submit a copy to anyone who has sub- mitted a written comment, for at least 15 days before CalHR adopts the regulation as revised. Please send requests for copies of any modified regulation to the attention of the Contact Person(

s) at the address indi - cated above. CalHR will accept written comments on the modified regulation for 15 days after the date on which they are made available. XII. AVAILABILITY OF THE FINAL STATEMENT OF REASONS Upon its completion, copies of the Final Statement of Reasons may be obtained via the Contact Person(

s) at the above address. XIII. AVAILABILITY OF DOCUMENTS ON THE INTERNET Copies of the Notice of Proposed Action, the Initial Statement of Reasons, and the text of the regulation in underline and strike out can be accessed through our website at www.calhr.ca.gov. TITLE 2.

FAIR POLITICAL PRACTICES COMMISSION NOTICE IS HEREBY GIVEN that the Fair Political Practices Commission, pursuant to the authority vest - ed in it by Sections 82011, 87303, and 87304 of the Government Code to review proposed conflict–of– interest codes, will review the amended conflict–of–interest codes of the following: CONFLICT–OF–INTEREST CODES AMENDMENT STATE AGENCY: Department of Conservation A written comment period has been established commencing on August 16, 2024, and closing on September 30, 2024.

Written comments should be directed to the Fair Political Practices Commission, Attention Belen Cisneros, 1102 Q Street, Suite 3050, Sacramento, California 95811. At the end of the 45–day comment period, the pro - posed conflict–of–interest code will be submitted to the Commission’s Executive Director for their review, unless any interested person or their duly authorized representative requests, no later than 15 days prior to the close of the written comment period, a public hear- ing before the full Commission. If a public hearing is requested, the proposed code will be submitted to the Commission for review.

The Executive Director of the Commission will re - view the above–referenced conflict–of–interest code, proposed pursuant to Government Code

Section 87300, which designate, pursuant to Government Code

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

Any written com - ments must be received no later than September 30, 2024. If a public hearing is to be held, oral comments may be presented to the Commission at the hearing. COST TO LOCAL AGENCIES There shall be no reimbursement for any new or increased costs to local government which may re - sult from compliance with these codes because these are not new programs mandated on local agencies by

CALIFORNIA REGULATORY NOTICE REGISTER 2024, VOLUME NUMBER 33–Z 1028 the codes since the requirements described herein were mandated by the Political Reform Act of 1974. Therefore, they are not “costs mandated by the state” as defined in Government Code

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

REFERENCE Government Code Sections 87300 and 87306 pro - vide that agencies shall adopt and promulgate conflict– of–interest codes pursuant to the Political Reform Act and amend their codes when change is necessitated by changed circumstances. CONTACT Any inquiries concerning the proposed conflict– of–interest code should be made to Belen Cisneros, Fair Political Practices Commission, 1102 Q Street, Suite 3050, Sacramento, California 95811, or email bcisneros@fppc.ca.gov.

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 Commission should be made to Belen Cisneros, Fair Political Practices Commission, 1102 Q Street, Suite 3050, Sacramento, California 95811, or email bcisneros@fppc.ca.gov. TITLE 3.

DEPARTMENT OF FOOD AND AGRICULTURE BUREAU OF LIVESTOCK IDENTIFICATION MODIFIED POINT OF ORIGIN INSPECTION AREAS NOTICE IS HEREBY GIVEN that the Department of Food and Agriculture (herein after re - ferred to as “Department”) proposes to adopt the reg - ulations described below in the Informative Digest/ Policy Statement Overview after considering all com- ments, objections, and recommendations regarding this proposal. Publication of this notice commences a 45–day public comment period. PUBLIC HEARING The Department has not scheduled a public hearing for this proposal.

However, a public hearing will be held if the Department receives a written request for a public hearing from any interested person, or his or her authorized representative, no later than 15 days be- fore the close of the written comment period. 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 Department. Comments can be submitted via email to john.suther@ cdfa.ca.gov, or mailed to the address listed below. The written comment period begins on August 16, 2024 and closes September 30, 2024.

The Department is not required to respond to comments that are outside the scope of this Notice or comments that are not received or postmarked during the written comment period. WRITTEN COMMENTS AND REQUEST FOR PUBLIC HEARING All written comments and any requests for a pub - lic hearing should be directed to the following person: John Suther, Branch Chief Department of Food and Agriculture Animal Health and Food Safety Services Bureau of Livestock Identification 1220 N Street, Sacramento, CA 95814 Telephone (916) 900–5006 Email: john.suther@cdfa.ca.gov

CALIFORNIA REGULATORY NOTICE REGISTER 2024, VOLUME NUMBER 33–Z 1029 AUTHORITY AND REFERENCE Pursuant to the authority vested by sections 407, 20171 and 21111, Food and Agricultural Code, and to implement, interpret or make specific sections 20017, 20021 and 21111, Food and Agricultural Code, the Department is proposing to amend

section 850 of

Article 1,

Chapter 3, Division 2, of Title 3 of the California Code of Regulations, as described in the Informative Digest/Policy Statement Overview. INFORMATIVE DIGEST/POLICY STATEMENT OVERVIEW Existing law,

section 20017 of the Food and Agricultural Code, defines a modified point–of– origin (MPO) inspection area as meaning any area in the state designated by regulation, pursuant to

section 21111. Existing law,

section 21051 of the Food and Agricultural Code, authorizes the Department’s Bureau of Livestock Identification to inspect all cattle sold, transferred, moved out of state, moved out of an MPO inspection area, moved into a registered feed - lot, public auction yard or sales yard, public or private sales market, out of a full point–of–origin inspection area, or from areas designated as quarantine, restrict - ed, or isolated areas, with limited exceptions. Existing law,

section 21111 of the Food and Agricultural Code, specifies that the Secretary, by regulation, shall establish and maintain an MPO in - spection area whenever cattle producers owning cattle in the affected area requires the action by a two–thirds vote of those cattle producers, who are either property taxpayers, lessees, or residents of the affected area and who are present at a public hearing held at a central lo- cation in the area. Existing law,

section 21111.5 of the Food and Agricultural Code, specifies that cattle producers owning cattle in the affected area may, upon written request or petition signed by at least 25 cattle pro - ducers owning cattle in that area, request that the Secretary repeal regulations establishing an MPO in - spection area pursuant to

section 21111 in the man - ner prescribed by the Administrative Procedure Act (Chapter 3.5 (commencing with

section 11340) of

Part 1 of Division 3 of Title 2 of the Government Code). Existing law,

section 21112 of the Food and Agricultural Code, specifies that an MPO inspection area may consist of one or more counties or geograph- ical areas. Existing law,

section 21172.2 specifies that the Department may, by regulation, provide that any per - son who ships any cattle from an MPO inspection area for inspection at destination, is required to notify the local brand inspector prior to shipment of such cattle, if he finds, following a public hearing in the area, such requirement is needed to protect cattle owners from losses by theft or straying of their livestock. Existing law,

section 20021 of the Food and Agricultural Code, specifies that an MPO inspec - tion area as provided in sections 21111 and 21112, per- tains only to the inspection of cattle where there is no sale within a designated MPO inspection area prior to transportation for pasture–to–pasture purposes when crossing the area boundary. Existing law,

section 21288 of the Food and Agricultural Code, specifies that in a modified point– of–origin inspection area, as provided in

section 21111, the fee for the inspection of cattle, other than suckling calves that are accompanying their mothers, is $1.50 per head if the cattle are transported out of the area for purposes other than sale or slaughter and no change of ownership is involved. To implement the above sections of law, the Department has in place regulations under Articles 1–4 of

Chapter 3, Division 2, of Title 3 of the California Code of Regulations. This proposal pertains to

section 850 of

Article 1,

Chapter 3, Division 2 of Title 3 of the California Code of Regulations, which describes the MPO inspection areas within California as designated by Areas 1 and 2. This proposal will remove Area #1 San Luis Obispo County from regulation

section 850 because of a petition and vote from cattle producers in that county. Anticipated Benefits of the Proposal This proposal benefits the cattle producers in San Luis Obispo County that have voted to remove their county as an MPO inspection area as specified in

section 850 of Title 3 of the California Code of Regulations. This will eliminate the need for a brand inspector to be called to the county to conduct a brand inspection when commingled cattle are moved out of the area by the owner or manager of the cattle. The reason for this is that cattle producers in San Luis Obispo County have not been experiencing significant loss of cattle in their county and therefore, brand in - spections to determine ownership is no longer needed except when otherwise specified by existing statutes or regulations.

When the cattle producers in the area need to ship the cattle to another location, the delay and cost of waiting for a brand inspector is not war - ranted. The Department inspects approximately 6,738 head of cattle annually in San Luis Obispo County at a cost to cattle producers of $1.50 per head. The cat - tle producers in the area will be saving over $10,310 in brand inspection fees annually with the deletion of their county as an MPO inspection area.

Consistency and Compatibility with Existing State Regulations The Department has evaluated this proposal and it is not inconsistent or incompatible with existing state

CALIFORNIA REGULATORY NOTICE REGISTER 2024, VOLUME NUMBER 33–Z 1030 regulations. It pertains to cattle brand inspections in San Luis Obispo County. Material Relied Upon in Preparing Regulations 1. Petition dated February 16, 2022 from the San Luis Obispo County Cattlemen’s Association. 2. Response to the petitioner dated February 23, 2022 from the Bureau of Livestock Identification, accepting the petition. 3. April 12, 2022, San Luis Obispo County Cattle - men’s Association public meeting notice for the vote on whether to remove Area #1 San Luis Obispo County as an MPO inspection area. 4.

April 12, 2022 tally and voting sheets showing 51 were in favor of removing Area #1 San Luis Obis- po County as an MPO inspection area and 2 were against. 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. Nondiscretionary Costs/Savings to Local Agencies: None. Local Mandate: None. Cost to Any Local Agency or School District for Which Government Code Sections 17500 et seq. Require Reimbursement: None.

Business Impact: The Department has made an ini - tial determination that the proposed regulatory action will have no significant statewide adverse economic impact directly affecting California businesses, in - cluding the ability of California businesses to compete with businesses in other states. This determination is based on the fact that the proposal is necessary be - cause cattle producers in San Luis Obispo County have voted to remove their county as an MPO inspec- tion area as specified in

section 850 of Title 3 of the California Code of Regulations, in accordance with

section 21111.5 of the Food and Agricultural Code. Cost Impacts on Representative Private Persons or Businesses: The Department is not aware of any cost impacts that a representative private person or busi - nesses would necessarily incur in reasonable compli - ance with the proposed action. The proposal is nec - essary because cattle producers in San Luis Obispo County have voted to remove their county as an MPO inspection area as specified in

section 850 of Title 3 of the California Code of Regulations, in accordance with

section 21111.5 of the Food and Agricultural Code. Persons/Businesses affected by the proposal: ● Affects cattle producers in San Luis Obispo County who have voted to delete their county as an MPO inspection area from

section 850 of Title 3 of the California Code of Regulations in accordance with

section 21111.5 of the Food and Agricultural Code. ● The Department inspects approximately 6,738 head of cattle annually in San Luis Obispo County at a cost to cattle producers of $1.50 per head. The cattle producers in the area will be sav- ing over approximately $10,310 annually in brand inspection fees with the deletion of their county as an MPO inspection area.

