Time- Dated Material GAVIN NEWSOM, GOVERNOR OFFICE OF ADMINISTRATIVE LAW California Regulatory Notice Register REGISTER 2023, NUMBER 33-Z PUBLISHED WEEKLY BY THE OFFICE OF ADMINISTRATIVE LAW AUGUST 18, 2023 PROPOSED ACTION ON REGULATIONS TITLE 2.

FAIR POLITICAL PRACTICES COMMISSION Conflict–of–Interest Codes — Notice File Number Z2023–0808–04 ....................................... 1059 AMENDMENT MULTI–COUNTY: Alameda Contra Costa Transit District Gateway Community Charters Golden State Finance Authority Rural Counties’ Environmental Services’ JPA Truckee Sanitary District STATE AGENCY: California Health Benefit Exchange California State Lottery ADOPTION MULTI–COUNTY: California Community Choice Financing Authority Golden State Connect Authority Rural County Representatives of California TITLE 3.

DEPARTMENT OF FOOD AND AGRICULTURE Fertilizing Materials — Notice File Number Z2023–0808–02 ............................................ 1060 TITLE 14. DEPARTMENT OF CONSERV ATION Cost Estimate Regulations for Oil and Gas Operations — Notice File Number Z2023–0802–01 ................. 1063 TITLE 15. DEPARTMENT OF CORRECTIONS AND REHABILITATION Contraband Surveillance Watch — Notice File Number Z2023–0807–04 ................................... 1068 TITLE 22.

DEPARTMENT OF HEALTHCARE ACCESS AND INFORMATION Certification of the Health Care Payments Data Program Emergency Regulations — Notice File Number Z2023–0804–01 ................................................................ 1071 (Continued on next page)

TITLE 23.

STATE WATER RESOURCES CONTROL BOARD Making Conservation a California Way of Life — Notice File Number Z2023–0804–02 ....................... 1075 GENERAL PUBLIC INTEREST DEPARTMENT OF FISH AND WILDLIFE Consistency Determination Number 1653–2023–122–001–R3, Iron Horse Vineyards Fish Screen Implementation, Sonoma County . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1087 DEPARTMENT OF FISH AND WILDLIFE Consistency Determination Number 1653–2023–123–001–R4, San Benito River Restoration Project at Paicines Ranch, San Benito County ........................................................ 1090 DEPARTMENT OF FISH AND WILDLIFE Consistency Determination Number 1653–2023–119–001–R1, Bear Haven Creek Large Wood Enhancement Project, Mendocino County ........................................................... 1092 DEPARTMENT OF FISH AND WILDLIFE Consistency Determination Number 1653–2023–120–001–R1, Hollow Tree Creek Large Wood Enhancement Project, Mendocino County ........................................................... 1093 DEPARTMENT OF FISH AND WILDLIFE Consistency Determination Number 1653–2023–118–001–R1, John Smith Creek Large Wood Enhancement Project, Mendocino County ........................................................... 1095 HORSE RACING BOARD Extension of Written Comment Period .............................................................. 1097 DEPARTMENT OF TOXIC SUBSTANCES CONTROL Public Comment Period Concerning the Proposed Settlement Regarding the Cooper Consent Agreements for Gardena Sumps ................................................................... 1097

SUMMARY OF REGULATORY ACTIONS Regulations filed with the Secretary of State ......................................................... 1098 The California Regulatory Notice Register is an official state publication of the Office of Administrative Law containing notices of proposed regulatory actions by state regulatory agencies to adopt, amend or repeal regulations contained in the California Code of Regulations. The effective period of a notice of proposed regulatory action by a state agency in the California Regulatory Notice Register shall not exceed one year [Government Code § 11346.4(b)].

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

CALIFORNIA REGULATORY NOTICE REGISTER 2023, VOLUME NUMBER 33-Z 1059 PROPOSED ACTION ON REGULATIONS Information contained in this document is published as received from agencies and is not edited by Thomson Reuters. TITLE 2.

FAIR POLITICAL PRACTICES COMMISSION NOTICE IS HEREBY GIVEN that the Fair Politi - cal Practices Commission, pursuant to the authority vested in it by Sections 82011, 87303, and 87304 of the Government Code to review proposed conflict– of–interest codes, will review the proposed/amended conflict–of–interest codes of the following: CONFLICT–OF–INTEREST CODES AMENDMENT MULTI–COUNTY: Alameda Contra Costa Transit District Gateway Community Charters Golden State Finance Authority Rural Counties’ Environmental Ser vices’ JPA Truckee Sanitary District STATE AGENCY: California Health Benefit Exchange California State Lottery ADOPTION MULTI–COUNTY: California Community Choice Financing Authority Golden State Connect Authority Rural County Representatives of California A written comment period has been established commencing on August 18, 2023 and closing on Oc - tober 2, 2023.

Written comments should be directed to the Fair Political Practices Commission, Attention Daniel Vo, 1102 Q Street, Suite 3000, Sacramento, Califor nia 95811. At the end of the 45–day comment period, the pro - posed conflict–of–interest codes will be submitted to the Commission’s Executive Director for his review, unless any interested person or his or her duly autho - rized representative requests, no later than 15 days pri- or to the close of the written comment period, a public hearing before the full Commission.

If a public hear - ing is requested, the proposed codes will be submitted to the Commission for review. The Executive Director of the Commission will review the above–referenced conflict–of–interest codes, proposed pursuant to Government Code Sec - tion 87300, which designate, pursuant to Government Code

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

Any written comments must be received no later than October 2, 2023. If a public hearing is to be held, oral comments may be presented to the Commission at the hearing. COST TO LOCAL AGENCIES There shall be no reimbursement for any new or in- creased costs to local government which may result from compliance with these codes because these are not new programs mandated on local agencies by the codes since the requirements described herein were mandated by the Political Reform Act of 1974. There- fore, they are not “costs mandated by the state” as de- fined in Government Code

Section 17514. EFFECT ON HOUSING COSTS AND BUSINESSES Compliance with the codes has no potential effect on housing costs or on private persons, businesses or small businesses. AUTHORITY Government Code Sections 82011, 87303 and 87304 provide that the Fair Political Practices Commission as the code–reviewing body for the above conflict–of– interest codes shall approve codes as submitted, revise the proposed code and approve it as revised, or return the proposed code for revision and re–submission. REFERENCE Government Code Sections 87300 and 87306 pro - vide that agencies shall adopt and promulgate conflict– of–interest codes pursuant to the Political Reform Act

CALIFORNIA REGULATORY NOTICE REGISTER 2023, VOLUME NUMBER 33-Z 1060 and amend their codes when change is necessitated by changed circumstances. CONTACT Any inquiries concerning the proposed conflict– of–interest codes should be made to Daniel Vo, Fair Political Practices Commission, 1102 Q Street, Suite 3000, Sacramento, California 95811, telephone (916) 323–9103. AVAILABILITY OF PROPOSED CONFLICT–OF–INTEREST CODES Copies of the proposed conflict–of–interest codes may be obtained from the Commission offices or the respective agency.

Requests for copies from the Com- mission should be made to Daniel Vo, Fair Political Practices Commission, 1102 Q Street, Suite 3000, Sac- ramento, California 95811, telephone (916) 323–9103. TITLE 3. DEPARTMENT OF FOOD AND AGRICULTURE DIVISION 4. PLANT INDUSTRY

CHAPTER 1. CHEMISTRY SUBCHAPTER 1. FERTILIZING MATERIALS

ARTICLE 1. STANDARDS AND LABELING

ARTICLE 4. REGISTRATION

ARTICLE 6. ADMINISTRATIVE PENALTIES NOTICE IS HEREBY GIVEN that the California Department of Food and Agriculture (Department) proposes to adopt or make changes to the California Code of Regulations (CCR), Title 3, Division 4, Chap- ter 1, Subchapter 1, Articles 1, 4, and 6, Sections 2300, 2300.1, 2302, 2303, 2311, 2320.1, 2320.2, 2322.2, and 2322.3. 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 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 by mail, fax, or email. The written comment period closes on October 3, 2023. The Department will only consider comments received by that time.

Submit comments to: Brittnie Williams, Associate Governmental Program Analyst California Department of Food and Agriculture Feed, Fertilizer, and Livestock Drugs Regulatory Services Branch P.O. Box 942872 Sacramento, CA 94271–2872 (916) 900–5022 brittnie.williams@cdfa.ca.gov Following the written comment period or public hearing, if one is requested, the Department, at its own motion or at the request of any interested person, may adopt the proposal substantially as set forth without further notice.

AUTHORITY AND REFERENCE Notice is hereby given that the California Depart - ment of Food and Agriculture, pursuant to the au - thority vested by sections 407, 14502, 14601, 14604 14631, 14643, 14651, 14651.5, and 14682 of the Food and Agricultural Code (FAC) and

Section 11400.20 of the Government Code, proposes to make changes to Title 3, Division 4,

Chapter 1 of the CCR to imple - ment, interpret, or make specific FAC Sections 14501, 14502, 14550.5, 14601, 14631, 14641, 14642, 14643, 14653, 14655, 14681, and 14682, as well as Sections 6254.7, 11501, 11502, 11503, 11425.50, and 11445.10 of the Government Code. INFORMATIVE DIGEST/POLICY STATEMENT OVERVIEW The Department’s Fertilizing Materials Inspection Program (FMIP) is statutorily tasked with licensing, product label registration, and field inspection of fer - tilizing materials in the State of California.

The FMIP is responsible for reviewing and registering product labels, and ensuring fertilizing materials are safe, ef - fective, and meet the nutrients guaranteed by the man- ufacturer. Producers of specialty fertilizers, packaged agricultural minerals, auxiliary soil and plant sub - stances, packaged soil amendments, and organic input materials are statutorily mandated to register fertiliz - ing materials with the FMIP.

These rulemaking actions provide greater trans - parency and clarity for fertilizing materials labeling, enhances consumer protections, better explains prod - uct registration requirements, and provides additional flexibility with administrative hearings. It will also

CALIFORNIA REGULATORY NOTICE REGISTER 2023, VOLUME NUMBER 33-Z 1061 provide the FMIP with improved mechanisms for firms that failed to resolve administrative penalties. The proposed amendment to

Section 2300(

c) im - proves transparency by publishing laboratory analysis methods. It also creates greater flexibility by recog - nizing additional validated laboratory methods in ad - dition to those already utilized by the Association of Official Analytical Chemists (AOAC). The proposed amendment to

Section 2300(g)(1) provides additional flexibility to fertilizing material manufacturers and product guarantors by permitting a two–color “Registered Organic Input Material” logo on product labels, in addition to the existing four–col- or and one–color logo options. The proposed adoption of

Section 2300.1(

m) pro - vides clarity and consensus by adopting a universal definition of “protein hydrolysate,” a common ingre - dient in liquid fertilizing materials. This definition has been officially recognized within the 2023 Official Publication of the Association of American Plant Food Control Officials, which most states and Canada uti - lize to create uniform fertilizer regulations. The proposed amendment within Sections 2302(a)(1) and (2) provides clarity for non–nutritive metals by demonstrating that the standards are based upon the value provided on a label within a product’s guaran - teed analysis for iron, manganese, zinc, and available phosphate. The proposed amendment for

Section 2303(d)(1) better explains that organic input materials are exempt from bulk commercial fertilizer and bulk agricultural mineral label guarantor requirements. Organic input materials require product registration, while bulk commercial fertilizers and bulk agricultural minerals do not. The proposed adoption of Sections 2303(

x) and (

y) provide clarity and consensus by recognizing when amino acid or amino acid complexing label claims may be applied. These subsections also recognize the adoption of the “protein hydrolysate” definition within

Section 2300.1(

m) to ensure uniformity and consisten- cy that certain amino acid claims can be made when protein hydrolysate is used as an ingredient. The proposed amendment to

Section 2311(b)(1) pro- vides additional clarity that water insoluble nitrogen products are not limited to the existing examples pro - vided within the section. The proposed adoption of

Section 2320.1(

d) provides clear specificity as to what types of revisions on reg - istered labels require a registration update request and what elements are required for re–review by FMIP. The proposed amendments and adoptions within

Section 2320.2(

b) eliminate the need to identify a specific, outdated version of a physical, hard copy Organic Input Material Fertilizing Materials Regis - tration Application (513–026 Rev.07/13) and replaces it by more clearly identifying all of the registration application elements that FMIP requires. Since fertil - izer firms submit registration application information through either an online database or a physical form, the amendments to this

section transparently commu - nicate all requirements regardless of the format that the information is submitted. None of the requested information or documentation in the proposed text is novel as it represents fields within the existing physi - cal application and online database application. The proposed adoptions and amendments to Sec - tions 2322.2(

c) is to provide flexibility by having the CDFA legal office determine the location of an informal hearing and to provide the additional op - tion to hold hearings virtually through Internet video conferencing. The proposed adoption of

Section 2322.3(g)(1) pro- vides clarification as to when administrative penalty payments would be due after a written hearing deci - sion is rendered in favor of the Department. Anticipated Benefits of the Proposed Regulations: The Department anticipates the proposed regulatory changes will provide improved clarity and uniformity with fertilizing materials labeling requirements and fertilizing materials product registration, provide in - creased flexibility for administrative penalty hearings, and provides needed guidance on the failure to remit administrative penalties.

Further, these changes will provide benefits to growers and consumers though greater transparency with fertilizer labeling, improved disclosures for the end user, and enhanced consumer protections. Through greater transparent labeling, en - hanced consumer protections, and clarity of non–nu - tritive standards, these proposed regulatory changes may also positively affect the health and welfare of California residents, worker safety, and the state’s environment.

Determination of Inconsistency/Incompatibility with Existing Regulations: The Department evaluated the proposed regulations and made several determinations required by Govern- ment Code

Section 11346.5(a)(3)(

A) to 11346.5(a)(3)(D). The Department determined that there are no existing state laws or regulations related directly to the pro - posed action and the effect of the proposed action; the proposed regulations are not inconsistent or incompat- ible with existing state regulations. PLAIN ENGLISH REQUIREMENT The Department prepared the proposed regulations pursuant to the standard of clarity provided in Gov - ernment Code

Section 11349 and the plain English re- quirements of Government Code Sections 11342.580 and 11346.2, subdivision (a)(1). The proposed regula-

CALIFORNIA REGULATORY NOTICE REGISTER 2023, VOLUME NUMBER 33-Z 1062 tions are written to be easily understood by the indi - viduals that will use them. DISCLOSURES REGARDING THE PROPOSED ACTION The Department has made the following initial determinations: Mandate of 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, statewide adverse economic impact directly affecting business, including the ability of California businesses to compete with busi - nesses in other states: None. Cost impacts on a representative private person or business: The Department is not aware of any cost impacts that a representative private person or business would necessarily incur in reasonable compliance with the proposed action. Significant effect on housing costs: None.

RESULTS OF ECONOMIC IMPACT ASSESSMENT/ANALYSIS The Department has initially determined that the proposed regulatory action will not have an econom - ic or fiscal impact to the fertilizer industry but will provide benefits to growers and consumers through greater transparency and clarity for fertilizing materi - als labeling. These proposed regulations will not:

(1) Create or eliminate jobs within California

(2) Create new businesses or eliminate existing busi- nesses within the State of California

(3) Affect the expansion of businesses currently do - ing business within the State of California Anticipated Benefits: The Department anticipates the proposed regulatory changes will provide improved clarity and uniformity with fertilizing materials labeling requirements and fertilizing materials product registration, provide in - creased flexibility for administrative penalty hearings, and provides needed guidance on the failure to remit administrative penalties.

Further, these changes will provide benefits to growers and consumers though greater transparency with fertilizer labeling, improved disclosures for the end user, and enhanced consumer protections. Through greater transparent labeling, en - hanced consumer protections, and clarity of non–nu - tritive standards, these proposed regulatory changes may also positively affect the health and welfare of California residents, worker safety, and the state’s environment.

SMALL BUSINESS DETERMINATION The Department has determined that the proposed regulations may affect small businesses, but will not have an economic impact on those businesses. The proposed actions do not involve any area that would increase fees or result in any increased costs to these businesses. Administrative penalties do not finan - cially impact any firm compliant with the laws and regulations. CONSIDERATION OF ALTERNATIVES In accordance with Government Code

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

The Department invites interested persons to pres - ent statements or arguments with respect to alterna - tives to the proposed regulations during the written comment period. CONTACT PERSONS Written comments and inquiries concerning the substance of the proposed regulation should be di - rected to: Nick Young, Environmental Program Manager I California Department of Food and Agriculture Fertilizing Materials Inspection Program P.O.

Box 942872 Sacramento, CA 94271–2872 nick.young@cdfa.ca.gov Written comments and inquiries about the initial statement of reasons, proposed actions, or location of the rulemaking files; or a request for a public hearing should be directed to:

CALIFORNIA REGULATORY NOTICE REGISTER 2023, VOLUME NUMBER 33-Z 1063 Brittnie Williams, Associate Governmental Program Analyst California Department of Food and Agriculture Feed, Fertilizer, and Livestock Drugs Regulatory Services Branch P.O. Box 942872 Sacramento, CA 94271–2872 (916) 900–5022 brittnie.williams@cdfa.ca.gov AVAILABILITY OF STATEMENT OF REASONS, TEXT OF PROPOSED REGULATIONS, AND RULEMAKING FILE The Department will have the entire rulemaking file available for inspection throughout the rulemaking process.

A copy of this Notice, the Proposed Regula - tion Text, and the Initial Statement of Reasons may be obtained by contacting Brittnie Williams at the infor - mation provided in the “Contact Persons” section. AVAILABILITY OF DOCUMENTS ON THE INTERNET Copies of the Notice of Proposed Rulemaking, Ini - tial Statement of Reasons, and Proposed Regulation Text in underline and strikethrough can be accessed through the Department’s website at http://www.cdfa. ca.gov/is/regulations.html.

AVAILABILITY OF CHANGED OR MODIFIED TEXT After considering all timely and relevant com - ments received during the written comment period, the Department may adopt the proposed regulations substantially as described in this notice. If the De - partment makes modifications which differ, but are sufficiently related to the originally proposed text, it will make the modified text (with the changes clearly indicated) available to the public for at least 15 days prior to amendment.

Please send requests for copies of any modified regulations to the attention of Brittnie Williams at the information provided in the “Contact Persons” section. The Department will accept written comments on the modified regulations for 15 days af - ter the date on which they are made available. AVAILABILITY OF THE FINAL STATEMENT OF REASONS Upon its completion, copies of the Final Statement of Reasons may be obtained by contacting Brittnie Williams at the information provided in the “Contact Persons” section. TITLE 14. DEPARTMENT OF CONSERVATION COST ESTIMATE REGULATIONS FOR OIL AND GAS OPERATIONS DIVISION 2,

CHAPTER 4. DEVELOPMENT, REGULATION, AND CONSERVATION OF OIL AND GAS RESOURCES NOTICE IS HEREBY GIVEN that the California Department of Conservation (Department) proposes to adopt the regulations described below after consid - ering all comments, objections, and recommendations regarding the proposed action. WRITTEN COMMENT PERIOD AND PUBLIC COMMENT HEARING Any person, or his or her authorized representative, may submit written statements, arguments, or com - ments related to the proposed regulatory action to the Department.

Comments may be submitted by email to: CalGEMCostEstimates@conservation.ca.gov or by mail to: Department of Conservation 715 P Street, MS 1907 Sacramento, CA 95814 Attention: Cost Estimate Regulations The written comment period closes at 12 mid - night on October 4, 2023. The Department will only consider comments received at the Department’s of - fices by that time. Public Hearing Any interested person, or his or her authorized rep - resentative, may present, either orally or in writing, comments regarding the proposed action at the virtual public hearing to be held on October 3, 2023, at 5:30 p.m.

Register for the public hearing on zoom by clicking HERE. Or join by Telephone: US Toll 213–787–0529 US Toll Free 888–808–6929 Conference Code 847183 Accessibility If you have a disability and require a reasonable ac- commodation to fully participate in this event, please contact Sarah Rubin, Outreach and Engagement Co -

CALIFORNIA REGULATORY NOTICE REGISTER 2023, VOLUME NUMBER 33-Z 1064 ordinator as soon as possible to discuss your acces - sibility needs. Email: Sarah.Rubin@conservation.ca.gov Phone: (916) 214–5731 Translation and

interpretation services in Spanish, Vietnamese, Chinese (simplified), Tagalog, Punjabi, and Hmong may be provided upon request. To ensure availability of these services, please make your re - quest no later than ten working days prior to the public hearing by contacting Sarah Rubin, Outreach and En - gagement Coordinator. Email: Sarah.Rubin@conservation.ca.gov Phone: (916) 214–5731 Se podrán proporcionar servicios de traducción e interpretación a petición previa.

Para poder garantizar la disponibilidad de estos servicios, asegúrese de rea - lizar su solicitud a más tardar diez días hábiles antes de la reunión comunitaria comunicándose con Sarah Rubin, Coordinadora de Alcance y Participación. Correo electrónico: Sarah.Rubin@conservation.ca.gov Teléfono: (916) 214–5731 AUTHORITY AND REFERENCE Pursuant to the authority vested by California Pub - lic Resources Code (Pub.

Resources Code or PRC)) sections 3013 and 3106, and to implement, interpret, or make specific sections 3011, 3106, and 3205.7 of the Public Resources Code, the Department proposes to add sections 1753, 1753.1, 1753.1.1, 1753.1.2, 1753.2, 1753.2.1, 1753.2.2, 1753.3, 1753.3.1, and 1753.3.2 with- in the California Code of Regulations, title 14, divi - sion 2,

chapter 4, subchapter 2,

article 1. INFORMATIVE DIGEST/POLICY STATEMENT Existing Law The California Geologic Energy Management Divi- sion (CalGEM), within the Department of Conserva - tion, supervises and regulates oil, gas, and geothermal well operations, including their attendant facilities, throughout the state. (See Public Resources Code, § 3106). CalGEM carries out its regulatory author - ity to encourage the wise development of oil and gas resources, while preventing damage to life, health, property, and natural resources. More specifically, per Public Resources Code

section 3106, CalGEM super - vises the decommissioning and abandonment of both wells and facilities attendant to oil and gas produc - tion. CalGEM’s duties include the protection of public health and safety and environmental quality, including reduction and mitigation of greenhouse gas emissions associated with the development of hydrocarbon re - sources. (Pub. Resources Code (PRC), § 3011.) In 2008, the California State Legislature substan - tially strengthened and clarified CalGEM’s authority to regulate oil and gas production facilities (AB 1960, Nava,

Chapter 562, Statutes of 2008, in particular Pub. Resources Code, §§ 3270 et seq.) In October 2019, Governor Newsom signed into law Senate Bill 551 (Jackson,

Chapter 774, Statutes of 2019) adding Public Resources Code

section 3205.7, which requires every operator to submit a report demonstrat- ing the total estimated costs related to the plugging and abandonment of all of their wells and decommis - sioning of all attendant facilities, including any need - ed site remediation. Legislative history suggests that the bill’s authors and supporters were concerned about operator insolvencies leaving the state responsible for decommissioning costs.