Anticipated compliance requirements as a result of this proposal: ● No paperwork, record–keeping or reporting re - quirements, and no brand inspection fees would be required in the affected area of San Luis Obispo County as a result of this proposal un - less as otherwise specified by existing statutes or regulations. Effect on Housing Costs: None. Effect on Small Businesses: The Department’s pro - posal would affect small businesses.

However, the af- fect would represent a cost savings to any small busi - ness cattle producer because cattle inspections would no longer be required in San Luis Obispo County as an MPO as specified in this proposal. RESULTS OF ECONOMIC IMPACT ASSESSMENT Impact on Jobs/New Businesses: The Department has determined that this regulatory proposal will not have any impact on the creation of jobs or businesses or the elimination of jobs or existing businesses or the expansion of businesses in California.

The Department has made a determination that this regulatory proposal: ● Will have no significant statewide adverse eco - nomic impact directly affecting businesses, in - cluding the ability of California businesses to compete with businesses in other states by mak - ing it more costly to produce goods or services. ● Will not create or eliminate jobs or occupations. ● Does not affect the creation of new businesses or the elimination of existing businesses within the State of California, and does not affect the expan- sion of businesses currently doing business with- in the State of California. ● Does not impact multiple industries. ● Does not directly impact or affect human health, worker safety, or the State’s environment.

It per - tains to cattle brand inspections for the San Luis Obispo County MPO inspection area. Cattle may be moved out of that area without a brand inspec- tion for purposes other than sale or slaughter and

CALIFORNIA REGULATORY NOTICE REGISTER 2024, VOLUME NUMBER 33–Z 1031 no change in ownership is involved as specified in Food and Agricultural Code

section 21051. ● Affects cattle producers in San Luis Obispo County who have voted to delete their county as an MPO inspection area from

section 850 of Title 3 of the California Code of Regulations in accordance with

section 21111.5 of the Food and Agricultural Code. ● Represents a cost savings to cattle producers in San Luis Obispo County of over $10,310 in brand inspection fees annually with the deletion of their county as an MPO inspection area. The Department inspects approximately 6,738 head of cattle annually in San Luis Obispo County at a cost to cattle producers of $1.50 per head.

The Department would no longer need to send brand inspectors to that area and can be further utilized at saleyards and auctions, with continued efforts working with local law enforcement agencies to prevent and mitigate activities involving cattle theft and misappropriation throughout the state. The above determinations are based on the fact that this regulatory proposal is necessary as a result of a petition and vote by cattle producers to delete Area #1 San Luis Obispo County as an MPO inspection area from

section 850 of Title 3 of the California Code of Regulations, in accordance with sections 20017, 20021, 21111, 21111.5, and 21112 of the Food and Agricultural Code. Benefits of the proposed regulation to the health and welfare of California residents, worker safety, and the State’s environment: The proposed regulation does not directly impact or affect human health, worker safety, or the State’s environment. It pertains to cattle brand inspections for the San Luis Obispo County MPO in - spection area. Cattle may be moved out of that area without a brand inspection for purposes other than sale or slaughter and no change in ownership is involved as specified in Food and Agricultural Code

section 21051. The proposal is necessary because cattle pro - ducers in San Luis Obispo County have voted to re - move their county as an MPO inspection area as spec- ified in

section 850 of Title 3 of the California Code of Regulations, in accordance with

section 21111.5 of the Food and Agricultural Code. The above determinations are based on the fact that this regulatory proposal is necessary as a result of a petition and vote by cattle producers to delete Area #1 San Luis Obispo County as an MPO inspection area from

section 850 of Title 3 of the California Code of Regulations, in accordance with sections 20017, 20021, 21111, 21111.5, and 21112 of the Food and Agricultural Code. Occupations/Businesses Impacted: The Department has made an initial determination that this regulatory proposal will impact cattle producers in San Luis Obispo County who have voted to remove their coun- ty as an MPO inspection area as specified in

section 850 of Title 3 of the California Code of Regulations, in accordance with

section 21111.5 of the Food and Agricultural Code. No brand inspections would be re- quired to move cattle out of that county unless other - wise specified by existing statutes or regulations. Comparable Federal Regulations: T here a re no com- parable federal regulations. The Department of Food and Agriculture, Bureau of Livestock Identification, is the sole State authority to register and inspect cattle operations in accordance with Division 10 (commenc- ing with

section 20001) of the Food and Agricultural Code. CONSIDERATION OF ALTERNATIVES The Department must determine that no reason - able alternative considered or that has otherwise been identified and brought the attention of the Department 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 than the proposed action, or would be more cost–ef - fective to affected private persons and equally effec - tive in implementing the statutory policy or other pro- vision of law.

This proposal is a result of a petition and public vote from the cattle producers in San Luis Obispo County to delete their county as an MPO in - spection area in accordance with

section 21111.5 of the Food and Agricultural Code. Any interested person may present statements or ar- guments orally or in writing relevant to the above de - terminations at the hearing (if a hearing is requested) or during the written public comment period. INITIAL STATEMENT OF REASONS AND INFORMATION The Department has prepared an initial statement of reasons for the proposed action and has available all the information upon which the proposal is based.

The rulemaking file at this time consists of this Notice, the proposed text, Initial Statement of Reasons and sup - porting factual material which is the petition to re - move Area 1 San Luis Obispo County as an MPO, the Department’s response to the petition, hearing notice, and tally and votes to remove Area 1 San Luis Obispo County as an MPO. TEXT OF PROPOSAL Copies of the exact language of the proposed regula- tions and of the initial statement of reasons, and all the information upon which the proposal is based, may be

CALIFORNIA REGULATORY NOTICE REGISTER 2024, VOLUME NUMBER 33–Z 1032 obtained by contacting the persons named below or by accessing the Department’s website as indicated be - low in this Notice. AVAILABILITY 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 persons named below.

The Department will have the rulemaking file available for inspection and copy - ing throughout the rulemaking process at its office lo- cated at 1220 N Street, Sacramento, CA 95814. Any person may obtain a copy of the Final Statement of Reasons, once it has been prepared, by making a written request to the contact person(

s) named below. AVAILABILITY OF CHANGED OR MODIFIED TEXT After considering all timely and relevant comments received, the Department may amend the proposed regulations substantially as described in this Notice. If the Department makes modifications, which are sufficiently related to the originally proposed text, it will make the modified text (with changes clearly in - dicated) available to the public for at least 15 days be- fore the Department adopts the regulations as modi - fied. Please send requests for copies of any modified regulations to the attention of John Suther at the ad - dress listed below.

The Department will accept writ - ten comments on the modified regulations for 15 days after the date on which they are made available. AVAILABILITY OF DOCUMENTS ON THE INTERNET Copies of the Notice of Proposed Action, the Initial Statement of Reasons and the text of the proposed regulations shown in strikeout and underline format, can be accessed through the Department’s website at: http://www.cdfa.ca.gov/ahfss/regulations.html.

CONTACT PERSONS Inquiries concerning the substance of the proposed regulations, or any written comments concerning this proposal, are to be addressed to the following: John Suther, Branch Chief Department of Food and Agriculture Animal Health and Food Safety Services Bureau of Livestock Identification 1220 N Street Sacramento, CA 95814 Telephone (916) 900–5006 Email: john.suther@cdfa.ca.gov The backup contact person is: Nancy Grillo Department of Food and Agriculture Animal Health and Food Safety Services 1220 N Street, Sacramento, CA 95814 Telephone (916) 900–5000 Email: nancy.grillo@cdfa.ca.gov TITLE 3.

DEPARTMENT OF FOOD AND AGRICULTURE MEAT INSPECTION MOBILE CUSTOM LIVESTOCK SLAUGHTER NOTICE IS HEREBY GIVEN that the California Department of Food and Agriculture (Department) proposes to adopt, amend, and repeal the proposed regulations described below in the Informative Digest/ Policy Statement Overview after considering all com- ments, objections, and recommendations regarding the proposed action. Publication of this notice com - mences a 45–day public comment period. PUBLIC HEARING The Department has not scheduled a public hear - ing on this proposed action.

However, the Department will hold a hearing if it receives a written request for a public hearing from any interested person, or their authorized representative, no later than 15 days before the close of the written comment period. WRITTEN COMMENT PERIOD Any interested person, or their authorized represen- tative, may submit written comments relevant to the proposed regulatory action to: Dr. Fernando Umayam, Jr., Assistant Branch Chief Department of Food and Agriculture Meat, Poultry and Egg Safety Branch 1220 N Street, Sacramento, CA 95814 Telephone: (909) 730–0571 Email: fernando.umayam@cdfa.ca.gov

CALIFORNIA REGULATORY NOTICE REGISTER 2024, VOLUME NUMBER 33–Z 1033 Comments may also be submitted by email to CDFA.MPES_Feedback@cdfa.ca.gov. The written comment period begins on August 16, 2024 and closes on September 30, 2024 . The Department is not required to respond to comments that are outside the scope of this Notice or comments that are not received or postmarked during the written comment period. When commenting, please indicate the proposed rulemaking action to which your com - ment refers. AUTHORITY AND REFERENCE Food and Agricultural Code (FAC)

section 14 au - thorizes the Department to adopt rules and regulations in accordance with the Administrative Procedure Act. Additional authority vested in the FAC grants the Department Secretary the authority to amend or re - peal rules and regulations. FAC

section 407 authorizes the director to adopt such regulations as are reasonably necessary to carry out the provisions of this code which they are directed or authorized to administer or enforce. FAC

section 9562 specifies that: (

a) Subject to the rights and procedures estab - lished pursuant to

Chapter 4.5 (commencing with

Section 11400) of Division 3 of Title 2 of the Government Code, and in accordance with regulations adopted pursuant to this code, the State Veterinarian shall impose a quarantine if he or she believes, upon any basis reason - ably supportable by standard epidemiological practice or credible scientific research, that a population of domestic animals or food prod - uct from animals has contracted, or may car - ry, an illness, infection, pathogen, contagion, toxin, or condition that, without intervention, could transmit an illness that could kill or seri - ously damage other animals or humans, includ- ing, in addition to the original condition, those clinically plausible secondary illnesses, infec - tions, pathogens, contagions, toxins, or condi - tions arising from the effects of the original. (b)

(1) Because the authority conferred by this

section is designed to protect the health and safety of the citizens of this state, the authority shall be interpreted broadly to give full effect to the purpose of protecting the public health and safety and shall be construed to include the imposition of quarantines in the circumstances of natural disaster, whether occurring or immi- nent, or declared emergencies.