Author Jackson said we need “to begin assessing these costs in a systematic, whole- sale, across–the–board, thorough, comprehensive and regular way, or we risk entering into billions in liabili- ties with no plan and no recourse.” (Sen. Rules Com., Senate Floor Analysis, S.B. 551 2017–2018 Reg. Sess.) page 5.) To implement the new reporting requirement, Pub - lic Resources Code

section 3205.7 requires CalGEM to establish criteria that operators must adhere to when developing their cost estimates. The statute also requires CalGEM to establish a

schedule for operators to submit their initial reports such that at least one– half of the operators are required to submit an initial report by July 1, 2024, and all operators are required to submit an initial report by July 1, 2026. The July 1, 2024 date specified by the statute was not achieved due to delays in the rulemaking process. After initial submission, each operator is required to submit an up- dated report at least once every five years. Related to the addition of Public Resources Code

section 3205.7, effective January 1, 2020, Public Re - sources Code

section 3205.3 significantly augmented CalGEM’s bonding authority. Before adoption of Pub- lic Resources Code

section 3205.3, operators were generally required to post a bond based upon the num- ber of wells the operator operates and the depth of those wells. (Public Resources Code, §§ 3204, 3205.) With the adoption of Public Resources Code

section 3205.3, based on CalGEM’s evaluation of the opera - tor’s risk of desertion, CalGEM has broad authority to require an operator to provide additional security be - yond the minimum indemnity bond amounts required under Public Resources Code sections 3204 and 3205. (Public Resources Code § 3205.3, subdivision (a).) The additional security cannot exceed the lesser of CalGEM’s estimation of the reasonable cost of prop - erly plugging and abandoning all of the operator’s

CALIFORNIA REGULATORY NOTICE REGISTER 2023, VOLUME NUMBER 33-Z 1065 wells and decommissioning any attendant production facilities, or thirty million dollars. (Pub. Resources Code, § 3205.3, subdivision (a).) Although the reports required under Public Resources Code

section 3205.7 are not required for CalGEM to implement the new bonding authority, the cost estimate reports will be a valuable tool for implementation of that authority. Proposed Regulations The proposed regulations establish the criteria that operators would be required to use when preparing the cost estimate reports required under Public Resources Code

section 3205.7, allowing two different methods for making the required estimates. Method 1 is a pre - scribed methodology whereby an operator uses values developed by CalGEM to estimate the costs associ - ated with well plugging and abandonment, produc - tion facility decommissioning, and site remediation based upon the condition, location, and history of the operator’s assets. Method 2 allows for the operator to forego the assumed costs under Method 1 and de - velop their own site–specific cost estimates, providing the estimates are persuasively supported by detailed documentation. The proposed regulations also establish a

schedule for operators to submit their cost reports, grouping operators by recent per–well production volumes in a manner that is intended to ensure at least one–half of operators have a submission due date of January 1, 2025, which is the first quarterly date available after the regulations will be finalized. Remaining operators have a submission due date of July 1, 2026. Objectives and Benefits of the Proposed Regulations The proposed regulations are necessary to respond to the mandate of Public Resources Code

section 3205.7 to establish criteria that operators must utilize when preparing the required cost estimate reports. The two methodologies have complementary ben - efits. Method 1 will allow operators to complete the reports expeditiously by using conservative default cost amounts that CalGEM believes are unlikely to fall short of actual costs. Method 2 will be more la - bor intensive to complete but will allow the operator the opportunity to demonstrate that the default cost estimates of Method 1 do not accurately reflect cost associated with its assets. The establishment of a

schedule for operators to submit their cost estimate reports is also necessary to respond to the mandates of Public Resources Code

section 3205.7, including establishing staggered re - porting deadlines and a five–year recurring reporting cadence. Diminished per–well production volumes can be a risk indicator for potential desertion. Requir - ing operators with lower per–well production volumes to report first will generally provide for data on high - er–risk assets sooner. The proposed regulations will provide the additional benefits of assisting CalGEM with its implementation of its enhanced bonding authority under Public Re - sources Code

section 3205.3. Public Resources Code

section 3205.3, subdivision (b), outlines eight criteria CalGEM must consider in estimating the reasonable costs of properly abandoning an operator’s wells and decommissioning the attendant production facilities, including any cost estimate submitted by the operator. The methodology contemplated by these regulations considers the applicable factors from Public Resourc - es Code

section 3205.3, subdivision (b), and as such will streamline implementation of Public Resources Code

section 3205.3. The proposed regulations will also have the benefit of furthering CalGEM’s mandates under Public Re - sources Code sections 3011 and 3106 of preventing damage to life, health, property, and natural resources and protecting public health and the environment.

By ensuring CalGEM and the state have data and analysis available regarding the costs associated with end–of– life remediation of oil and gas operations, this rule - making will allow the state to begin assessing these costs in a comprehensive and regular way, help edu - cate stakeholders on potential future costs, allow for identification of changing cost trends over time, and where appropriate, inform appropriate bonding re - quirements. Taking these steps now ensures the state can begin to plan the most appropriate approach to managing these risks and costs.

CONSISTENCY WITH COMPARABLE FEDERAL STATUTE AND REGULATION The proposed regulations are not inconsistent or incompatible with federal statutes or regulations. The Bureau of Land Management (BLM) has overlapping jurisdiction over oil and gas production operations on federal land, but BLM’s regulations do not require operators to submit cost estimate reports similar to what is required under Public Resources Code

section 3205.7. The US Department of Transportation, Pipeline and Hazardous Materials Safety Administration (PHMSA) is the federal agency primarily responsible for pipeline regulation and safety. (49 USC, § 108, sub- division (b), (f).) It adopts regulations that prescribe minimum pipeline safety standards for the pipeline transportation of natural gas and hazardous liquids. (See 49 CFR, §§ 190–192, 195.) In California, the PHMSA requirements are implemented by the Pub - lic Utilities Commission on behalf of PHMSA. These regulations implementing the cost estimate reporting requirements of Public Resources Code

section 3205.7 do not conflict with the PHMSA requirements for test- ing and inspecting pipelines.

CALIFORNIA REGULATORY NOTICE REGISTER 2023, VOLUME NUMBER 33-Z 1066 CONSISTENCY WITH EXISTING STATE REGULATIONS CalGEM has determined that the proposed regula - tions are not inconsistent or incompatible with exist - ing state regulations. No other state agency is imple - menting the requirements of Public Resources Code

section 3205.7 or otherwise requires comparable cost estimate reporting. The additional reporting required by the proposed regulations would be cumulative to the numerous existing state reporting requirements and neither redundant nor incompatible with them. PLAIN ENGLISH REQUIREMENT The Department staff prepared the proposed regula- tions pursuant to the standard of clarity provided in Government Code

section 11349, subdivision (c), and the plain English requirements of Government Code sections 11342.580 and 11346.2, subdivision (a)(1). The proposed regulations are written in a manner to be easily understood by the persons that will use them. LOCAL MANDATE The Department has determined that the proposed action does not impose a mandate on local agencies or school districts. COST TO LOCAL AGENCIES This proposed action does not impose costs on any local agency or school district for which reimburse - ment would be required pursuant to

Part 7 (commenc- ing with

section 17500) of Division 4 of the Govern - ment Code. This proposal does not impose other non - discretionary costs or savings on local agencies. COST OR SAVINGS IN FEDERAL FUNDING This proposal does not result in any costs or savings in federal funding to the state. COST OR SAVINGS TO STATE AGENCIES Implementation of the requirements in the proposed regulations would entail CalGEM to incur additional staff hours for support and oversight of operator com- pliance with the established cost estimate method.

Through the five years of initial reporting, CalGEM will incur total expenses estimated to range between $1.8 million and $2.5 million from staff hours devoted to support and oversight operator compliance with the proposed regulations. Out of this total amount required, it is anticipated that CalGEM will incur expenses es - timated to range between $390,000 and $543,000 dur- ing the first year of regulatory implementation and an annual average between $350,000 and $500,000 from the second year to the fifth year of regulatory imple - mentation.

These expenditure ranges depend on the cost estimate method selected by operators. EFFECT ON HOUSING COSTS The Department has determined that the proposed regulation will have no significant effect on housing costs. IMPACT ON BUSINESS The proposed regulations will affect operators of oil and gas wells. The following reporting and com - pliance requirements will result from the proposed regulations: ● The proposed regulations will establish criteria that owners and operators of oil and gas wells must adhere to when complying with the require- ment of Public Resources Code

section 3205.7 to prepare and submit reports with cost estimates for plugging and abandoning each well, decom - missioning each facility, and remediating each well site. ● The proposed regulations will establish a sched - ule of deadlines for owners and operators of oil and gas wells to submit cost estimate reports in accordance with the requirement of Public Re - sources Code

section 3205.7. The Department has made an initial determination that the adoption of these regulations will not contrib- ute to the elimination of jobs and businesses in the oil and gas industry and will not create new business nor eliminate business within the State of California. IMPACT ON SMALL BUSINESS The Department has determined that the proposed regulations will most likely not affect small business. While the proposed regulations generate direct costs of compliance, those costs are minimal, amounting to no more than 0.14% of one year of profits for the aver- age operator.

COST IMPACTS ON A REPRESENTATIVE PRIVATE PERSON OR BUSINESS The Department drafted the proposed regulations after careful consideration of current best practices with regard to cost estimates for plugging and aban - doning oil and gas wells, decommissioning attendant facilities, and remediating well sites, as well as similar statutes and regulations implemented by other federal and state agencies.

CALIFORNIA REGULATORY NOTICE REGISTER 2023, VOLUME NUMBER 33-Z 1067 Additionally, the Department drafted the proposed regulations based on the requirements of Public Re - sources Code

section 3205.7. It has been argued that there is no cost associated with the regulation, that instead all costs are associated with the statutory re - quirement, but conservatively, the economic impact analysis assumes the economic impact is associated with the criteria being imposed by these regulations.

The following areas of the proposed regulations have been identified by the Department as potential - ly resulting in economic impact on a representative operator: ● The preparation and submission of an initial re - port with cost estimates for plugging and aban - doning each well, decommissioning each facility, and remediating each well site. ● The preparation and submission of follow–up re- ports no less frequently than five years after the initial report and each subsequent report with cost estimates for plugging and abandoning each well, decommissioning each facility, and remedi- ating each well site.

Other than these filing and reporting requirements, the agency is not aware of any cost impacts that a rep- resentative private person or business would necessar- ily incur in reasonable compliance with the proposed action. RESULTS OF THE ECONOMIC IMPACT ASSESSMENT/ANALYSIS Based upon its analysis, the Department determined: ● The proposed regulations will benefit the health and welfare of California residents, worker safe - ty, and the environment by providing a cost ba - sis to plan for safe decommissioning of wells and facilities associated with oil and gas production.

This will allow for good planning to ensure that wells, facilities, and sites are decommissioned and remediated to prevent future harms to Cali - fornia’s communities. Without this planning, it is likely that the responsibility to remediate many wells, facilities, and sites would fall to the state taxpayer. More information on the benefits of this rulemaking can be found in the Initial Statement of Reasons and the Economic Impact Analysis. ● The proposed regulations may affect the creation of jobs within the State of California.

The pro - posed regulations will not affect the elimination of jobs within the State of California. ● The proposed regulations will not affect the cre - ation of new businesses nor the elimination of ex- isting businesses within the State of California. ● The proposed regulations will not affect expan - sion of businesses currently doing business with- in the state. The proposed regulations satisfy CalGEM’s statu - tory mandate under Public Resources Code

section 3205.7 to: ● Require each operator of an oil or gas well to sub- mit a report to the Supervisor that demonstrates the operator’s total liability to plug and abandon all wells and to decommission all attendant pro - duction facilities, including site remediation. ● Develop criteria, including certain require - ments, to be used by operators for estimating costs to plug and abandon wells and decommis - sion attendant production facilities, including site remediation.

NO SIGNIFICANT STATEWIDE ADVERSE ECONOMIC IMPACT The Department has determined that the proposed regulations will not have a significant statewide ad - verse economic impact directly affecting business, in- cluding the ability of businesses within California to compete with businesses in other states. BUSINESS REPORTING REQUIREMENT These regulations will implement the requirements under Public Resources Code

section 3205.7 for the submission of information to the Department by busi- nesses that own or operate oil and gas wells. The Department finds that it is necessary for the health, safety, or welfare of the people of this state that the submission of information required by these regula - tions applies to the affected businesses. CONSIDERATION OF ALTERNATIVES In accordance with Government Code

section 11346.5, subdivision (a)(13), the Department must de- termine that no reasonable alternative it considered or that has otherwise been identified and brought to the attention of the Department that would be more effec- tive in carrying out the purpose for which the action is proposed or would be as effective and less burdensome to affected private persons than the proposed action or would be more cost–effective to affected private per - sons and equally effective in implementing the statu - tory 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 regulations during the written comment period or at any hearing scheduled to take statements or arguments that are relevant to the pro - posed action.

CALIFORNIA REGULATORY NOTICE REGISTER 2023, VOLUME NUMBER 33-Z 1068 CONTACT PERSONS Inquiries concerning the proposed administrative action may be directed to: Department of Conservation 715 P Street, MS 1907 Sacramento CA 95814 Attention: Cost Estimate Regulations Christine Hansen Regulations Manager Christine.Hansen@conservation.ca.gov Phone: 916–694–7577 Nicholas Pesci Regulations Analyst Nicholas.Pesci@conservation.ca.gov Phone: 916–208– 4190 The Department has made available the express terms of the regulation, the Initial Statement of Rea - sons, and all the information upon which the propos - al is based (the rulemaking record).

Copies of these documents are available on the Department website at: https://www.conservation.ca.gov/index/Pages/rule- making.aspx and via email from the contact persons listed above. AVAILABILITY OF CHANGED OR MODIFIED TEXT The Department will consider all timely and rele - vant comments received during the written comment period and at the public hearings above. Thereafter, the Department may adopt the proposed regulations in substantially the same form as described in this Notice.

If the Department makes any modifications to the text of the proposed regulations that are substantial, but sufficiently related to the original proposed text as described in this Notice, the Department will make the modified text (with changes clearly indicated) avail - able to the public for at least 15 days before adopting the proposed regulations as modified. The Department will accept written comments regarding modified reg- ulations for 15 days after the date upon which they are made available to the public.

Please send requests for copies of any modified regulations via email or mail to the persons identified as contact persons in this notice. AVAILABILITY OF THE FINAL STATEMENT OF REASONS Upon its completion, copies of the Final Statement of Reasons may be obtained by sending an inquiry to one of the contact persons above. The Final Statement of Reasons will also be available on the Department website at: https://www.conservation.ca.gov/index/ Pages/rulemaking.aspx.

AVAILABILITY OF DOCUMENTS ON THE INTERNET Copies of this Notice of Proposed Action, the Initial Statement of Reasons, and the text of the regulations in underline and strikeout can be accessed through our website at: https://www.conservation.ca.gov/index/ Pages/rulemaking.aspx. If you have any questions regarding the process of this proposed action, please contact the Department of Conservation by email at: CalGEMCostEstimates@ conservation.ca.gov. TITLE 15.

DEPARTMENT OF CORRECTIONS AND REHABILITATION NOTICE IS HEREBY GIVEN that the Secre - tary of the California Department of Corrections and Rehabilitation (CDCR or department), proposes to amend

section 3332 of Title 15, Division 3,

Chapter 1, regarding Administration and Supervision of Deten - tion Units. PUBLIC COMMENT PERIOD The public comment period begins August 18, 2023 and closes on October 3, 2023. Any person may sub- mit written comments by mail addressed to the prima- ry contact person listed below, or by email to rpmb@ cdcr.ca.gov, before the close of the comment period. For questions regarding the subject matter of the regu- lations, call the program contact person listed below. CONTACT PERSONS Primary Contact R. Ruiz Telephone: (916) 455–2244 Regulation and Policy Management Branch P.O.

Box 942883 Sacramento, CA 94283–0001 Back–Up Y. Sun Telephone: (916) 445–2269 Regulation and Policy Management Branch P.O. Box 942883 Sacramento, CA 94283–0001

CALIFORNIA REGULATORY NOTICE REGISTER 2023, VOLUME NUMBER 33-Z 1069 Program Contact T. Ramsey Telephone: (916) 445–8282 Division of Adult Institutions P.O. Box 942883 Sacramento, CA 94283–0001 PUBLIC HEARING Date and Time: October 4, 2023 10:00 a.m. to 11:00 a.m. Place: Department of Corrections and Rehabilitation Room 151 North 1515 S Street – North Building Sacramento, CA 95811 AUTHORITY AND REFERENCE Government Code

Section 12838.5 provides that commencing July 1, 2005, CDCR succeeds to, and is vested with, all the powers, functions, duties, respon - sibilities, obligations, liabilities, and jurisdiction of abolished predecessor entities, such as Department of Corrections, Department of the Youth Authority, and Board of Corrections. Penal Code (PC)

Section 5000 provides that com- mencing July 1, 2005, any reference to Department of Corrections in this or any code, refers to the CDCR, Division of Adult Operations. PC

Section 5050 pro- vides that commencing July 1, 2005, any reference to the Director of Corrections in this or any other code, refers to the Secretary of the CDCR. As of that date, the office of the Director of Corrections is abolished. PC

Section 5054 provides that commencing July 1, 2005, the supervision, management, and control of the State prisons, and the responsibility for the care, cus - tody, treatment, training, discipline, and employment of persons confined therein are vested in the Secretary of the CDCR. PC

Section 5055 provides that com - mencing July 1, 2005, all powers and duties previ - ously granted to and imposed upon the Department of Corrections shall be exercised by the Secretary of the CDCR. PC

Section 5058 authorizes the Director to prescribe and amend rules and regulations for the administration of prisons and for the administration of the parole of persons. PC

Section 5058.3 authorizes the Director to certify in a written statement filed with Office of Administrative Law that operational needs of the department require adoption, amendment, or repeal of regulation on an emergency basis. INFORMATIVE DIGEST/POLICY STATEMENT OVERVIEW The California Department of Corrections and Re - habilitation (CDCR or the department) proposes to amend

section 3332 of the California Code of Regu - lations, Title 15, for Contraband Surveillance Watch (CSW). The objective of placing an inmate on CSW is to retrieve suspected concealed contraband from the inmate, without physical intrusion if possible, to en - sure that contraband is not circulated into the inmate population, and to ensure the safety of the inmate sus- pected of having the concealed contraband.

This action will: ● Establish CDCR Form 114–CSW (12/16), Contra- band Surveillance Watch Log. ● Establish the factors that will be monitored dur - ing the Contraband Surveillance Watch. ● Establish a procedure for custody and medical staff observation of a person on Contraband Sur - veillance Watch. ● Establish a procedure for retaining a person un - der Contraband Surveillance Watch beyond the initial watch period. DOCUMENTS INCORPORATED BY REFERENCE None.

SPECIFIC BENEFITS ANTICIPATED BY THE PROPOSED REGULATIONS The proposed regulations increase openness and transparency in government by standardizing CSW record–keeping. This promotes fairness and social equality preventing discrimination as staff, inmates, and members of the public are able to conduct a more accurate search of an inmate’s CSW history. The pro- posed regulations may also benefit the health and wel- fare of California residents as inmate hygiene, dental hygiene, trash removal, and cell hygiene are monitored during CSW placement.

Additionally, standardizing CSW record–keeping may reduce the opportunities for conflict or physical violence within the institution. EVALUATION OF INCONSISTENCY/ INCOMPATIBILITY WITH EXISTING REGULATIONS Pursuant to Government Code 11346.5(a)(3)(D), the department has determined the proposed regulations are not inconsistent or incompatible with existing regulations. After conducting a review for any regula- tions that would relate to or affect this area, the depart- ment has concluded that these are the only regulations

CALIFORNIA REGULATORY NOTICE REGISTER 2023, VOLUME NUMBER 33-Z 1070 that concern the administration and supervision of detention units. LOCAL MANDATES This action imposes no mandates on local agencies or school districts, or a mandate which requires reim - bursement of costs or savings pursuant to Government Code Sections 17500–17630.

FISCAL IMPACT STATEMENT ● Cost or savings to any state agency: None. ● Cost to any local agency or school district that is required to be reimbursed: None. ● Other nondiscretionary cost or savings imposed on local agencies: None. ● Cost or savings in federal funding to the state: None. EFFECT ON HOUSING COSTS The department has made an initial determination that the proposed action will have no significant effect on housing costs.

COST IMPACTS ON REPRESENTATIVE PRIVATE PERSONS OR BUSINESSES The department is not aware of any cost impacts that a representative private person or business would necessarily incur in reasonable compliance with the proposed action.

SIGNIFICANT STATEWIDE ADVERSE ECONOMIC IMPACT ON BUSINESS The department has made an initial determination that the proposed regulations will not have a signifi - cant statewide adverse economic impact directly af - fecting business, including the ability of California businesses to compete with businesses in other states, because the proposed regulations place no obligations or requirements on any business. EFFECT ON SMALL BUSINESSES The department has determined that the proposed regulations will not affect small businesses.

This ac - tion has no significant adverse economic impact on small business because they place no obligations or requirements on any business. RESULTS OF THE ECONOMIC IMPACT ASSESSMENT The department has determined that the proposed regulation will have no effect on the creation of new, or the elimination of existing, jobs or businesses within California, or effect the expansion of businesses cur - rently doing business in California. The department has determined the proposed regulations will have no effect on the state’s environment.

The proposed regu - lations may benefit worker safety and California resi - dents by creating safer institutions for staff, inmates, and visitors as standardizing CSW records may reduce opportunities for conflict or physical violence within institutions.

CONSIDERATION OF ALTERNATIVES 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 the action is proposed, would be as effective and less burdensome to affected private persons than the proposed regulatory action, or would be more cost–effective to affected private persons and equally effective in implementing the statutory policy or other provisions of law.

Interested persons are invited to present statements or arguments with respect to any alternatives to the changes pro - posed at the scheduled hearing or during the written comment period. AVAILABILITY OF PROPOSED TEXT AND INITIAL STATEMENT OF REASONS The department has prepared and will make avail - able the text and the Initial Statement of Reasons (ISOR) of the proposed regulations.

The rulemaking file for this regulatory action, which contains those items and all information on which the proposal is based (i.e., rulemaking file) is available to the public upon request directed to the department’s contact per- son. The proposed text, ISOR, and Notice of Proposed Regulations will also be made available on the depart- ment’s website: www.cdcr.ca.gov. AVAILABILITY OF THE FINAL STATEMENT OF REASONS Following its preparation, a copy of the Final State- ment of Reasons may be obtained from the depart - ment’s contact person.

CALIFORNIA REGULATORY NOTICE REGISTER 2023, VOLUME NUMBER 33-Z 1071 AVAILABILITY OF CHANGES TO PROPOSED TEXT After considering all timely and relevant comments received, the department may adopt the proposed regulations substantially as described in this Notice. If the department makes modifications which are suf - ficiently related to the originally proposed text, it will make the modified text, with the changes clearly indi- cated, available to the public for at least 15 days before the department adopts, amends or repeals the regu - lations as revised.

Requests for copies of any modi - fied regulation text should be directed to the contact person indicated in this Notice. The department will accept written comments on the modified regulations for at least 15 days after the date on which they are made available. TITLE 22. DEPARTMENT OF HEALTHCARE ACCESS AND INFORMATION DIVISION 7,

CHAPTER 11,

ARTICLE 1 TO 7, SECTIONS 97300–97370: HEALTH CARE PAYMENTS DATA PROGRAM This notice of proposed rulemaking commences the Department of Health Care Access and Information’s (Department or HCAI) rulemaking to make perma - nent the December 2021 emergency regulations for the Health Care Payments Data Program (HPD) after considering all comments, objections, and recommen- dations regarding the proposed action. The Depart - ment also proposes some updates and changes to the 2021 emergency regulations. I. 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 his or her authorized representative, no later than 15 days be- fore the close of the written comment period. II. WRITTEN PUBLIC COMMENT PERIOD AND CONTACT PERSON Any interested person, or his or her authorized rep - resentative, may submit written comments relevant to the proposed regulatory action. All comments must be received by the Department by 5:00 p.m. on October 3, 2023.

Inquiries and written comments regarding the proposed action should be addressed to the primary contact person named below. Comments delivered by email are suggested. Comments may also be hand de - livered or mailed.

Sherry Mung, Health Program Specialist II Office of Information Services Department of Health Care Access and Information|Telephone: (916) 326–3939 Email: SherryMung@hcai.ca.gov Mailing address: 2020 West El Camino Avenue, Suite 1100 Sacramento, CA 95833–1880 Inquiries and comments may also be directed to the backup contact person at the same mailing address: Suzanne Hermreck, Health Program Specialist II Office of Information Services Department of Health Care Access and Information Telephone: (916) 326–3841 Email: Suzanne.Hermreck@hcai.ca.gov III. AUTHORITY AND REFERENCE Health and Safety Code (HSC)

section 127673(

f) authorizes the Department to adopt these proposed regulations. The specific code sections that are being implemented, interpreted, or made specific are HSC sections 127671, 127671.1, 127673, 127673.1, 127673.2, and 127673.4. IV. INFORMATIVE DIGEST/POLICY STATEMENT OVERVIEW a.