(2) In furtherance of the objectives of the quar- antine, the State Veterinarian may impose re - strictions not only on the affected animals themselves and the uses to which those animals may be put, but on products produced from, by, or with those animals in order to minimize the risk or spread of food–borne illness.

(3) The State Veterinarian’s quarantine pow - ers set forth in this

section expressly include the power to order movement, segregation, iso- lation, or destruction of animals or food prod - ucts, as well as the power to hold animals or food products in place. FAC

section 18693 specifies that the regulations which are adopted pursuant to this

chapter shall con - form, so far as possible, to the rules, regulations, and standards of the United States Department of Agriculture which govern the inspection, preparation, and processing of livestock and livestock products and poultry and poultry products.

Notwithstanding any provision of law to the con - trary, the director may adopt, by regulation, standards and requirements equal to those of the federal acts, including, but not limited to, standards and require - ments of inspection, sanitation, reinspection, prepara - tion, processing, buying, selling, transporting, storing, identification, recordkeeping, registration, and label - ing. The regulations shall not be less restrictive than state statutory requirements.

The director may en - ter into cooperative agreements with the Secretary of Agriculture of the United States to enforce such stan - dards and requirements in this state. FAC

section 18735 specifies that the director may adopt, by reference or otherwise, such provisions of the rules and regulations under the federal acts, with such changes therein as they deem appropriate to make them applicable to operations and transactions subject to this chapter, which shall have the same force and ef- fect as if promulgated under this chapter, and promul- gate such other regulations as he deems necessary for the efficient execution of the provisions of this chapter. FAC

section 18736 specifies that the director may appoint and prescribe the duties of such inspectors and other personnel as he deems necessary for the efficient execution of the provisions of this chapter. FAC

section 18960 authorizes the director to adopt, by regulation, standards and requirements relating to inspection, sanitation, facilities, equipment, reinspec - tion, preparation, processing, buying, selling, trans - porting, storing, identification, recordkeeping, regis - tration, and labeling, and marking for carrying out the purposes of this chapter. FAC

section 18961 authorizes the director, by regu- lations, to adopt provisions of the rules and regulations made under federal acts with such changes therein as he or she deems appropriate to make them applicable to operations and transactions subject to this chapter.

CALIFORNIA REGULATORY NOTICE REGISTER 2024, VOLUME NUMBER 33–Z 1034 FAC

section 18962 specifies that the department may adopt, by regulation, provisions to examine ap - plicants for the positions of licensed livestock meat in- spector and licensed processing inspector. FAC

section 18973 specifies that: (

a) Licensed livestock meat inspectors, licensed processing inspectors, and department inspec - tors are authorized to supervise the operations of licensed establishments, to order the estab - lishments not to operate until required stan - dards are met, and to cease operations when the standards are violated. These persons are also authorized to require withholding from move - ment, sale, or the delivery of products that may be unfit, because the products were derived from unfit animals or processed in unsanitary conditions and to require denaturing and con - demnation of the unfit products. (

b) The department may immediately with - draw or refuse to provide inspection services to any establishment under this

chapter that fails to cease operations, hold any retained product, or destroy any condemned product in accor - dance with the order of a department inspector or licensed livestock meat inspector or licensed processing inspector. It is unlawful to violate any such order. FAC

section 18980 specifies that: (

a) The application fee for a livestock meat in - spector’s license or a processing inspector’s li- cense is one hundred dollars ($100). If an appli- cant for a license does not take the examination within one year after the date of the receipt of the application by the secretary, the application expires. Reexamination requires the payment of an additional application fee. (

b) Each license shall expire on the last day of the calendar year for which it is issued. The fee shall not be prorated. (

c) This

section shall remain in effect only until January 1, 2027, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2027, deletes or extends that date. FAC

section 18981 that: (

a) Application for renewal of a license accom- panied by a fee of one hundred dollars ($100) shall be made on or before its expiration. Ap - plicants for renewal of a license who have not paid the renewal fee by the expiration date of the license shall be assessed a twenty–five dol- lar ($25) penalty. Failure to pay the renewal fee plus the penalty within 90 days of expiration shall cause a revocation of a license. (

b) This

section shall remain in effect only until January 1, 2027, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2027, deletes or extends that date. FAC

section 18982 specifies that the department shall conduct periodic training for licensed livestock meat inspectors and licensed processing inspectors to maintain and increase their competence in the perfor - mance of their official duties. FAC 18983 specifies that Licensed livestock meat in- spectors and licensed processing inspectors shall par - ticipate in annual training meetings sponsored by the department to maintain and increase their competence in the performance of their official duties. Failure to participate may be a cause to revoke their license. FAC 18991 specifies that: (

a) A licensed livestock meat inspector, in ac - cordance with regulations adopted hereunder, shall conduct antemortem examination of each animal to be slaughtered in a licensed estab - lishment and shall permit the slaughter of ap - parently healthy animals and withhold from slaughter all animals suspected, as well as those plainly showing evidence, of a disease. Animals so withheld shall be examined by a department employee who shall order the dis - position of the animal pursuant to the regula - tions adopted hereunder. (

b) The licensed livestock meat inspector shall conduct a postmortem examination and make dispositions of carcasses and parts thereof in ac- cordance with regulations adopted hereunder. (

c) A licensed livestock meat inspector shall conduct a sanitation inspection before the es - tablishment commences operations for the day, and make periodic inspections throughout the day. (

d) The licensed livestock meat inspector shall order the establishment not to begin operations or to cease operations at any time that the es - tablishment sanitation fails to meet the require- ments of this

chapter and the regulations ad - opted thereunder, or at any time any product is not handled, retained, condemned, or disposed of in violation of this

chapter or the regulations thereunder. (e)

(1) Passed carcasses and parts of cattle, sheep, swine, and goat shall be stamped by the licensed livestock meat inspector or under his or her supervision with an approved California identification number.

(2) Passed carcasses and parts of fallow deer slaughtered and prepared for transportation or

CALIFORNIA REGULATORY NOTICE REGISTER 2024, VOLUME NUMBER 33–Z 1035 sale shall be stamped with an approved mark of inspection. FAC

section 19014 specifies that plant sanitation, sanitary dressing procedures, processing proce - dures, vehicle equipment, facility standards, and san - itation, including transportation and storage of prod - ucts, shall follow procedures which may be set forth in regulations or operations manuals adopted by the department. FAC

section 19020 specifies that: This

chapter does not apply to any of the following: (

a) Owners who slaughter, on their own prem - ises, livestock of their own raising where the meat is not for sale, but used exclusively by the owners, members of the owner’s household, the owner’s employees, and nonpaying guests. (

b) A mobile slaughter operator who provides services to an owner as specified in subdivision (

a) where the slaughter occurs on the owner’s premises and the meat is thereafter transported for the owner to an establishment for further processing. (c)

(1) A mobile slaughter operator who pro - vides services to an owner of livestock and slaughters multiple livestock from multiple owners, if the slaughter occurs on the premises of one of the owners of the livestock or on the premises of the producer, subject to the follow- ing conditions: (

A) Before the slaughter, if the livestock slaugh- tered are cattle, the cattle are inspected pursu - ant to

Section 21051. (

B) After the slaughter, the meat is transported for the owner to an establishment for further processing. (

C) The meat is not for sale, but is used exclu - sively by the owner, members of the owner’s household, the owner’s employees, and non - paying guests. (

D) The producer that has mobile slaughter op- erations conducted on their premises shall reg - ister with the department and maintain records pursuant to this chapter. (

E) The mobile slaughter operator shall be li - censed as a custom livestock slaughter op - eration with the department pursuant to this chapter. (

F) The mobile slaughter operator shall be li - censed as a livestock meat inspector with the department pursuant to this

chapter and shall complete annual training as provided by the Meat, Poultry and Egg Safety Branch of the department. (

G) The mobile slaughter operator licensed with the department shall maintain records pursuant to this

chapter and the records shall be made available, upon request, to a depart - ment inspector, investigator, or peace officer. (

H) The premises or the mobile slaughter facil- ity where slaughter is conducted shall have an adequate sewer, facilities, and potable water.

(2) The exemption in paragraph (1) shall apply to the slaughter of more than one head of live - stock on a single premises in a calendar year.

(3) Slaughter activities conducted, includ - ing the proper disposition of inedible materi - als, pursuant to the exemption in paragraph (1) shall comply with all other applicable state and federal environmental and zoning laws.

(4) For purposes of this article, the following terms shall apply: (A) “Livestock” means any cattle, sheep, goat, and swine used for human food. (B) “Producer” means the person who owned and was responsible for feeding and caring for the livestock before its sale and slaughter on the person’s premises. (

d) Persons solely engaged in cutting, wrap - ping, and otherwise processing farm or cus - tom slaughter livestock or the processing and sale of fresh meats derived from United States Department of Agriculture inspected carcass - es, except the curing, smoking, and preparing of cooked or smoked sausages or cooked pork products that are not exempted under subdivi - sion (

b) of

Section 18814. (

e) Livestock slaughter and meat and poultry processing inspected by the United States De - partment of Agriculture. FAC

section 19021 specifies that: (

a) A mobile slaughter operator performing the service of slaughtering livestock pursu - ant to subdivision (

c) of

Section 19020 shall be licensed with the department as both of the following:

(1) A custom livestock slaughter operation pur- suant to Sections 19010 and 19022 and is sub - ject to

Section 19023. The department shall es- tablish a license fee and a renewal fee to cover costs associated with oversight and inspection of mobile slaughter operators. The fees shall not exceed the reasonable regulatory costs of

CALIFORNIA REGULATORY NOTICE REGISTER 2024, VOLUME NUMBER 33–Z 1036 the department and in no event shall be more than five hundred dollars ($500).

(2) A livestock meat inspector pursuant to Sec- tions 18980 and 19022 and subject to

Section 19023. (b)

(1) The producer of the livestock who con - ducts multiple slaughter operations on their premise pursuant to subdivision (

c) of

Section 19020 shall be registered with the department pursuant to

Section 19022 and is subject to

Section 19023. The one–time registration fee shall not exceed the regulatory costs of the de - partment and in no event shall be more than one hundred dollars ($100).