Summary of Existing Laws and Effect of the Proposed Regulations Existing law requires the Department to estab - lish the HPD to collect health care data from health plans, insurers, government agencies, and others. Furthermore, existing law requires the Department to “substantially complete” the development of the HPD System no later than July 1, 2023. The De - partment substantially completed the development of the HPD System through the release of the HPD Program’s first public report, the HPD Snapshot vi - sualization, on June 27, 2023.

The HPD Snapshot can be viewed at https://hcai.ca.gov/visualizations/ healthcare–payments–data–hpd–snapshot/ . The primary purpose of this rulemaking proposal is to make permanent the emergency regulations the Department adopted on December 20, 2021, which started data collection for the HPD. The emergency rulemaking added

Chapter 11 of Division 7 of Title 22 of the California Code of Regulations (sections 97300 to 97370). With this rulemaking, the Department will

CALIFORNIA REGULATORY NOTICE REGISTER 2023, VOLUME NUMBER 33-Z 1072 be able to continue collecting data for the HPD and this rulemaking permanently establishes the following to implement the HPD: ●

Definitions for HPD (section 97300); ● A process for entities to become voluntary data submitters (section 97305); ● Who mandatory HPD data submitters are, in - cluding exemptions such as plan size thresholds (sections 97300(j), 97300(k), 97310, and 97314); ● Obligations for mandatory data submitters to co - ordinate data submissions with their contractors (sections 97318 and 97346); ● Registration processes for mandatory submitters and any entity transmitting data for mandatory submitters (sections 97330 to 97334); ● Frequency and timelines for data submissions (section 97340); ● Content, specification, and format requirements for data submissions (section 97342 to 97344); ● A process for test data submissions (section 97348); ● Special rules for the start of the HPD, including initial registrations, the start of data collection, and collection of historical data (sections 97349 to 97352); ● The process for HCAI to review and accept/reject data submissions (sections 97360 to 97362); and ● The process for data submitters to request a vari - ance if they are unable to submit data as required (section 97370).

The Department also proposes to update and mod - ify parts of the emergency regulations because of up - dates to documents incorporated by reference, and to clarify data collection requirements for the HPD data collection. These changes include: ● Incorporating new versions of the Common Data Layout for All–Payer Claims Databases (APCD– CDL™) from Version 2.1 to 3.0.1 and according- ly, a new version of the HPD Data Submission Guide from Version 1.0 to 2.0 (section 97300(

a) and (c)); ● Clarification of registration requirements and re - quiring re–registrations each year (sections 97330 to 97334); ● For the transition to the new APCD–CDL™, es - tablishing a special timeline for January 2024 data submissions (section 97340(c)); ● Making test file submission discretionary instead of mandatory (section 97348); and ● Moving the requirement for initial dental plan registration from

section 97330 to new

section 97349. b. Policy Statement Overview As stated in HSC

section 127671(b), the HPD was created because health care data is reported and col - lected through many disparate systems which makes it difficult to study California’s health care system. This creates substantial hurdles to improve health care in California. To address this problem, the HPD’s pur - pose is to collect and centralize health care data from various sources and process the data in a way that it can be used by the state and the public to learn and seek improvements in health care in California while protecting patient privacy.

As required by statute, the HPD’s purpose is to col- lect health care data from the entities that make pay - ments for health care, i.e., commercial health plans and health insurers, and government health plans. The December 2021 emergency regulations were pro- mulgated to initiate HPD data collection and identi - fied mandatory data submitters, specified data to be collected, created a process for data submission, and set a timeline for data collection. Data collection for the HPD Program is now occurring for health plans, health insurers, and government plans and this rule - making will allow this to continue.

Regarding benefits of this rulemaking, this rulemak- ing will allow HPD to continue collecting health care data to help inform the state’s approach to improving health care in California. As stated in HSC

section 127671, by collecting, aggregating, and processing this health care data, the HPD will provide greater transparency about California’s health care system to the State and the public, which will inform health care policy decisions. By studying HPD data, Califor- nia will learn more about its health care system and hopefully will lead to improvements in public health, reduction of health disparities, advancement of health coverage, reduction of health care costs, and better oversight of the health system and health care compa- nies.

It is also hoped that the public and government agencies will also use HPD data “to develop innova - tive approaches, services, and programs that may have the potential” to improve health care for Californians. c. Existing Comparable Federal Regulation or Statute The Department is not aware of any comparable fed- eral statute or regulation to the proposed regulations. d.

Evaluation of Inconsistency/Incompatibility with Existing State Regulations The Department evaluated the proposed regulations and determined that these proposed regulations are not inconsistent with or incompatible with existing state regulations.

CALIFORNIA REGULATORY NOTICE REGISTER 2023, VOLUME NUMBER 33-Z 1073 e. Documents Incorporated by Reference The following are documents HCAI intends to incorporate by reference through these proposed regulations: ● The Common Data Layout for All–Payer Claims Databases, Version 2.1, released July 1, 2021; ● The Common Data Layout for All–Payer Claims Databases, Version 3.0.1, released April 1, 2023; ● The Health Care Payments Data Program: Data Submission Guide, Version 1.0, dated November 23, 2021; and ● The Health Care Payments Data Program: Data Submission Guide, Version 2.0, dated July 17, 2023. V.

M ANDATE ON LOCAL AGENCY OR SCHOOL DISTRICT HCAI determined that these regulations do not im- pose a mandate on local agencies or school districts because it does not mandate a new program or a high- er level of service of an existing program pursuant to

Part 7 (commencing with

Section 17500) of Division 4 of the Government Code. These regulations are appli- cable to public and private entities and are not unique to local government. VI. F ISCAL IMPACT ESTIMATES The Department has made the following fiscal im - pact estimates: a. C ost or savings to any state agency: None. b. C ost to any local agency or school district which must be reimbursed in accordance with Government Code sections 17500 through 17630: None. c. O ther nondiscretionary cost or savings imposed on local agencies: None. d. C ost or savings in federal funding to the state: None. VII.

H OUSING COSTS The Department determined that the proposed regu- lations will not impact housing costs. VIII. S IGNIFICANT STATEWIDE ADVERSE ECONOMIC IMPACT DIRECTLY AFFECTING BUSINESS, INCLUDING ABILITY TO COMPETE HCAI has determined that the permanent adoption of the HPD emergency regulations would not have a significant adverse economic impact on any business- es in California who are mandated by statute, not these regulations, to submit data for the HPD program.

The emergency regulations implemented the statutory re - porting requirement for the HPD Program and HCAI was successful in collecting data from mandatory and voluntary plans from the adoption of the emergency regulations to present. Regardless, to understand what impacts there may be to mandatory plans, HCAI administered a survey to all currently registered plans and submitters. The survey assessed the one time and ongoing costs for complying with HPD emergency regulations, whether jobs were created or eliminated, and the types of jobs used to support HPD data collection.

A total of six health plans and insurers responded to the survey rep- resenting 16 data submitters. The size of these health plan and insurer respondents ranged from providing medical coverage to 89,000 to 8.2 million covered lives. The results of the survey concluded that there was an economic impact to registered plans and sub - mitters (see

part IX below), however, the impact did not eliminate jobs. One respondent concluded that the requirements of HPD data collection created an esti - mated one to three jobs. This supports HCAI’s posi - tion that this regulatory action does not have a signifi- cant adverse economic impact on businesses required to report for the HPD program. IX.

C OST IMPACTS ON REPRESENTATIVE PRIV ATE PERSON OR BUSINESS As stated above, HCAI administered a survey to all currently registered plans and submitters to assess the one time and ongoing costs for complying with HPD emergency regulations, whether jobs were created or eliminated, and the types of jobs used to support HPD data collection. A total of six health plans and insur - ers responded to the survey representing 16 data sub - mitters. The total covered lives served by these health plan and insurer respondents ranged from 89,000 to 8.2 million.

Plans at the lower range of total covered lives membership (with annual revenues at least in the tens of millions of dollars 1) indicated that the estimat - ed one–time cost were $50,000 or less and ongoing annual costs were $25,000 or less. This is compared to plans at the higher range of total covered lives mem - bership (with annual revenues in the billions of dol - lars 2) who indicated the estimated one–time cost were $1 million and estimated annual ongoing costs were $650,000.

Based on the results of the survey, HCAI estimates the total one–time cost for all submitters 1 Information from the California Department of Managed Health Care, “Health Plan Financial

Summary Report,” available at https://wpso.dmhc.ca.gov/flash/ (last visited on June 20, 2023). 2 See above footnote.

CALIFORNIA REGULATORY NOTICE REGISTER 2023, VOLUME NUMBER 33-Z 1074 implementing the requirements of HPD data collec - tion regulations to be approximately $11,659,084; the total ongoing costs to be approximately $5,052,290; and the total statewide costs to comply with this reg - ulatory action for initial start–up costs and the first year of annual costs to be $16,711,974. Based on this information, HCAI has determined that there is a cost impact to registered plans and submitters, however the impact does not impede health plans and submitters from complying with the requirements of HPD data collection. X.

STATEMENT OF THE RESULTS OF THE ECONOMIC IMPACT ANALYSIS (EIA) The Department surveyed those health plans, insur- ers, and public self–insured entities which are current- ly registered and submitting data to the HPD. From this, the Department concludes that this regulatory action: a. Will likely not create jobs within the state; b. Will likely not eliminate jobs within the state; c. Will not create new businesses; d. Will not eliminate existing businesses; and e. Will not affect the expansion of businesses cur - rently doing business in the state.

As stated previously in the Informative Digest, this regulatory action is to implement statutory require - ments which are intended to improve the health and welfare of California residents by having HCAI col - lect, aggregate and process fragmented health care data in the HPD. In this way, the HPD will provide greater transparency about California’s health care system to the state and the public, which will inform health care policy decisions.

By studying HPD data, California will learn more about its health care sys - tem and hopefully will lead to improvements in public health, reduction of health disparities, advancement of health coverage, reduction of health care costs, and better oversight of the health system and health care companies. It is also hoped that the public and government agencies will also use HPD data “to de - velop innovative approaches, services, and programs that may have the potential” to improve health care for Californians.

Furthermore, there are no anticipated benefits of these regulations to worker safety or the state’s environment. XI. BUSINESS REPORT The proposed regulatory requirements for business- es to submit health care data to HPD is a statutory mandate and does not originate from this regulatory action. The proposed regulations require HPD mandatory data submitters and their delegated submitters to reg - ister and to re–register each year. To the extent these are considered “reports,” HCAI finds that this is nec - essary for the health, safety, and welfare of the public that this applies to businesses. XII.

EFFECT ON SMALL BUSINESS The Department has determined that the regulations will have no effect on small businesses. The health plans and insurers who are mandated to report data to the HPD program are not part of the small business community. The smallest health plan who is mandated to report for the HPD program is estimated to have between 50–200 employees and has a total annual rev- enue of over $35 million. All other health plans and insurers have greater than 200 employees and annual revenues greater than $35 million. XIII.

REASONABLE ALTERNATIVE 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 the action is proposed, would be as effective and less burdensome to affected private persons than the proposed action, or would be more cost–effective to affected private persons and equally effective in implementing the statutory policy or other provision of law.

The Department invites interested persons to pres - ent statements or arguments with respect to alterna - tives to the proposed rulemaking action during the written comment period. XIV. AVAILABILITY OF EXPRESS TERMS, INITIAL STATEMENT OF REASONS, AND INFORMATION UPON WHICH PROPOSED RULEMAKING IS BASED The Department will have the entire rulemaking file available for inspection and copying throughout the rulemaking process at its office at the address given for the contact persons.

As of the date this no - tice is published, the rulemaking file consists of this notice, the text of the proposed regulations, all docu - ments incorporated by reference as identified in this notice, the initial statement of reasons, an economic impact analysis, and all information upon which this proposed rulemaking is based. Copies may be ob - tained by contacting the listed contact persons using the contact information above and parts of the rule -

CALIFORNIA REGULATORY NOTICE REGISTER 2023, VOLUME NUMBER 33-Z 1075 making file are available at https://hcai.ca.gov/about/ laws–regulations/. XV. AVAILABILITY OF SUBSTANTIAL CHANGES TO ORIGINAL PROPOSAL After considering all timely and relevant comments received, the Department may adopt the proposed regulations substantially as described in this notice.