(2) The producer shall reregister with the de - partment if the producer moves locations or if the operation changes ownership. The reregis - tration fee shall be the same amount as the reg- istration fee specified in paragraph (1). FAC

section 19022 specifies that: (

a) A mobile slaughter operator performing the service of slaughtering livestock pursu - ant to subdivision (

c) of

Section 19020 shall file an application for a license that shows the names and addresses of the owners of the mo - bile slaughterer and any other information the secretary may require. (

b) The producer shall file a registration with the department that shows the name and ad - dress of every location where the slaughter of livestock will occur. (

c) The registration or license shall be filed with the Meat, Poultry and Egg Safety Branch of the department before a mobile slaughter operator may slaughter livestock pursuant to subdivi - sion (

c) of

Section 19020. (

d) After notice and hearing, the secretary may cancel the registration of any producer or the li- cense of a mobile slaughter operator operating pursuant to subdivision (

c) of

Section 19020 for failing to comply with this

section or

Section 19023. FAC

section 19023 specifies that: (

a) A mobile slaughter operator that slaughters livestock pursuant to subdivision (

c) of

Section 19020 shall keep and maintain all of the fol - lowing records expressly for that purpose for at least one year:

(1) The date of slaughter of all livestock.

(2) The name, address, and telephone num - ber of producer of the livestock that are being slaughtered.

(3) The address or other location identifier of where the slaughter occurred.

(4) The number of each livestock slaughtered at the address on the date of slaughter.

(5) All ear tag numbers and all identification markings, if available, on all livestock slaugh - tered, and, if no identification number or mark- ing is present, record “no identification number or marking.”

(6) The name, address, and telephone number of the owner for each livestock slaughtered.

(7) The name and address of the facility that each carcass was transported to for processing. (

b) Every producer that produces livestock that are slaughtered by a mobile slaughter opera - tor pursuant to subdivision (

c) of

Section 19020 shall keep and maintain all of the following re- cords for at least one year:

(1) The name, address, and telephone number of the buyer.

(2) All ear tag numbers and all other identifica- tion markings of all livestock.

(3) The price paid for each livestock.

(4) A purchase receipt for each livestock.

(5) The date of purchase of each livestock.

(6) The date of slaughter of each livestock. (

c) All records maintained pursuant to this sec- tion shall be available on the demand of any in- spector or peace officer FAC

section 19030 specifies that the director may, after a hearing conducted pursuant to

Section 11346.8 of the Government Code, refuse to issue a license or renew a license and may revoke or suspend any li - cense for any violation of or failure to comply with any provision of this

chapter or any of the regulations thereunder. However, if the director finds evidence of willful or repeated violations, he or she may immedi - ately suspend the license pending a final disposition of the matter. FAC

section 19032 specifies that any person that vi- olates any provision of this chapter, or any regulation that is issued pursuant to it, is liable civilly for a pen - alty in an amount not to exceed five hundred dollars ($500) for each such violation. If the court finds that the violation of this

chapter was a serious violation, or that the violation is a second or subsequent viola - tion, the person is liable civilly for a penalty not to ex- ceed fifteen thousand dollars ($15,000) for each such violation. FAC

section 19040 requires that:

CALIFORNIA REGULATORY NOTICE REGISTER 2024, VOLUME NUMBER 33–Z 1037 (

a) All fees, charges, and collections collected pursuant to this

chapter shall be deposited in the Department of Food and Agriculture Fund. (

b) All fees, charges, and collections collected pursuant to this

chapter shall be used for the enforcement of this

chapter and shall be for a specific benefit or privilege conferred directly to the payer and such benefit or privilege shall not be provided to those not charged. (

c) Fees shall not exceed the reasonable costs associated with issuing the license or permit, performing investigations, inspections, and au- dits, enforcing provisions pursuant to the li - cense or permit, and administrative enforce - ment and adjudication thereof. INFORMATIVE DIGEST/POLICY STATEMENT OVERVIEW This rulemaking action clarifies and makes spe - cific requirements for Mobile Slaughter Operation Licensing and Livestock Producer Registration with the Department. This rulemaking action proposes to amend the California Code of Regulations (CCR) Title 3, Division 2,

Chapter 4, Subchapter 1,

Article 1 (sec - tions 900, 900.1, and 900.3),

Article 2 (sections 901, 901.3, 901.4, 901.7, 901.8, and 901.9),

Article 3 (sec - tions 902.2, 902.8, 902.9, 902.10, 902.11, and 902.14),

Article 4 (section 903.1),

Article 5 (section 904.6),

Article 8 (section 907),

Article 9 (sections 908.5, 908.10, and 908.11),

Article 11 (sections 910.4 and 910.11), and

Article 14 (section 913); repeal

Article 3 (sections 902.1 and 902.15),

Article 9 (sections 908.8 and 908.9), and

Article 11 (section 910.7); and adopt sections 901.9.1 and 901.9.2 of

Article 2, and

Article 15 (section 914) to establish fees and make technical and organizational changes to the regulations as spec- ified below. The proposed regulations create a new registration and licensure program for a previously unregulat - ed practice to ensure that animals are safely and hu - manely slaughtered.

It is also meant to set effective re- quirements and standards to achieve food safety for the end consumer as well as to ensure there is an over- sight of animal welfare and environmental impact during slaughter and transport conducted by a Mobile Slaughter Operator licensed as a Mobile Slaughter Operation and a Livestock Meat Inspector with MPES. Other proposed actions to the regulation are to make technical and organizational changes so that the pro - gram can maintain the regulation’s consistency and to ensure only pertinent information is included in the regulation.

Summary of Existing Laws and Effect of the Proposed Action On January 1, 2022, a new law, Assembly Bill (AB) 888 (Levine) (Chapter 378, Statutes of 2021) pertain - ing to Mobile Slaughter Operators of livestock an - imals, came into effect. AB 888 amended

section 19020, and added sections 19021, 19022, and 19023 to the statutes pertaining to Mobile Slaughter Operator requirements, licenses, and renewal fees as well as the one–time Livestock Producer registration fee. This rulemaking action is to set Mobile Slaughter Operator requirements, licenses, and annual renewal fees as well as a one–time Livestock Producer Registration. A newly created fee structure will be used to set clear registration requirements and the fees will be utilized to cover the program’s regulatory oversight and in - spection cost to ensure the safe and humane slaugh - ter of livestock as defined in Food and Agricultural Code

section 19020 (c) (4) (

A) in California.

The forms and fees that each Mobile Slaughter Operator and Livestock Producer will have to submit are itemized and listed below under “the Cost impact on a represen- tative private person or business.” The revision and adoption of the statutes mentioned above require the program to take regulatory actions and make necessary amendments so the program can carry out its core mission of providing inspectional oversight to protect food safety, animal welfare, and the environment while promoting the opportunity for livestock producers to market their livestock directly to consumers who are interested in purchasing live - stock for their own personal use and consumption.

OBJECTIVES AND ANTICIPATED BENEFITS OF THE PROPOSED REGULATION The benefits anticipated by the proposed regulation are expanded opportunities for Livestock Producers and consumers to utilize direct marketing and pur - chase so that consumers can directly purchase live - stock sold for harvest from registered producers for personal use and consumption under the proposed regulatory actions that aim to enhance food safety as - surance for the end consumer.

EVALUATION OF INCONSISTENCY/ INCOMPATIBILITY WITH EXISTING STATE REGULATIONS The Department determined that this proposed reg - ulation is not inconsistent or incompatible with ex - isting regulations. After conducting a review for any regulations that would relate to or affect this area, the Department has concluded that these are the only reg- ulations that concern Mobile Slaughter Operation

CALIFORNIA REGULATORY NOTICE REGISTER 2024, VOLUME NUMBER 33–Z 1038 Licenses and Livestock Producer Registration requirements. DISCLOSURES REGARDING THE PROPOSED ACTION The Branch has made the following initial determinations: Mandate on local agencies or school districts: None. Cost or savings to any state agency: None. Cost to any local agency or school district which must be reimbursed in accordance with Government Code sections 17500 through 17630: None. Other non–discretionary costs or savings imposed on local agencies: None. Cost or savings in federal funding to the state: None.

Cost impact on a representative private person or business: The Department anticipates there will fees for the licensure, renewal, and registration.

Applications and fees that need to be submitted prior to being licensed and/or registered are listed and item- ized below: An initial Application fee of $500 (MPES Application for Mobile Slaughter Operation License Form 79–021B) and an annual renewal fee of $500. ● An initial Application fee of $100 (MPES Livestock Meat Inspector License Application 79–008A) and an annual renewal fee of $100. ● A one–time registration fee of $100 for each Livestock Producer who are required to register with MPES (MPES Livestock Producer Form 79– 021A).

If the Livestock Producer relocates and/or changes ownership, the Livestock Producer will have to re–submit a new registration form and fee of $100. Significant, statewide adverse economic impact di - rectly affecting businesses, including the ability of California businesses to compete with businesses in other state: The Department has made an initial deter- mination that the proposed regulatory action will not have any significant statewide adverse economic im - pact directly affecting California businesses including the ability of California businesses to compete with businesses in other states.

Significant effect on housing costs: None. Small Business Determination: The Department has initially determined that the proposed adoption of this regulatory action would affect small businesses. The Department has made the initial determination that the proposed regulations would have a positive impact on the general public by protection of public health and safety, the creation of new small businesses, and the expansion of small businesses currently doing business within this state that would significantly af - fect a private person or small business.

The proposed regulations would exclusively affect small businesses, primarily Mobile Slaughter Operations and Livestock Producers under FAC sections 19020–19023. Expanding direct sales of locally supplied meat, from locally produced livestock will be the result of Mobile Slaughter Operation regulations and will be an effec - tive way to promote the fair and equitable marketing of meat products from livestock producers.

Therefore, this regulation will contribute to an already robust body of statutory and regulatory precedent which will promote consumer confidence in the local food supply chain, the California livestock Industry and enhance the conditions for an equitable marketplace, thereby supporting continued growth of California’s “Farm to Fork” approach to food. Conversely, if these reg - ulations are not promulgated, enforcement activities would lack the tools to ensure that the sale of local - ly produced livestock meat products is free of fraud, deception and food safety issues.

This could lead to a lack of consumer confidence and could be harmful to the animal industry.

RESULT OF THE ECONOMIC IMPACT ASSESSMENT/ANALYSIS The Department concludes that it is: (1) unlikely that the proposal will eliminate jobs, (2) likely that the proposal will create an unknown number of jobs for individuals and/or businesses interested in be - coming a Licensed Mobile Slaughter Operation and a Registered Livestock Producer pursuant to FAC sec - tion 19020–19023, (3) unlikely that the proposal will eliminate any existing businesses, (4) unlikely that the proposal will result in the expansion of businesses currently doing business within the state, and (5) like- ly that this proposal will enhance enforcement activ - ities that will protect animal welfare, general public safety, food safety, the environment, and the industry.