If the Department makes modifications which are suf- ficiently related to the originally proposed text, it will make the modified text, with the changes clearly indi- cated, available to the public for at least 15 days before the Department adopts the regulations as revised. Please send requests for copies of the modified text to the listed contact person. The modified text will also be available on the website at https://hcai.ca.gov/ about/laws–regulations/. The Department will accept written comments on the modified regulations for 15 days after the date on which they are made available. XVI.

AVAILABILITY OF FINAL STATEMENT OF REASONS The Final Statement of Reasons, including all of the comments and responses, will be available, after its completion, through the Department’s website at https://hcai.ca.gov/about/laws–regulations/. The Final Statement of Reasons will also be available from the above contact persons. XVII. AVAILABILITY OF DOCUMENTS ON THE INTERNET Copies of this notice, the initial statement of rea - sons, the text of the proposed regulations, and other documents can be accessed through the Department’s website at https://hcai.ca.gov/about/laws–regulations/. TITLE 23.

STATE WATER RESOURCES CONTROL BOARD DIVISION 3,

CHAPTER 3.5 — URBAN WATER USE EFFICIENCY AND CONSERVATION

ARTICLE 1 SUBJECT: MAKING CONSERVATION A CALIFORNIA WAY OF LIFE The State Water Resources Control Board (State Water Board or Board) proposes to adopt the proposed regulation described below, after considering all com- ments, objections, and recommendations regarding the proposed action. PROPOSED REGULATORY ACTION The State Water Board proposes to add California Code of Regulations, title 23, division 3,

chapter 3.5,

article 1, sections 965–975 and 978. Existing articles 1, 2, and 3 will be renumbered to articles 2, 3, and 4, respectively. The proposed new sections would es - tablish a new foundation for long–term improvements in water conservation and drought planning to adapt to climate change and the resulting longer and more intense droughts in California.

The proposed Mak- ing Conservation a California Way of Life regulation (proposed regulation) would require Urban Retail Wa- ter Suppliers (suppliers) to calculate and adhere to wa- ter use objectives, implement Commercial, Industrial, and Institutional (CII) performance measures, and submit annual progress reports. PUBLIC HEARING The State Water Board will conduct a public hearing on October 4, 2023. The public hearing will include an overview of the regulatory timeline and process, along with presentations led by urban retail water suppliers and other interested parties on the proposed regulation.

At the hearing, any person may present oral or written comments relevant to the proposed ac - tion described in this notice, in addition to the written comment opportunity described below. Board staff will provide an overview of the proposed regulation and key provisions, followed by an opportunity for the public to comment. While a quorum of the State Water Board may be present, the Board will not take formal action at the public hearing. The meeting will be held at the Joe Serna Jr. CalEPA Building, 1001 I Street, Sacramento, CA 95814, with the option to participate remotely.

Notices will be sent to those who subscribe to the “Water Conservation Regulations” GovDelivery topic list. Information about the public hearing will be post- ed on the webpage: https://www.waterboards.ca.gov/ water_issues/programs/conservation_portal/regs/wa - ter_efficiency_legislation.html. LANGUAGE SERVICES To request translation of documents,

interpretation services, or to submit a language access complaint, please submit your request by September 22, 2023, us- ing one of the following options: 1. Complete online request at: bit.ly/ LanguageAccessForm. 2. Call (916) 341–5254. 3. Email OPP–LanguageServices@Waterboards. ca.gov.

CALIFORNIA REGULATORY NOTICE REGISTER 2023, VOLUME NUMBER 33-Z 1076 SPECIAL ACCOMMODATION REQUEST To request special accommodations or language needs, please contact the Clerk to the Board at (916) 341–5611 as soon as possible, but no later than 10 busi- ness days before the scheduled Board hearing. Para solicitar comodidades especiales o necesidades de otro idioma, por favor llame a la oficina del Con - sejo al (916) 341–5611 lo más pronto posible, pero no menos de 10 días de trabajo antes del día programado para la audiencia del Consejo. WRITTEN COMMENT PERIOD AND SUBMITTAL OF COMMENTS [Gov.

Code, § 11346.4(a), § 11346.5(a)(15)] Any interested person may submit written com - ments relevant to the proposed regulatory action to the Clerk to the State Water Board. Any written com - ments pertaining to the proposed regulation, regard - less of the method of transmittal, must be received by the Clerk by October 17, 2023, which is hereby des - ignated as the close of the written comment period. Comments received after this date will not be consid - ered timely. Written comments may be submitted via any of the following methods: 1. By email to: commentletters@waterboards. ca.gov.

The State Water Board requests but does not require that email transmission of com - ments, particularly those with attachments, con - tain the regulation package identifier “Comment Letter—Proposed Making Conservation a California Way of Life Regulation” in the sub- ject line to facilitate timely identification and re - view of the comment. 2. By fax transmission to: (916) 341–5620. The State Water Board requests but does not re - quire that faxed comments contain the subject line “Comment Letter—Proposed Making Conservation a California Way of Life Regulation.” 3.

By mail to: Clerk to the Board, Courtney Tyler, State Water Resources Control Board, P.O. Box 100, Sacramento, CA 95812–0100. 4. Hand–delivered to: Clerk to the Board, Courtney Tyler, State Water Resources Control Board, 1001 I Street, 24th Floor, Sacramento, CA 95814. The State Water Board requests but does not require that written comments be sent by mail or that hand– delivered be submitted in triplicate. The State Water Board requests, but does not re - quire, that, if reports or articles in excess of 25 pages are submitted in conjunction with the comments, the commenter provide a

summary of the report or

article and describe the reason for which the report or

article is being submitted or its relevance to the proposed regulation. All comments, including email or fax transmis - sions, should include the author’s name and U.S. Post- al Service mailing address in order for the State Water Board to provide copies of any notices that may be required in future. Due to the limitations of the email system, emails larger than 15 megabytes (MB) may be rejected and will not be delivered and received by the State Water Board. Therefore, emails larger than 15 MB should be submitted under separate emails or via another form of delivery.

Please note that under the California Public Records Act (Gov. Code, § 7920.000 et seq.), your written and oral comments, attachments, and associated contact information (e.g., your address, phone, email, etc.) be- come part of the public record and can be released to the public upon request. If you would like to request a copy of the public comment letters received by the Board for this item, send an email to commentletters@waterboards.ca.gov and identify that you are requesting copies of public comments for the proposed Making Conservation a California Way of Life Regulation.

To be added to the mailing list for this rulemaking and to receive notification of updates for this rule - making, you may subscribe to the GovDelivery list at “ Water Conservation Regulations ” by selecting “General Interests,” then selecting “Water Conserva - tion Regulations.” AUTHORITY AND REFERENCE The State Water Board proposes to adopt regula - tions implementing, interpreting, and making spe - cific Water Code (Wat. Code) sections 275, 10609, 10609.2, 10609.4, 10609.6, 10609.8, 10609.9, 10609.10, 10609.12, 10609.14, 10609.16, 10609.20, and 10609.22.

Authority: Sections 275, 1058, 10609.2, 10609.10, 10609.20, and 10609.28, Water Code. References:

Article X,

Section 2, California Con - stitution; Sections 3080, 4080, 4100, and 4185, Civil Code; Sections 8558 and 51201, Government Code; Sections 116275 and 116530, Health and Safety Code; Sections 102, 104, 105, 350, 1122, 1123, 1124, 1846, 1846.5, 10608.12, 10608.20, 10608.34, 10609.2, 10609.4, 10609.6, 10609.8, 10609.9, 10609.10, 10609.12, 10609.20, 10609.24, 10609.26, 10609.27, 10609.28, 10611.3, 10617, 10632, and 10728, Water Code.

CALIFORNIA REGULATORY NOTICE REGISTER 2023, VOLUME NUMBER 33-Z 1077 CALIFORNIA ENVIRONMENTAL QUALITY ACT Pursuant to

section 10609.34 of the Water Code, the proposed regulation is exempt under California Code of Regulations, title 14,

section 15308 (Class 8 exemption). The proposed action does not involve the relaxation of existing water conservation or water use standards. INFORMATIVE DIGEST [Gov. Code, § 11346.5(a)(3)]

Summary of Existing State Law and Regulations In 2018, the California State Legislature enacted Senate Bill (SB) 606 and Assembly Bill (AB) 1668 (together, 2018 conservation legislation) to establish a new foundation for long–term improvements in water conservation and drought planning to adapt to climate change and the longer and more intense droughts that are likely to result in California. Water Code

section 10609.2 directs the State Water Resources Control Board (State Water Board or Board) to adopt long– term standards for the efficient use of water, variances for unique uses that can have a material effect on urban water use, and guidelines and methodologies pertain - ing to the calculation of an urban water use objective (objective). Water Code

section 10609.10, subdivision (

d) directs the Board to adopt performance measures for Commercial, Industrial, and Institutional (CII) wa- ter use. Water Code sections 10609.22 and 10609.24 direct each Urban Retail Water Supplier (supplier) to annually calculate its objective and provide a report pertaining to the objective and implementation of the CII performance measures.

The Board’s proposed Making Conservation a California Way of Life regula- tion (proposed regulation) would establish methodolo- gies and guidelines to calculate the objectives; stan - dards for efficient residential outdoor water use and ef- ficient use of water on CII landscapes with Dedicated Irrigation Meters (DIMs); CII performance measures; and annual reporting requirements. Water Code

section 10609.2, subdivision (

d) directs that the proposed regulation exceeds the targets estab- lished by SB X7–7. Water Code

section 10609, subdivision (c)(3) directs that the “long–term standards and urban water use objectives should acknowledge the shade, air quality, and heat–island reduction benefits provided to com - munities by trees through the support of water–effi - cient irrigation practices that keep trees healthy.” Water Code

section 10609, subdivision (c)(2) directs that the “long–term standards and urban water use ob- jectives should advance the state’s goals to mitigate and adapt to climate change.” Comparable Federal Statute and Regulations [Gov. Code § 11346.5(a)(3)(B)] There are no federal regulations or statutes that ad - dress the specific subject addressed by the proposed regulation. Effect of the proposed rulemaking [Gov. Code § 11346.5(a)(3)(A)] The proposed regulation creates a new framework for managing urban water use by California’s largest water suppliers.

It would establish unique efficiency goals for each supplier based on local conditions, while leaving flexibility to implement locally appropriate solutions. In addition to establishing long–term stan - dards for the efficient use of water throughout Califor- nia’s urban areas and a framework that incorporates local conditions and provides flexibility to suppliers to make locally appropriate implementation choices, the proposed regulation is expected to save a significant amount of water.

A recent assessment of urban water supplies found that adopting proven technologies and practices could reduce urban water use in California by 2.0 million to 3.1 million acre–feet per year (AFY), or by 30 to 48 percent (Cooley et al., 2022). The proposed regulation would help California begin to realize that potential; by 2035, it is expected to reduce statewide urban wa - ter use by approximately 15 percent from 2020 lev - els.

The Board estimates that the proposed regulation would save approximately 235,000 acre–feet of water in 2025 (compared to the assumed 2025 baseline wa - ter use) and increased amounts in subsequent years, reaching almost 440,000 acre–feet of water in 2040 (compared to the assumed 2040 baseline water use). In this way, the proposed regulation would help to realize the California Water Supply Strategy goal of building upon the conservation achievements of the last two decades to reduce annual water demand in towns and cities by at least half a million acre–feet by 2030.

The proposed regulation would help realize the wa- ter savings outlined in the water supply strategy. It is also expected to create indirect benefits beyond water savings. While not the primary goal of the proposed regulation, implementation of the framework is likely to result in suppliers making investments and pro - grammatic changes that encourage individuals, busi - nesses, and local governments to change how they use water.

Such changes have the potential to advance the State Water Board’s mission of preserving, enhanc - ing, and restoring the quality of water resources and the statutory directive to advance California’s climate change mitigation and adaptation goals. The proposed regulation can also support statewide policies to ac - celerate nature–based solutions, divert organic waste from landfills, build healthy soils, and advance equity.

CALIFORNIA REGULATORY NOTICE REGISTER 2023, VOLUME NUMBER 33-Z 1078 Policy Statement Overview [Gov. Code § 11346.5(a)(3)(C)] The proposed regulation is designed to establish a new foundation for long–term improvements in wa - ter conservation and drought planning to adapt to cli - mate change and the longer and more intense droughts that are likely to result in California. The effect of the proposed regulation is the establishment of long–term standards for the efficient use of water and perfor - mance measures for commercial, industrial, and in - stitutional water use.

Additionally, it will establish a method to estimate the aggregate amount of water that would have been delivered the previous year by an ur- ban retail water supplier if all that water had been used efficiently. This estimated aggregate water use is the urban retail water supplier’s urban water use objec - tive. The objective is based on the water use efficiency standards and local service area characteristics for that year.

By comparing the amount of water used in the previous year with the urban water use objective, local urban water suppliers will be in a better posi - tion to help eliminate unnecessary use of water; that is, water used in excess of that needed to accomplish the intended beneficial use. Specific Benefits Anticipated from the Proposed Regulatory Action [Gov.

Code § 11346.5(a)(3)(C)] Protecting Human Health and Water Resources ● In addition to saving water, the proposed regula - tion may also bring about changes to urban land - scapes that protect water quality by reducing dry–weather and wet–weather runoff. ● The proposed regulation would incentivize changes to urban landscapes, including, in some cases, the transition to climate–ready landscapes, which, for the purposes of the proposed regula - tion are landscapes that save water, reduce waste, nurture soil, sequester carbon, conserve energy and reduce urban heat, protect air and water qual- ity, and create habitat for native plants and pol - linators.

Because climate–ready landscapes are more efficiently irrigated and make better use of precipitation, the proposed regulation could re - duce wet–weather runoff, preventing water pollu- tion and protecting water resources. ● By reducing urban water demand, the proposed regulation could help to preserve in–stream flows and water availability. Supporting Practices that Keep Trees Healthy ● The proposed regulation incentivizes efforts to maintain and increase the urban tree cano - py in California.

It includes a provision for the planting of new, climate–ready trees and an al - ternative compliance pathway for suppliers that demonstrate their support of practices that keep trees healthy. By encouraging suppliers to invest in water conservation and tree care, the proposed regulation could not only save water but also sup- port water–efficient irrigation practices that keep trees healthy. Mitigating and Adapting to Climate Change ● Climate change is driving aridification and changing precipitation patterns.

Aridification — hotter and drier conditions over longer periods — could diminish our existing water supply by up to 10 by 2040 (California Natural Resources Agency, 2022). Although a naturally occurring feature of California’s climate, drought condi - tions have become more frequent and more in - tense. A combination of hotter temperatures and low precipitation years — especially when snow- pack and snowmelt runoff are low — creates dri- er conditions. California has been getting drier since 1895.

In California and across the south - western United States, 2000 to 2021 were the driest 22–year period over the past 1,000 years, part of what scientists call an emerging “mega - drought” era (OEHHA, 2022). At the same time, changing precipitation patterns — more rain in - stead of snow and an increase in the duration, frequency, and intensity of “atmospheric river” storms — may lead to greater flooding risks and reservoirs having to release more water early in the spring to fulfill flood control functions, mean- ing less of the precipitation we do get can be cap- tured and stored.

Toward the end of the century, warming temperatures in California could result in a 30 percent loss of snowpack and a 25 per - cent increase in rain, leading to a higher volume of water rushing from headwaters and washing out across the state (Huang et al., 2020). In oth - er words, we will likely be grappling with floods and drought simultaneously, causing impacts to water storage and availability. ● The proposed regulation will help us adapt to aridification and changing precipitation patterns.

Finding and fixing leaks along with replacing older fixtures and appliances with efficient mod - els will save water indoors and out. Saving water indoors, especially, saves energy, which can re - duce the emission of greenhouse gases and oth - er co–emitted air pollutants, improving air qual - ity.

If, as a result of work undertaken by suppli - ers to meet their objectives, households were to replace inefficient clothes washers with more ef - ficient models, embedded statewide energy sav - ings would reach approximately 1,860 GWh of electricity and 36.5 million MMBtu of natural gas by 2040; this equates to $49 million in direct

CALIFORNIA REGULATORY NOTICE REGISTER 2023, VOLUME NUMBER 33-Z 1079 energy cost savings in 2025 and increased energy cost savings thereafter, reaching approximately $100 million in 2040. ● Significant water savings can also be realized by transitioning away from high water–using land - scapes such as turf to “climate–ready” land - scapes. Climate–ready landscapes require much less water because they are planted with low - er water–using vegetation that is irrigated much more efficiently.

Because they are composed of deeply rooted vegetation and their soils enriched with mulch and compost, climate–ready land - scapes are better at retaining rainwater. Accord - ing to one study, such landscapes retain 80 per - cent of the rain (Kent, 2017). By slowing, spread- ing, and sinking rainwater, climate–ready land - scapes help keep soils hydrated, which reduces irrigation needs. Climate–ready landscapes also lessen the impact of extreme wet weather events, helping to reduce flooding in urbanized areas.

Accelerating Nature–based Solutions, Diverting Organic Waste from Landfills, and Building Healthy Soils ● Implementation of the proposed regulation is like- ly to result in suppliers making investments and programmatic changes that encourage individu - als, businesses, and local governments to change how they use water. Such changes have the poten- tial to support statewide policies to accelerate na- ture–based solutions, divert organic waste from landfills, and build healthy soils.

Advancing equity ● The proposed regulation aims to support Gover - nor Newsom’s California’s Water Supply Strate- gy’s call on state agencies to respond to the hy - drological challenges posed by climate change in a way that advances equity and supports disad - vantaged communities (Water Supply Strategy, 2022). The proposed regulation incentivizes sup- pliers to make investments that not only save wa- ter but also advance equity.

Specifically, the pro- posed regulation may, in the long–run, mitigate rate increases; it may also encourage suppliers to assess rate structures and invest in programs and partnerships that reduce urban heat. EVALUATION OF INCONSISTENCY OR INCOMPATIBILITY WITH EXISTING STATE REGULATIONS [Gov. Code, § 11346.5(a)(3)(D)] The State Water Board reviewed its existing general regulations and regulations specific to water use ef - ficiency and conservation to evaluate whether the pro- posed regulation is inconsistent or incompatible with existing state regulations.

The State Water Board de - termined that no other state regulation addressed the same subject matter and that this proposal, if adopted, would not be inconsistent or incompatible with exist - ing state regulations. MANDATED BY FEDERAL LAW OR REGULATIONS [Gov. Code, § 11346.2(c)] Adoption of this regulation is not mandated by fed - eral law or regulations. OTHER STATUTORY REQUIREMENTS [Gov. Code, § 11346.5(a)(4)] Safe, Clean, Affordable Water [Wat. Code, § 106.3] Water Code

section 106.3 states that it is the policy of the state that every human has the right to safe, clean, affordable, and accessible water adequate for human consumption, cooking, and sanitary purposes. In preparing the proposed regulation, the State Water Board determined the proposed regulation is consis - tent with this statewide policy. While the proposed regulation may, in some cases, result in increased costs to those served by a water system, that potential cost is expected to render water neither unaffordable nor inaccessible. Urban Water Use Objectives and Water Use Reporting [Wat. Code, § 10609.2] Water Code

section 10609.2 states that the Board, in coordination with the department, shall adopt long– term standards for the efficient use of water, and that the standards shall be adopted for

(1) Outdoor resi - dential water use;

(2) Outdoor irrigation of landscape areas with dedicated irrigation meters in connection with CII water use;

(3) A volume for water loss. Ad - ditionally, when adopting the standards, the Board shall consider the policies of

Chapter 9 of Division 6,

Part 2.55 of the Water Code and the proposed effi - ciency standards’ effects on local wastewater manage- ment, developed and natural parklands, and urban tree health. The Board also is required to set the long–term standards at a level designed so that the water use ob - jectives, together with other demands excluded from the long–term standards such as CII indoor water use and CII outdoor water use not connected to a dedi - cated landscape meter, would exceed the statewide conservation targets required pursuant to

Chapter 3 (commencing with

Section 10608.16). Finally,

section 10609.2 states that the Board, in coordination with the department, shall adopt by regulation variances recommended by the department pursuant to

Section 10609.14 and guidelines and methodologies pertaining

CALIFORNIA REGULATORY NOTICE REGISTER 2023, VOLUME NUMBER 33-Z 1080 to the calculation of an urban retail water supplier’s urban water use objective recommended by the de - partment pursuant to

Section 10609.16. [Wat. Code, § 10609.10] Water Code

section 10609.10 states that the Board, in coordination with the department, shall adopt per - formance measures for CII water use. Pre–Notice Meeting with Affected Parties [Gov. Code, §11346.45(a)] Government Code

section 11346.45, subdivision (

a) requires that, prior to publication of the notice of proposed rulemaking, the agency proposing the regu - lation must involve parties who would be subject to the proposed regulation in public discussions, when the proposed regulation involves complex proposals or a large number of proposals that cannot be easily reviewed during the comment period.

The State Wa - ter Board provided suppliers and other interested par - ties opportunities to be involved in public discussions about the proposed regulation in 12 workshops on the following topics: ● On December 3 and 4, 2021, State Water Board staff hosted two workshops describing the meth - ods being used to analyze how the proposed ef - ficiency standards could affect trees, parklands, and local wastewater management. ● On May 11, 2022, State Water Board staff hosted a workshop summarizing the results of the anal - ysis undertaken to understand how the residen - tial indoor and outdoor standards may affect the wastewater sector. ● On August 12, 2022, State Water Board staff hosted a workshop summarizing the results of the analysis undertaken to understand how the stan - dards may affect trees and parklands. ● On February 23 and 28, 2023 and March 6, 8, and 10, 2023, State Water Board staff hosted work - shops to provide an overview of the draft regu - latory framework and sought the input of inter - ested parties.

Parties provided feedback to help staff understand and evaluate how the framework could affect various organizations, communities, and California. Staff also heard about whether or how various organizations could support efforts to make conservation a way of life. ● On March 22, 2023, State Water Board staff host- ed a pre–rulemaking workshop during a public Board meeting.

During this workshop, staff pre - sented the proposed regulatory framework. ● On May 17 and 18, 2023, State Water Board staff hosted two workshops with small suppliers (those with less than 10,000 connections) to better un - derstand how the draft regulatory framework could specifically affect small water suppliers. LOCAL MANDATE [Gov. Code, § 11346.5(a)(5)] The proposed regulation would not impose a man - date on local agencies or school districts that requires state reimbursement.

The proposed regulation will not be a requirement unique to local government and will apply equally to public and private water systems. Local agencies currently incur costs in their opera - tion of urban water systems. The costs imposed by the proposed regulation are not the result of a “new pro - gram or higher level of service” within the meaning of

Article XIIIB,

section 6 of the California Constitution because the proposed regulation applies generally to all individuals and entities that operate urban water systems in California and does not impose unique re - quirements on local governments (County of Los An - geles vs. State of California et al, 43 Cal. App. 3d 46 (1987)). In addition, suppliers can pass on the cost of regulation implementation through increasing service fees. Therefore, no state reimbursement of these costs is required (Gov. Code, §17556, subdivision (d)). FISCAL IMPACT [Gov.

Code, § 11346.5(a)(6)] Cost to Local Agencies and School Districts Requiring Reimbursement None. Any costs incurred by local agencies or school districts as a result of the proposed regulation are not reimbursable by the State pursuant to

Article XIIIB,

section 6 of the California Constitution. Urban retail water suppliers are expected to fully make up for the costs incurred as a result of the proposed regulation by adjusting their rates to customers over time. Govern - ment Code §17556, subdivision (d), identifies the types of actions that are not reimbursable state mandates: “the local agency or school district has the authority to levy service charges, fees, or assessments sufficient to pay for the mandated program or increased level of service.

This subdivision applies regardless of whether the authority to levy charges, fees, or assessments was enacted or adopted prior to or after the date on which the statute or executive order was enacted or issued.” Other Non–discretionary Cost or Savings Imposed Upon Local Agencies Suppliers operated by local governments : Most suppliers are operated by local governments, usu - ally a city, county, or district, and these suppliers serve almost 81 percent of the total population in the state. Like privately–owned suppliers, some publicly– owned suppliers will likely incur costs to meet their water use objectives.