Benefits of the Proposed Action: Consumers of California will be assured that when they purchase live animals and have them slaughtered in their ab - sence, minimum standards outlined in the regulations are being met. Livestock Producers will have a con - sistent standard applied equally across the industry for those that have multiple livestock slaughtered for multiple owners on their property sold to California consumers. Additionally, a fee structure, and licen - sure and registration system will set clear standards that all producers and Slaughter Operators will equal - ly adhere to.

CONSIDERATION OF ALTERNATIVES The Department must determine that no reasonable alternative it considered or that has otherwise been identified and brought to its attention would be more effective in carrying out the purpose for which the ac-

CALIFORNIA REGULATORY NOTICE REGISTER 2024, VOLUME NUMBER 33–Z 1039 tion is proposed, would be as effective and less bur - densome to affected private persons than the proposed action, or would be more cost–effective to affected pri- vate persons and equally effective in implementing the statutory policy or other provision of law. The Department invites interested persons to pres - ent statements or arguments with respect to alterna - tives to the proposed regulation during the written comment period or at the public hearing, if one is held.

CONTACT PERSONS Inquiries concerning the proposed action may be di- rected to: Dr.

Fernando Umayam, Jr., Assistant Branch Chief Department of Food and Agriculture Meat, Poultry and Egg Safety Branch 1220 N Street, Sacramento, CA 95814 Telephone: (909) 730–0571 Email: fernando.umayam@cdfa.ca.gov The backup contact persons are: Han Lai, Senior Environmental Scientist (Supervisory) Department of Food and Agriculture Meat, Poultry and Egg Safety Branch 1220 N Street, Sacramento, CA 95814 Telephone: (916) 204–4438 Email: han.lai@cdfa.ca.gov David Schurr, Senior Environmental Scientist Department of Food and Agriculture Meat, Poultry and Egg Safety Branch 1220 N Street, Sacramento, CA 95814 Telephone: (916) 996–1159 Email: david.schurr@cdfa.ca.gov Please direct requests for copies of the proposed text of the regulation, the Initial Statement of Reasons, the modified text of the regulation, if any, or other infor - mation upon which the rulemaking is based to Dr.

Fernando Umayam, Jr., using the contact information above. AVAILABILITY OF INITIAL STATEMENT OF REASONS AND INFORMATION AND TEXT OF THE PROPOSAL The Department will have the entire rulemaking file available for inspection and copying throughout the rulemaking process at its office at the above address. As of the date this Notice is published in the California Regulatory Notice Register, the rulemaking file con - sists of this Notice, the proposed text of the regula - tion, the Initial Statement of Reasons, and the docu - ments relied upon which at this time is the UC Davis White Paper on Small Harvest review.

Copies may be obtained by contacting Dr. Fernando Umayam, Jr., us- ing the contact information above. AVAILABILITY AND LOCATION OF THE FINAL STATEMENT OF REASONS Upon its completion, copies of the Final Statement of Reasons may be obtained by contacting Dr. Fernando Umayam, Jr., using the contact information above. AVAILABILITY OF CHANGED OR MODIFIED TEXT After considering all timely and relevant comments received, the Department may amend the proposed regulations substantially as described in this Notice.

If the Department makes modifications, which are suffi- ciently related to the originally proposed text, it will make the modified text (with changes clearly indicat - ed) available to the public for at least 15 days before the Department adopts the regulations as modified. Please sent requests for copies of any modified regula- tions to the attention of Dr. Fernando Umayam, Jr., at the address listed above. The Department will accept written comments on the modified regulations for 15 days after the date on which they are made available.

AVAILABILITY OF DOCUMENTS ON THE INTERNET Copies of this Notice, the proposed text of the regu- lation, and the Initial Statement of Reasons can be ac- cessed on the Department’s website at: https://www.cdfa.ca.gov/AHFSS/MPES/Meat_ Poultry.html TITLE 10. FILM COMMISSION CALIFORNIA FILM AND TELEVISION TAX CREDIT PROGRAM 4.0 Notice is hereby given that the California Film Commission (CFC) proposes to adopt the regulations described below after considering all comments, ob - jections and recommendations regarding the proposed action.

PROPOSED REGULATORY ACTION The CFC proposes to adopt sections 5550, 5551, 5552, 5553, 5553.1, 5553.2, 5553.3, 5554, 5554.1, 5554.2, 5555, and 5556 in

Article 5 of

Chapter 7.75 of Title 10 of the California Code of Regulations in or -

CALIFORNIA REGULATORY NOTICE REGISTER 2024, VOLUME NUMBER 33–Z 1040 der to implement, interpret and make specific Revenue and Taxation Code sections 17053.98.1 and 23698.1 re- lating to a film and television tax credit program. No public hearing is scheduled; however, any inter- ested person or their duly authorized representative may request a public hearing no later than fifteen (15) days prior to the close of the public comment period. WRITTEN COMMENT PERIOD Any interested person, or their authorized repre - sentative, may submit written comments relevant to the proposed regulatory action to the Agency.

Written comments will be accepted by the Agency through September 30, 2024. Submit comments to: Name: Hedvig Marx Address: California Film Commission, 7080 Hollywood Boulevard, Hollywood, CA 90028 Email: Hedvig.Marx@film.ca.gov AUTHORITY AND REFERENCE The proposed regulation will be adopted un - der the authority of Government Code

section 11152, and Revenue and Taxation Code sections 17053.98.1(e) (1) (A), 17053.98.1(g) (3) (D) (ii) (I) (id), 23698.1(e) (1) (

A) and 23698.1(g) (3) (D) (ii) (I) (id). The proposed regulation implements, interprets, and makes specific Revenue and Taxation Code sections 17053.98.1 and 23698.1. INFORMATIVE DIGEST/POLICY STATEMENT OVERVIEW The California Film Commission (CFC) proposes to adopt new sections 5550, 5551, 5552, 5553, 5553.1, 5553.2, 5553.3, 5554, 5554.1, 5554.2, 5555, and 5556 in

Article 5 of

Chapter 7.75 of Title 10 of the California Code of Regulations. The regulations establish a pro - cedure for allocating tax credits to qualified taxpayers in the motion picture industry.

Summary of Related Existing Laws and Regulations: Existing law provides for two similar programs; the California Film and Television Program 3.0 (Program 3.0), allocating tax credits to qualified taxpayers in the motion picture industry until June 30, 2025, and the California Soundstage Filming Tax Credit Program (Soundstage Filming Program), allocating tax cred - its to qualified motion pictures produced in a certi - fied studio construction project facility until June 30, 2032.

The provisions in the existing programs provide for applicants to file a written application for the al - location of the tax credit and for the CFC to estab - lish criteria for allocating tax credits, determine and designate applicants who meet the requirements to ap- ply for the tax credit, and issue the credit certificate to the qualified taxpayer upon completion of an eligi - ble and approved qualified motion picture.

However, Program 3.0 expires June 30, 2025, and, while the Soundstage Filming Program can potentially accept applicants through June 30, 2032, that program is lim- ited to a one–time tax credit fund of $150 million. The Soundstage Filming Program also includes separate requirements relating to filming on certified sound - stages, incurring qualified wages specifically on certi- fied soundstages, and eligible motion picture projects being produced specifically by owners or long–term tenants of certified soundstages.

In 2023, the Legislature and Administration ap - proved Senate Bill (SB) 132 (Ch. 56, Stat. 2023), which among other things, created a successor tax cred - it incentive program for film and television produc - tion in California. Specifically, the Legislature add - ed sections 17053.98.1 and 23698.1 to the Revenue and Taxation Code, containing direction to the CFC to adopt regulations to implement the new California Film and Television Tax Credit Program 4.0 (Program 4.0).

Program 4.0 continues California’s tax credit pro- gram for motion picture production in the state, begin- ning July 1, 2025, and running through June 30, 2030. Existing programs do not offer applicants the oppor- tunity to elect to have their certified tax credits refund- ed at a ten percent (10%) fee over five years; SB 132 established this provision for Program 4.0.

Existing programs do not contain requirements related to di - versity, equity, inclusion, and accessibility (DEIA) to the same extent as Program 4.0; SB 132 expanded on DEIA provisions first instated in the Soundstage Filming Program to create an opportunity for more impactful DEIA practices and more robust CFC sup - port for DEIA initiatives for Program 4.0 participants. Existing programs are not connected to the Safety on Productions Pilot Program established in the Labor Code through SB 132; SB 132 established a provision for Program 4.0 participants to participate in this first– of–its–kind set safety pilot.

Broad Objectives and Anticipated Benefits of the Proposed Regulations: These tax credit incentives will encourage pro - duction companies, regardless of distribution outlet, to film in California instead of other states, provinc - es, and countries offering incentives. The California Film and Television Tax Credit Program 4.0 is struc - tured to encourage job creation and provides separate funding categories to ensure tax credits for multiple types of productions.

The program provides for ap - plicants to file a written application for the allocation of the tax credit and for the CFC to establish criteria for allocating tax credits, determine and designate ap -

CALIFORNIA REGULATORY NOTICE REGISTER 2024, VOLUME NUMBER 33–Z 1041 plicants who meet the requirements to apply for the tax credit, and issue the credit certificate to the qual - ified taxpayer upon completion of an eligible and ap - proved qualified motion picture. The California Film and Television Tax Credit Program 4.0 will help cre - ate jobs and benefit the economy by building on the success of California’s previous and existing film and television tax credit programs, which have generated billions in production spending for the state.

Program 4.0 also seeks to increase diversity, equi - ty, inclusion, and accessibility (DEIA) within the film and television production workforce via required sub- mission of a DEIA best practice checklist for all ap - plicants, as well as a DEIA workplan, interim assess - ment, and final assessment, for applicants opting in to the voluntary provisions. The CFC DEIA Resource Program Manager and staff will support applicants in this process.

Additionally, Program 4.0 extends both the Career Readiness and the Career Pathways Programs, which serve to build industry capacity and provide youth and early career professionals with access to indus - try training and jobs. The Career Pathways Program, funded by Program 4.0 applicants, specifically pro - vides underserved communities with technical skills and soft skills training as well as established pathways into entry–level jobs in the motion picture industry.

SB 132 also established the Safety on Productions Pilot Program in sections 9150 et seq. of the Labor Code to address the implementation and oversight of safety practices and procedures in motion picture productions. Applicants that receive a motion pic - ture tax credit allocation under Program 4.0 are re - quired to participate in the Pilot, which will subse - quently be evaluated by an organization selected by the CFC and the Industry–Wide Labor–Management Safety Committee to make recommendations to the Legislature.

The proposed regulations establish and clari - fy the specific processes necessary to implement the California Film and Television Tax Credit Program 4.0 in accordance with statute, enabling the state to oper - ate the Program and realize its benefits. Consistency And Compatibility with Existing State Regulations: During the process of developing these regulations, the CFC has conducted a search of any similar reg - ulations on this topic and has concluded that these regulations are neither inconsistent nor incompatible with existing state regulations.