Like privately–owned suppliers, publicly–owned suppliers on the one hand will spend less to acquire water and less on stormwater–related corrective measures, but, on the other hand, will po -

CALIFORNIA REGULATORY NOTICE REGISTER 2023, VOLUME NUMBER 33-Z 1081 tentially lose revenue due to the water use reductions. Ultimately, the Board expects that suppliers will fully make up for their lost revenues by adjusting their rates to customers over time. Publicly–owned suppliers would incur aggregate costs of approximately $8.45 billion and accrue benefits of approximately $9.09 bil- lion from 2025 to 2040. Local wastewater management agencies : Water Code

section 10609.2 requires that the State Water Board evaluate how the proposed efficiency standards may affect local wastewater management. Wastewa - ter collection, treatment, and reuse agencies may ex - perience increased costs, as well as potential benefits, when the influent volumes lessen or become more concentrated. Local wastewater management agencies would incur costs of $2.5 billion; benefits for these agencies could not be quantified. Urban forestry and landscape management agen - cies: Water Code

section 10609.2 requires that the State Water Board evaluate how the proposed efficien- cy standards may affect urban tree health as well as natural and developed parklands. Potentially affected areas may develop or update urban forestry manage - ment plans to prioritize spending on new trees. To meet their objectives, 149 suppliers may have to facilitate savings in outdoor water use. The urban forests within the service areas of these suppliers could be at risk if the required savings are not thoughtfully achieved.

If, however, the required water savings are achieved by, for example, increasing the efficiency of irrigation systems and/or by converting turf into climate–ready landscapes, the risk would be minimized. In such ar - eas, likely mitigation actions would include improved public education programs for irrigation management, development of urban forestry management plans and updated tree inventories, and new investments in ir - rigation technologies adapted to tree watering needs.

Local wastewater management agencies would incur costs of approximately $100 million; benefits for these agencies could not be quantified. Local institutional water users : Suppliers, both privately– and publicly–owned, and wastewater man - agement agencies may choose to pass on some or all of their increased costs and benefits to their end–custom- ers. Some of their end–customers are local govern - ments, i.e., local institutional water users. The average water cost for an affected CII property might decrease by approximately $168 per month in the 2025–2040 period (compared to the assumed future baseline).

The average wastewater cost might increase by approxi - mately $6 per month in the same period (compared to the assumed future baseline). Combined, water and wastewater costs would decline on average by $1,944 a year (compared to the assumed future baseline). Lo- cal institutional water users will not incur the cost of purchasing from their suppliers the water that they save. More specifically, local institutional water users, as well as other CII customers, will not use as much water as they would in the absence of the proposed regulation.

These water savings are a direct result of the CII performance measures that CII customers, in - cluding local institutional water users, implement. All else equal, water savings mean lower water bills (com- pared to the assumed future baseline). Local sales tax: Suppliers and households will spend more on residential water use efficiency programs and CII performance measures. Wastewater management agencies and urban forestry and landscape manage - ment agencies will also incur expenses because of the proposed regulation.

Much of that spending includes purchases of several types of goods, including, for example, landscape material, high–efficiency toilets and washers, valves, and water leak monitoring equip- ment. Sales tax will generally apply to such purchases. The proposed regulation therefore is expected to have an impact on sales tax revenues. Local sales tax rev - enues will be greater in the first years of the proposed regulation as this is when much of the water use ef - ficiency measures are assumed to be implemented.

Aggregate local sales tax revenues are estimated to increase (compared to the assumed future baseline) by almost $21 million in 2025, and between $500,000 and $3.6 million per year in the following years. Local inspection and permit fees : As Dedicated Ir - rigation Meters (DIMs), DIM tie–ins, and backflow devices are installed, suppliers will pay fees to local governments for the appropriate permits and backflow inspections. Local governments thus will experience an increase in revenues from such fees.

The aggregate increase in revenue from inspection and permit fees across all local governments will amount to approxi - mately $2.9 million per year between 2025 and 2030. The additional local staff for these inspections and permitting processes would cost approximately $1.8 million per year, including overhead, between 2025 and 2030 to local governments. Local property taxes : Together, wastewater man - agement agencies would incur costs of $385 million per year between 2025 and 2030, and $78 million per year afterward. The Board assumed that such costs would be passed on to customers.

Wastewater man - agement agencies may pass service charges to custom- ers in different ways, including, for example, through wastewater service bills and property taxes. Wastewa- ter charges are not a property tax and are not related to the assessed value of a property. However, these charges are sometimes included in property tax state - ments to save on administrative costs. If the estimated wastewater costs were passed on entirely via property tax statements, aggregate revenues across all coun - ties in California would increase (compared to the as -

CALIFORNIA REGULATORY NOTICE REGISTER 2023, VOLUME NUMBER 33-Z 1082 sumed future baseline) by as much as $385 million in 2025, and $78 million per year in the following years. Costs or Savings Imposed Upon State Agencies State Water Resources Control Board : None. The State Water Board does not anticipate an increase in resource needs because of the proposed regulation. State institutional water users : Suppliers are ex - pected to pass on costs and benefits of the proposed regulation to customers, some of which are state insti- tutional water users.

The cost pass–through calcula - tion for state institutional water users is the same as the one performed for local institutional water users, and, therefore, relies on the same assumptions and has the same limitations. The average water cost for an af- fected CII property might decrease by approximately $168 per month in the 2025–2040 period (compared to the assumed future baseline). The average wastewater cost might increase by approximately $6 per month in the same period (compared to the assumed future baseline).

Combined, water and wastewater costs would decline on average by $1,944 per year (com - pared to the assumed future baseline). Collectively, state institutional water users would not incur the cost of purchasing from their suppliers the water that they would save as a result of the proposed regulation. That is, state institutional water users, as well as other CII customers, will not use as much water as they would in the absence of the proposed regulation. These water savings are a direct result of the CII performance mea- sures that CII customers, including state institutional water users, implement.

All else equal, water savings mean lower water bills (compared to the assumed fu - ture baseline). State sales tax : As explained for local sales tax, much of the spending by suppliers, households, waste- water management agencies, and urban forestry and landscape management agencies includes purchases of several types of goods; sales tax will generally ap - ply to such purchases. The proposed regulation there - fore is expected to have an impact on the state’s sales tax revenue.

State sales tax revenues will be greater in the first years of the proposed regulation as this is when much of the water use efficiency measures are expected to be implemented. State sales tax revenues are estimated to increase (compared to the assumed future baseline) by almost $162 million in 2025, and between $4 million and $28 million per year in the following years. Costs or Savings in Federal Funding to the State None. The State Water Board has determined that the proposed regulation will not create additional costs or savings in federal funding to the state. HOUSING COSTS [Gov.

Code, § 11346.5(a)(12)] The State Water Board does not expect that the reg- ulation will have an impact on housing costs. SIGNIFICANT STATEWIDE ADVERSE ECONOMIC IMPACT DIRECTLY AFFECTING BUSINESS, INCLUDING ABILITY TO COMPETE [Gov. Code, § 11346.3(a), § 11346.5(a)(7), § 11346.5(a)(8)] Types of Businesses Affected Urban retail water suppliers can be either publicly– owned (e.g., municipal agencies, special–purpose and irrigation districts, municipal water districts, and coun- ties) or privately–owned (e.g., investor–owned utilities and nonprofit mutual water companies).

The proposed regulation would apply to 405 urban retail water sup - pliers in the state, 337 of which are publicly–owned. For the purpose of the economic impact assessment, the Board assumed that “businesses” refer to the re - maining 68 regulated privately–owned suppliers. Sup- pliers are generally local monopolies; households and CII customers usually do not have a choice between their water service supplier and another one. There - fore, suppliers are typically not subject to competition in the short term (see Creation of New Businesses or Elimination of Existing Businesses within California

section and Competitive Advantages or Disadvantag - es for California Businesses

section below). Projected Compliance Requirements Water Code

section 10609 et seq. required the De - partment of Water Resources to provide recommenda- tions on and the State Water Board to adopt standards for the efficient use of water, variances for unique uses that can have a material effect on water use, perfor - mance measures for commercial, industrial, and insti - tutional water use, and guidelines and methodologies that identify how each urban retail water supplier will calculate an urban water use objective.

The proposed regulation would require suppliers to comply with ur - ban water use objectives, implement the adopted CII performance measures, and submit annual progress reports. Urban water use objective : A supplier’s urban wa - ter use objective is a retrospective estimate of aggre - gate, efficient water use for the previous year, based on adopted water use efficiency standards and local service area characteristics for that year.

A supplier’s water use objective equals the sum of standard–based budgets for residential indoor use, residential outdoor use, CII landscapes with DIMs, which are submeters that supply water for only outdoor irrigation, and real water losses. When applicable, the urban water use

CALIFORNIA REGULATORY NOTICE REGISTER 2023, VOLUME NUMBER 33-Z 1083 objectives will also include variances (for example, for water use associated with livestock), provisions (for example, for existing pools, spas and similar wa - ter features or for the planting of new, climate–ready trees) and a bonus incentive for potable recycled water use. Performance measures: CII performance measures are actions to be taken by urban retail water suppliers that would result in increased water use efficiency by CII water users. They will not affect industrial process water.

Under the proposed regulation, there are three CII performance measures: (1) suppliers will be re - quired to install DIMs on or employ in–lieu technolo - gies for the landscapes of CII customers that

a) do not have a DIM and

b) the supplier estimates to have used more than 500,000 gallons of water; (2) suppliers will be required to classify their CII customers according to the broad classification categories used by the U.S. Environmental Protection Agency’s ENERGYSTAR Portfolio Manager tool; (3) suppliers will be required to offer best management practices (BMPs) to CII cus- tomers that meet specific criteria. Ability to Compete [Gov.

Code, §11346.5(a)(7)(C)] The State Water Board has made an initial determi - nation that the adoption of this regulation may have a significant, statewide adverse economic impact di - rectly affecting business. The State Water Board has considered proposed alternatives that would lessen any adverse economic impact on business and invites you to submit proposals. Submissions may include the following considerations: (

i) The establishment of differing compliance or re - porting requirements or timetables that take into account the resources available to businesses. (ii) Consolidation or simplification of compliance and reporting requirements for businesses. (iii) The use of performance standards rather than prescriptive standards. (iv) Exemption or partial exemption from the regula - tory requirements for businesses. The State Water Board has made an initial deter - mination that the adoption of this regulation will not directly affect the ability of California businesses to compete with businesses in other states.

RESULTS OF THE STANDARDIZED REGULATORY IMPACT ANALYSIS (SRIA) [Gov. Code, § 11346.5(a)(10), § 11346.3(c)] Statement of Results The State Water Board determined that the eco - nomic impact of the proposed regulation would like - ly exceed $50 million in a 12–month period so the regulation should be considered a Major Regulation as defined by California Code of Regulations, title 1,

section 2000, subdivision (g). The State Water Board prepared a SRIA as required by Government Code

section 11346.3, subdivision (c). The proposed regulation would save approximate - ly 235,000 acre–feet of water in 2025 (compared to the assumed 2025 baseline water use) and increased amounts in subsequent years, reaching almost 440,000 acre–feet of water saved in 2040 (compared to the as - sumed 2040 baseline water use). The total cumula - tive amount of water savings in the 2025–2040 period would be approximately 6.3 million acre–feet.

Most of the estimated water savings (approximately 80 per- cent) would come from the assumed residential water use efficiency measures, and the remainder (approxi - mately 20 percent) from CII performance measures. In the 2025–2040 period, quantified benefits of the proposed regulation are estimated to exceed the quan- tified costs. Assuming a discount rate of 3 percent, the State Water Board estimates present discounted values of $16.0 billion for the quantified benefits and $13.5 billion for the quantified costs.

Most of the estimated benefits originate from re - duced water purchases or reduced water production (compared to the assumed future baseline) by the af - fected suppliers. The estimated benefits also originate from reduced water use (compared to the assumed fu- ture baseline) by residential customers (reduced water use by CII customers, although also a benefit, could not be quantified). Most of the estimated costs originate from the im - plementation of residential water use efficiency mea - sures, approximately $5.8 billion from 2