The CFC has endeav - ored to ensure that these regulatory amendments com- ply with the non–duplication standard found in Title 1, California Code of Regulations. In some instanc - es, the amended regulations duplicate California stat - ute in part where the statute is cited as “authority” or “reference” for the proposed regulation and the dupli- cation or overlap is necessary to satisfy the “clarity” standard of Government Code

section 11349.1(a) (3).

DOCUMENTS INCORPORATED BY REFERENCE The following forms are incorporated by reference in the proposed regulation: ● Credit Allocation Letter, CFC Form D4 (January 1, 2025) ● Diversity, Equity, Inclusion, and Accessibility Checklist, CFC Form DEIA1 (January 1, 2025) ● Diversity, Equity, Inclusion, and Accessibility Workplan, CFC Form DEIA2 (January 1, 2025) ● Diversity, Equity, Inclusion, and Accessibility Interim Assessment, CFC Form DEIA3 (Jan. 1, 2025) ● Diversity, Equity, Inclusion, and Accessibility Final Assessment, CFC Form DEIA4 (Jan. 1, 2025) ● Career Pathways, CFC Form CPP4 (January 1, 2025) ● Career Readiness, CFC Forms CR4–1, CR4–2, CR4–3, CR4–4, CR4–5 (January 1, 2025) ● Local Community Expenditure Report, CFC Form LCER4 (January 1, 2025) ● Agreed Upon Procedures, CFC Form AUP (January 1, 2025) ● Tax Credit Certificate, CFC Form M4 (January 1, 2025) ESTIMATES OF ECONOMIC IMPACT The California Film Commission has made the fol - lowing determinations: ● Mandate on local agencies and school districts: None. ● Cost or savings to any state agency: None. ● Cost to any local agency or school district which must be reimbursed in accordance with Government Code sections 17500 through 17630: None. ● Other nondiscretionary cost or savings imposed on local agencies: None. ● Cost or savings in federal funding to the state: None. ● Significant effect on housing costs: None. ● Significant statewide adverse economic impact directly affecting business, including the ability of California businesses to compete with busi - nesses in other states: None. ● Potential cost impact on representative person or businesses: The agency is not aware of any cost

CALIFORNIA REGULATORY NOTICE REGISTER 2024, VOLUME NUMBER 33–Z 1042 impacts that a representative private person or business would necessarily incur in reasonable compliance with the proposed action. EFFECT ON SMALL BUSINESS The California Film Commission has determined that the proposed regulations will not directly affect small businesses. The businesses that may elect to participate in the Programs and in such cases will be complying with these regulations are film production companies and are as such not small businesses, as defined in

section 11342.610 of the Government Code. Small businesses in California may, however, provide goods and services to the businesses electing to com - ply with these regulations and thus benefit from the additional filming in California. RESULTS OF THE ECONOMIC IMPACT ASSESSMENT Pursuant to paragraph (2) of subdivision (

e) of sec - tions 17053.98.1 and 23698.1 of the Revenue and Taxation Code the CFC is not required to provide an economic impact analysis. Due to the nature of tax credit incentives in relation to economic impact, the CFC has been exempted from the economic impact analysis throughout the existence of the California Film and Television Tax Credit Programs in all it - erations; this exemption is consistent with previous practice.

REASONABLE ALTERNATIVES CONSIDERED The California Film Commission must deter - mine that no reasonable alternative considered by the Commission or that has otherwise been identified and brought to the attention of the Board would be more effective in carrying out the purpose for which the ac- tion is proposed or would be as effective as and less burdensome to affected private persons than the pro - posed action, or would be more cost–effective to af - fected private persons and equally effective in imple - menting the statutory policy or other provision of law.

CONTACT PERSON Inquiries concerning the proposed action may be di- rected to: Name: Leah Medrano, Deputy Director Email: Leah.Medrano@film.ca.gov Phone Number: (323) 860–2960 The backup contact person for these inquiries is: Name: Hedvig Marx Email: Hedvig.Marx@film.ca.gov Phone Number: (323) 817–4115 or (310) 290–6501 Questions on the substance of the proposed regula - tions may be directed to: Name: Hedvig Marx Email: Hedvig.Marx@film.ca.gov Phone Number: (323) 817–4115 or (310) 290–6501 AVAILABILITY OF CHANGED OR MODIFIED TEXT After the close of the forty–five (45) day public comment period, the CFC may adopt the proposed regulation.

As a result of public comments, either oral or written, that are received by the CFC regarding this proposal, the CFC may determine that changes to the proposed regulation are appropriate. If the CFC makes modifications that are sufficiently related to the orig - inally proposed text, it will make the modified text (with the changes clearly indicated) available to the public for at least 15 days before the CFC adopts the regulations as revised.

The CFC will provide notifi - cation of any such modifications to all persons whose comments were received during the public comment period, all persons whose comments (written or oral) were received at the public hearing (if one is held) and all persons who requested notice of such modi - fications. Otherwise, please send requests for copies of any modified regulations to the attention of Hedvig Marx at the above email address. The CFC will accept written comments on the modified regulations for 15 days after the date on which they are made available.

AVAILABILITY OF INITIAL STATEMENT OF REASONS, RULEMAKING FILE AND EXPRESS TERMS OF THE PROPOSED REGULATIONS The CFC 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 California Film Commission, 7080 Hollywood Boulevard, Suite 900, Hollywood, California during normal business working hours (9:00 a.m.–5:00 p.m.). Please contact Hedvig Marx at the above email ad - dress to arrange a date and time to inspect the files.

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 regulations. Copies of these items are available, upon request, from the Contact Person designated in this Notice.

CALIFORNIA REGULATORY NOTICE REGISTER 2024, VOLUME NUMBER 33–Z 1043 AVAILABILITY OF FINAL STATEMENT OF REASONS The CFC is required to prepare a Final Statement of Reasons. Once the CFC has prepared a Final Statement of Reasons, a copy will be made available to anyone who requests a copy. Requests for copies should be ad- dressed to the Contact Person identified in this Notice. OFFICE INTERNET WEBSITE The Office maintains an Internet website for the electronic publication and distribution of written ma - terial.

Copies of the Notice of Proposed Action, the Initial Statement of Reasons and the text of the regu - lations can be accessed through our website at: www. film.ca.gov TITLE 10. DEPARTMENT OF INSURANCE CATASTROPHE MODELING AND RATEMAKING R EG–2023–00010 Pursuant to Government Code

section 11340.9(g), this proceeding is exempt from the rulemaking provi - sions of the Administrative Procedure Act. SUBJECT OF PROPOSED RULEMAKING Notice is given that California Insurance Commissioner Ricardo Lara will hold a public hearing to consider amending California Code of Regulations, Title 10,

Chapter 5, Subchapter 4.8,

Article 4, sec - tions 2644.4, 2644.5, 2644.8, and 2644.27, and adopt- ing

section 2644.4.5 and 2644.4.8, as well as adopting

Article 8,

section 2648.5. PUBLIC HEARING The Commissioner will hold a public hearing to pro- vide all interested persons an opportunity to present statements or arguments, either orally or in writing, concerning these regulations, as follows: Date: September 17, 2024 Time: 10:00 a.m. The public hearing shall continue until all in attendance wishing to provide comments have commented, or 1:00 p.m. Location: https://us06web.zoom.us/webinar/ register/WN_AlZHZOIOS_6LI9G0–BQYUQ The telephonic call–in line that is available to access the public hearing is accessible to persons with hear - ing impairment.

Persons with sight or hearing impair - ments are requested to notify one of the contact per - sons for this hearing (listed below) in order to review available accommodations, if necessary. PRESENTATION OF WRITTEN COMMENTS; CONTACT PERSONS All persons are invited to submit written comments on the proposed regulations during the public com - ment period. The public comment period will end on September 17, 2024.

P l e a s e d i r e c t a l l w r i t t e n c o m- ments to the following contact person: Sara Ahn, Staff Counsel California Department of Insurance Office of the Special Counsel 300 Capitol Mall, 16th Floor Sacramento, CA 95814 Phone: (213) 346–6635 Email: CDIRegulations@insurance.ca.gov The above contact person may be directly contacted with any questions regarding the substance of the pro- posed action at the following email address: CDIRegulations@insurance.ca.gov The following contact person may also serve as a backup to the contact person listed above: Margaret Hosel, Staff Counsel Office of the Special Counsel 300 Capitol Mall, 16th Floor Sacramento, CA 95814 Phone: (415) 538–4383 Email: CDIRegulations@insurance.ca.gov All other inquiries, including procedural questions related to submitting comments or participating in the hearing, should be addressed to the following contact person.

Abigail Gomez California Department of Insurance Office of the Special Counsel 300 Capitol Mall, 16th Floor Sacramento, CA 95814 Phone: (916) 492–3507 Email: CDIRegulations@insurance.ca.gov Please note that under the California Public Records Act (Government Code

Section 6250, et seq.), any written and oral comments, and associated contact in - formation included in such comments (e.g., electronic or physical address, phone number, etc.) become part of the public record and can be released to the public upon request.

CALIFORNIA REGULATORY NOTICE REGISTER 2024, VOLUME NUMBER 33–Z 1044 DEADLINE FOR WRITTEN COMMENTS All written materials must be received by the Insurance Commissioner, addressed to the con - tact person at the address listed above, no later than September 17, 2024. Any written materials received after that time may not be considered. COMMENTS TRANSMITTED BY EMAIL The Commissioner will accept written comments transmitted by email provided they are sent to the fol- lowing email address: CDIRegulations@insurance. ca.gov.

Comments sent to email addresses other than that which is designated in this notice will not be accepted. Comments sent by email are subject to the deadline set forth above for written comments. AUTHORITY AND REFERENCE The proposed regulations will implement the provi- sions of Insurance Code sections 730, 1850.4, 1858.6, 1861.01, 1861.05, 1861.07, 1861.09, 1861.10, and 12924, which also provide the rulemaking authority for this action. The Commissioner is authorized to promul - gate regulations to implement Proposition 103. 20th Century Ins. Co. v. Garamendi (1994) 8 Cal.4th 216. INFORMATIVE DIGEST

Summary of Existing Law Proposition 103 is codified in Insurance Code sec - tions 1861.01 et seq., and requires, inter alia, that no insurance rate subject to its terms shall be inadequate, excessive, or unfairly discriminatory. To help deter - mine whether rates are excessive, inadequate, or un - fairly discriminatory, Insurance Code

section 1861.05 requires any insurer desiring to change its rates for property and casualty insurance to file a complete rate application with the Insurance Commissioner for his review and approval prior to using the proposed rates. Additionally, Proposition 103 encourages public par - ticipation in the ratemaking process and allows con - sumer representatives to intervene in the review of rate filings. A complete rate application contains cer - tain data specified by statutes and regulations as well as such other information as the Commissioner may require. Under Insurance Code

section 1861.07, all in- formation provided to the Commissioner as part of a complete rate application must be available for public inspection and therefore, made public. California is currently the only state that prohibits insurers from using models to base projected losses in most property and casualty lines of insurance. The only exception to this prohibition is for projected loss- es for earthquakes and fire following earthquakes.

For all other risks, current regulations found in Title 10, sections 2644.4 and 2644.5 require insurers to base projected losses using historical experience, with ca - tastrophe losses based on a long–term average of ca - tastrophe claims of at least the past 20 years for home- owners coverage. Effect of Proposed Action The proposed amendments in this rulemaking will permit insurers to use forward–looking catastrophe models in their rate calculations and make necessary changes to the existing rate–making formula to ensure that the use of such catastrophe models in ratemak - ing will be actuarially sound.

This rulemaking will also adopt and amend regulations to create a new pro- cedure, the pre–application required information de - termination procedure (PRID procedure), to allow the public a fulsome opportunity to thoroughly investi - gate the inner workings of such models, irrespective of whether the information sought is actually relevant to rate–making, while at the same time respecting po - tentially trade–secret proprietary information of mod - el vendors and owners.

In addition, this rulemaking will provide that only insurers that commit to writ - ing additional policies or maintaining policies in distressed areas may be permitted to use forward– looking catastrophe models in their commercial and residential property rate filings to calculate the wild - fire component in their overall rates, because their historical experience may no longer accurately reflect their projected losses given the anticipated changes in their book of business as well as climate–related factors.

Given the importance of balancing consumers’ rights to participate in a thorough investigation of the reliability of these forward–looking models for use in ratemaking with the third–party modelers’ concerns regarding the protection of their proprietary informa - tion, the Department has built in necessary confidenti- ality protections as part of this rulemaking so that pro- prietary information about the model that is not rele - vant to rate–making is never made public.

Ultimately, information and data relevant to ratemaking provided to the Commissioner as part of a complete rate appli - cation will be made public under Insurance Code sec - tion 1861.07 but other irrelevant information that the public would like to investigate during the PRID pro - cedure would be kept confidential and not subject to Insurance Code

section 1861.07. Policy Statement Overview While using historical experience may have allowed insurers to accurately project losses in prior eras, in - surers and others working in the insurance field note that the progression of increased risk of loss due to wildfire, extreme weather events, and other climate risks, now renders historical experience increasingly unsuitable to accurately project losses. Additionally,

CALIFORNIA REGULATORY NOTICE REGISTER 2024, VOLUME NUMBER 33–Z 1045 historic losses may not be as accurate in predicting fu- ture losses where insurers agree to change their his - toric books of business by writing or maintaining ad - ditional policies in higher–risk wildfire–prone areas. Proponents of models cite advances in modeling tech- nology in support of reliance on these tools to more accurately project losses in an era of increasing cli - mate risk.

Based on input from public workshops together with a thorough assessment of today’s insurance landscape, the Department believes that allowing companies to use catastrophe models in their rate calculations will give them the ability to more accurately anticipate fu - ture potential catastrophe losses, thereby supporting greater availability of insurance. The Department is mindful that the use of catastrophe models must fit within the existing rate approval process and informed by California’s goals of fairness, availability, and af - fordability.

Further, the Department has been very clear that ensuring public participation in the rate– setting process is of utmost importance as it strives to increase the availability of reliable insurance from the admitted market, ensure the long–term sustainability of rates, and incentivize the accurate recognition of mitigation efforts. Benefits Anticipated The proposed regulation allows insurers to use ca - tastrophe models to project annual aggregate loss - es for wildfire exposure if the insurers meet certain conditions to demonstrate a need to use such models.

Allowing insurers to use forward–looking models to estimate projected losses for rate–making purposes is expected to provide benefits including: ● Improving pricing accuracy and rate stability by allowing insurers to use additional tools to as - sess prospective exposure to catastrophe losses in their rate calculations. ● Promoting availability of insurance in areas that have been underserved by improving pricing accuracy and encouraging a more competitive market. ● Promoting fairness as models can more timely account for risk mitigation trends as a result of risk mitigation actions taken at community and property levels. ● Encouraging uniformity and consistency in in - surance ratemaking by allowing the use of scien - tifically, computationally, and actuarially sound models to project catastrophe losses in property and casualty lines, a practice allowed in all other states. ● Standardizing the usage of non–modeled losses to streamline the rate review approval process, min- imize disputes, and allow for the more focused review and faster approval of rate applications.

The new, optional PRID procedure is intended to expedite the Department’s review and approval of rate filings that rely upon models by eliminating unneces - sary pre–hearing discovery disputes regarding mod - els that delay the process. Because a singular pre– application required information determination can be relied upon in multiple rate filings by various insurers, the proposed regulation will expedite the Department’s review and approval of rate filings, which will direct - ly impact insurance availability and promote a robust and competitive insurance marketplace.

Benefits an - ticipated to result from the PRID procedure include: ● Increasing openness and transparency in busi - ness and government by establishing a procedure to allow for thorough investigation of a model to determine what information and data is pertinent to using that model in ratemaking. ● Clarifying and expediting the review of modeled catastrophe loss projections and overall rate re - view process by establishing the role of a Model Advisor to direct a new procedure specified by these regulations and make determinations as to what constitutes required model information in a rate application.

Without this procedure, model disputes would likely occur during the rate appli- cation, potentially leading to lengthy delays in the rate review and approval process.

Further, allowing insurers that commit to writ - ing additional policies or maintaining policies in dis - tressed areas to use forward–looking catastrophe models is expected to increase availability of residen - tial and commercial property insurance options for Californians, because this requirement: ● Promotes market efficiency by providing insur - ers that commit to writing more business in dis - tressed areas, and/or taking out of the FAIR Plan more policies insuring properties impacted by heightened wildfire risk, a mechanism for calcu - lating rates more accurately than may be possible using historical loss trends, thus enabling insur - ers to charge rates commensurate with the asso - ciated increased risk of loss. ● Promotes fairness by creating an attainable stan - dard that all companies must follow should they want to use catastrophe modeling in ratemaking. ● Increases competition in the voluntary insurance market for qualified residential insurance policies in distressed areas, as an insurance company will now need to write additional policies to meet, or maintain, its insurer commitment. ● Encourages FAIR Plan depopulation by incen - tivizing voluntary market insurers to write poli - cies in distressed areas.

FAIR Plan depopulation would alleviate insurer uncertainty due to high levels of risk in the FAIR Plan. In the event of a

CALIFORNIA REGULATORY NOTICE REGISTER 2024, VOLUME NUMBER 33–Z 1046 large wildfire, insurers could be assessed to fund the FAIR Plan’s obligations. A FAIR Plan assess- ment would be an additional cost for insurers and cause further instability in the voluntary property insurance market. ● Increases the availability of commercial insur - ance policies in higher wildfire risk areas by re - quiring companies to write a number of addition- al policies equivalent to five percent of the com - pany’s total insurable value in order to use ca - tastrophe models.

Consistency or Compatibility with Existing State Regulations The proposed amendments are not inconsistent or incompatible with any other existing regulations. The proposed amendments specifically address using ca - tastrophe models in a manner that is consistent with the existing regulatory rate–making formula and en - sures that the Commissioner’s system of prior rate ap- proval remains grounded in actuarially sound princi - ples.

Additionally, these proposed amendments specif- ically address creating the PRID procedure to allow the public a fulsome opportunity to thoroughly inves - tigate the inner workings of catastrophe models while at the same time respecting potentially trade–secret proprietary information of model vendors and owners. NOT MANDATED BY FEDERAL LAW OR REGULATIONS These regulations are not mandated by federal law. There are no existing federal regulations or statutes comparable to these proposed regulations as no feder- al statutes or regulations address property and casual - ty insurance rating factors.

OTHER STATUTORY REQUIREMENTS The Department evaluated whether there were other requirements prescribed by statute applicable to these regulations by reviewing statutes and regulations re - lating to this issue and determined that there were no such requirements. LOCAL MANDATE The proposed regulations do not impose any man - date on local agencies or school districts. There are no costs to local agencies or school districts for which

Part 7 (commencing with

Section 17500) of Division 4 of the Government Code would require reimbursement. FISCAL IMPACT The following anticipated fiscal impacts to the Department have been identified. PRID Procedure The regulations state the Commissioner shall del - egate the authority to oversee a PRID procedure to a Model Advisor, who has the authority to issue subpoe- nas, administer oaths, and control the course of the PRID procedure.

The Department will incur costs in the administration of the PRID procedure, the review and analysis of catastrophe models, bringing in out - side consultants, questioning expert witnesses, and ju- dicial review of decisions. The Department anticipates that the Model Advisor will be dedicated full–time to running PRID procedures for three years. The Model Advisor is expected to need support from attorneys and legal staff in order to efficiently conduct proceed- ings and serve subpoenas.

The Department also antic- ipates the Model Advisor will need support from ac - tuaries and data specialists in order to properly eval - uate catastrophe models. Additionally, attorneys will be needed to represent the Department’s position during the PRID procedure, and to conduct judicial reviews. The expected additional time commitments from Department staff is equivalent to approximately 9 full–time positions and is calculated to result in a fis- cal impact of $1,894,000 in year 1, $1,959,000 in year 2, and $1,958,000 in year 3.

The Model Advisor has the ability to bring in out - side consultants to assist with model review. The Department anticipates needing support from outside consultants who are experts in the fields of fire sci - ence, applied mathematics, civil and mechanical engi- neering, actuarial science, and software development. The Department’s reliance on outside consultants is expected to decrease as staff becomes more adept at evaluating models and running PRID procedures.

The additional cost to bring in outside consultants is ex - pected to result in a fiscal impact of $327,000 in year 1, $292,000 in year 2, and $179,000 in year 3. In total, the PRID procedure is expected to result in a fiscal impact to the Department of $2,221,000 in year 1, $2,251,000 in year 2, and $2,137,000 in year 3. Catastrophe Models The fiscal impact analysis of the catastrophe model regulation assumes that the PRID procedure is effec - tive in evaluating models so that additional actuarial review time of rate filings is limited.

The Department assumes that senior actuarial staff will need to spend additional time in order to validate results of catastro - phe models in the most complex rate filings and to re- design rate templates and indications. The Department also anticipates that staff involved in the rate approval and rate enforcement process will require additional training on catastrophe models and the new rate tem - plates in the first year. Additional time commitments from Department staff is expected to result in a fis - cal impact to the Department of $309,000 in year 1, $71,000 in year 2, and $47,000 in year 3.

CALIFORNIA REGULATORY NOTICE REGISTER 2024, VOLUME NUMBER 33–Z 1047 Insurer Commitments The regulation text requires the Department to up - date the distressed areas and data needed for insurer commitment calculations, no less than once per year. Department staff, both specialists and managers, in - volved in data analysis are expected to spend addition- al hours to calculate the data needed to populate the bulletin. The involvement of additional Department staff, including deputy commissioners, attorneys, and managers is expected to be necessary to create, write, and publish the bulletin.

The fiscal impact from the bulletin is expected to decrease after the first year, as subsequent bulletins can use the first bulletin as a template. The Department also anticipates reviewing the Wildfire Risk Portfolio Register as part of routine ex - aminations already being conducted by Department staff. The Department conducts an average of 12 ex - aminations, annually.

The regulation is anticipated to result in an increase in the amount of time spent on each examination, as additional time is needed to analyze the register and related data, select a ran - dom sample of policies from the register, and to re - view polices and their underwriting files to confirm that the information in the register is correct and that the policy should count towards fulfilling the insurer commitment. In total, the insurer commitments regulation is ex - pected to result in a fiscal impact to the Department of $74,000 in year 1, $72,000 in year 2, and $72,000 in year 3.

Summary Matrix: Fiscal Cost Impacts Year 1 Year 2 Year 3 PRID Procedure $2,221,000 $2,251,000 $2,137,000 Catastrophe Models $309,000 $71,000 $47,000 Insurer Commitments $74,000 $72,000 $72,000 Total $2,604,000 $2,394,000 $2,256,000 The Department has determined that the proposed regulation will not impose a cost to any local agency or school district that requires reimbursement under Government Code

section 17500 et seq., nor will it re- sult in other nondiscretionary costs or savings to local agencies. HOUSING COSTS The proposed regulations will have no signifi - cant direct effect on housing costs, but increasing the availability of housing due to expanded coverage op - tions will benefit the housing market, as referenced in California Governor Gavin Newsom’s Executive Order N–13–23. The regulation is not expected to directly impact housing costs.

However, the expected increase in in - surance availability in higher wildfire areas may im - pact both an individual’s decision to buy a home, and housing construction and development efforts. Significant changes to housing supply or demand in an area may impact the cost of housing.

SIGNIFICANT STATEWIDE ADVERSE ECONOMIC IMPACT DIRECTLY AFFECTING BUSINESS The Department has made an initial determina - tion that the adoption of the proposed amendments of the regulations may have a significant, statewide ad - verse economic impact directly affecting business, in- cluding the ability of California businesses to com - pete with businesses in other states. The businesses that will be affected are insurance companies writing property and casualty policies in California. The Department has determined that insurers, mod- elers, and consumer representatives may follow the PRID procedure.

The PRID procedure allows com - plex catastrophe models to be reviewed in a way that protects third–party modelers’ data from competitors and facilitates public participation in the rate–making process consistent with Proposition 103. The PRID procedure is optional, and a single PRID procedure may result in a determination of required model infor- mation that may be used in multiple rate applications by unaffiliated insurers. The Department has considered proposed alter - natives that would lessen any adverse economic im -

CALIFORNIA REGULATORY NOTICE REGISTER 2024, VOLUME NUMBER 33–Z 1048 pact on business and invites interested parties to sub - mit proposals. Submissions may include the following considerations: (

i) N o change to the current regulatory scheme pro - hibiting insurers from using catastrophe models to estimate projected losses and continue to re - quire insurers to only rely on historical data for such estimates. (ii) A dispute pertaining to the confidentiality of in - formation and data regarding a model that should be included in a complete rate application should not be resolved by the Model Advisor, but rather by an administrative law judge in a rate hearing. (iii) T he information and data regarding a mod - el should be approved by either the Insurance Commissioner or an expert panel of outside consultants.

STATEMENT OF RESULTS OF THE ECONOMIC IMPACT ON CALIFORNIA BUSINESS ENTERPRISES AND INDIVIDUALS Below is a

summary of the results of the results of the Economic Impact on California Business Enterprises and Individuals. A detailed analysis of the conclusions follows. A. The creation of jobs within the state: The pro- posed regulation is estimated to result in the cre - ation of 1053.4 jobs within the State of California. Overall, the estimated net impact of the proposed regulation on jobs is less than one–thousandth of a percent of the total projected non–farm employ- ment in Califor nia (68.2 / 18,083,200 = 0.0004%). 1 B.

The elimination of jobs within the state: The proposed regulation is estimated to result in the elimination of 985.2 jobs within the State of Cali- fornia. Overall, the estimated net impact of the proposed regulation on jobs is less than one– thousandth of a percent of the total projected non– farm employment in California (68.2 / 18,083,200 = 0.0004%). C. The creation of new businesses within the state: It is not anticipated that the proposed reg - ulation will have a significant impact on the cre - ation of new businesses in California.

However, the Department does anticipate that voluntary market insurers and modeling companies will ex- pand operations in the state. 1 California Department of Finance. California Economic Forecast–May Revise 2024–25, April 2024. https://dof.ca.gov/ forecasting/economics/economic–forecasts–u–s–and–california/ Accessed June 13, 2024. D. The elimination of existing businesses within the state: It is not anticipated that the proposed regulation will have a significant impact on the elimination of existing businesses in California.

However, the Department does anticipate that the FAIR plan will reduce operations in the state. E. The competitive advantages for business - es currently doing business within the state: Companies that do a better job of modeling risks more granularly could have a competitive edge over those who are not using catastrophe models to quantify risk. If insurers can better quantify the charge for risk in higher wildfire risk areas, they will be more likely to target those risks. F.

The competitive disadvantages for business - es currently doing business within the state: Insurers who do not use catastrophe models to quantify risk may not be as competitive in higher wildfire risk areas. As a result, some policyhold - ers that the insurer would wish to maintain may elect to leave for another insurer that is better at pricing risk. G. The increase of investment in the state: In - adequate residential and commercial insurance coverage can hinder investment in California by increasing the economic and financial risks asso- ciated with those investments.

Many mortgages for home purchases require the property to be in- sured. Increased insurance availability may in - crease bank lending for mortgages, an investment in California. Without properties having proper access to insurance coverage, banks will likely invest in other markets (states) where their assets will have greater protection. C onstruction and development investments are dependent on consumer demand and commer - cial insurance coverage. Any hinderance to con - sumers or businesses can impact investment into these spaces.

Housing projects may end up lim - ited in some areas with increased wildfire risk if the related costs to insure projects in those areas are too high or if consumer demand in those ar - eas is decreased due to the perception of lack of adequate coverage and costly premiums. H. The decrease of investment in the state: Permit- ting catastrophe modeling will involve an adjust- ment period in which the market will be adapting to new risk information. It is possible that better risk quantification could lead to the identification of more wildfire risks in areas lacking mitigation.

Specific areas could be categorized as too high– risk, which would deter individuals and business- es from investing in these areas. I. The incentives for innovation in products, materials, or processes: As modeled catastro -

CALIFORNIA REGULATORY NOTICE REGISTER 2024, VOLUME NUMBER 33–Z 1049 phe losses will be a new methodology permitted in California the state could see significant in - novation in the number of, and quality of mod - els. Expanded use of advanced predictive mod - els and enhancement of underlying datasets may improve the overall performance of future catas - trophe models. Several insurers have suspended writing residential insurance policies in Califor - nia, while others have left the state completely.

A market with less competition often has less in - novation, the goal is to bring back insurers for a more balanced and competitive marketplace. Advanced modeling that can better identify the locations with the highest wildfire risk may lead to more precise, targeted mitigation strategies. J. The benefits of the regulations to the health, safety, and welfare of California residents: The proposed regulation is expected benefit the wel - fare of California insurance consumers by reduc- ing their financial risk exposure.

With catastro - phe modeling providing a clearer understanding of risk, insurers should be more willing to offer coverage in high wildfire risk areas, ensuring more Californians have access to coverage. Insurance companies and government agencies may be able to use data from models to proactive- ly educate the public on risks and preparedness, leading to better prepared communities.

POTENTIAL COST IMPACT ON REPRESENTATIVE PERSON OR BUSINESSES ● Initial costs for a typical insurance company are estimated to be $3,220,000 ($161 million direct cost / 50), with annual ongoing costs of $3.2 mil- lion for at least 3 years. ● Initial costs for a typical modeling company are estimated to be $25,800 ($0.232 million / 9 com- panies) to comply with requirements in the PRID procedure. ● Initial costs for a typical consumer intervenor are estimated to be $98,500 ($0.197 million / 2 com- panies) to comply with requirements in the PRID procedure.

BUSINESS REPORT The Department finds that it is necessary for the health, safety or welfare of the people of the state that the regulations apply to businesses. IMPACT ON SMALL BUSINESSES The proposed regulation is projected to have a direct adverse impact on insurers as discussed in the forego- ing analysis, however by law insurance companies are not considered small businesses (Government Code § 11342.610(b) (2)). PRID Procedure The PRID procedure regulation is not expected to adversely impact small businesses.

Catastrophe Models The proposed regulation may impact the insurance rates paid by all businesses, including small business - es. Due to the regulation changing how insurance rates are calculated, some small businesses may pay more for insurance and some may pay less. There is no provision in the regulation that is expected to neg - atively impact small businesses disproportionately. Any changes in the insurance rate paid by an individ - ual small business is expected to be tied to how much of the property’s wildfire risk has been mitigated and how well the insurer’s catastrophe model accounts for mitigation.

Insurer Commitments The implementation of insurer commitments is not expected to result in an adverse economic impact on small businesses. Nothing in the regulation requires a small business to pay for a commercial insurance pol- icy. This analysis assumes that businesses will act to maximize profits and protect their investments in both property and durable goods. Some small businesses may experience an increase in costs if they elect to pay for a new commercial insurance policy and were previously uninsured.

Some small businesses may pay less for insurance coverage if they were previously in- sured by the FAIR Plan. This analysis does not consid- er a business electing to purchase new or increased in- surance coverage an adverse impact, as there are sub - stantial business benefits to risk management and as - set protection.

ALTERNATIVES INFORMATION The Department must determine that no reasonable alternative considered by the Department, or that has otherwise been identified and brought to the attention of the Department, would be more effective in carry - ing out the purpose for which this 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 poli - cy underlying Insurance Code sections 1861.01 et seq.

CALIFORNIA REGULATORY NOTICE REGISTER 2024, VOLUME NUMBER 33–Z 1050 A V AILABILITY STATEMENTS The Department has prepared an Initial Statement of Reasons that sets forth the reasons for the proposed action. Upon request,