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SB-1195 Professions and vocations: board actions.(2015-2016)

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Amended  IN  Senate  June 01, 2016
Amended  IN  Senate  April 06, 2016

CALIFORNIA LEGISLATURE— 2015–2016 REGULAR SESSION

Senate Bill
No. 1195

Introduced by Senator Hill

February 18, 2016

An act to amend Sections 109, 116, 153, 307, 313.1, 2708, 4800, 4804.5, 4825.1, 4830, and 4846.5 4846.5, 4904, and 4905 of, and to add Sections 4826.3, 4826.5, 4826.7, 109.5, 4826.5, 4848.1, and 4853.7 to, the Business and Professions Code, and to amend Sections 825, 11346.5, 11349, and 11349.1 825 and 11346.5 of the Government Code, relating to professional regulation, and making an appropriation therefor. regulations.


LEGISLATIVE COUNSEL'S DIGEST


SB 1195, as amended, Hill. Professions and vocations: board actions: competitive impact. actions.
(1) Existing law provides for the licensure and regulation of various professions and vocations by boards within the Department of Consumer Affairs, and authorizes those boards to adopt regulations to enforce the laws pertaining to the profession and vocation for which they have jurisdiction. Existing law makes decisions of any board within the department pertaining to setting standards, conducting examinations, passing candidates, and revoking licenses final, except as specified, and provides that those decisions are not subject to review by the Director of Consumer Affairs. Existing law authorizes the director to audit and review certain inquiries and complaints regarding licensees, including the dismissal of a disciplinary case. Existing law requires the director to annually report to the chairpersons of certain committees of the Legislature information regarding findings from any audit, review, or monitoring and evaluation. Existing law authorizes the director to contract for services of experts and consultants where necessary. Existing law requires regulations, except those pertaining to examinations and qualifications for licensure and fee changes proposed or promulgated by a board within the department, to comply with certain requirements before the regulation or fee change can take effect, including that the director is required to be notified of the rule or regulation and given 30 days to disapprove the regulation. Existing law prohibits a rule or regulation that is disapproved by the director from having any force or effect, unless the director’s disapproval is overridden by a unanimous vote of the members of the board, as specified.
This bill would instead authorize the director, upon his or her own initiative, and require the director, upon the request of a consumer or licensee, the board making the decision or the Legislature, to review a any nonministerial market-sensitive decision or other action, except as specified, of a board within the department to determine whether it unreasonably restrains trade furthers state law and to approve, disapprove, request further information, or modify the board decision or action, as specified. The bill would require the director to issue and post on the department’s Internet Web site his or her final written decision and the reasons for the decision within 90 days from receipt of the request of a consumer or licensee. request for review or the director’s decision to review the board decision. The bill would prohibit the executive officer of any board, committee, or commission within the department from being an active licensee of any profession that board, committee, or commission regulates. The bill would, commencing on March 1, 2017, require the director to annually report to the chairs of specified committees of the Legislature information regarding the director’s disapprovals, modifications, or findings from any audit, review, or monitoring and evaluation. The bill would authorize the director to seek, designate, employ, or contract for the services of independent antitrust experts for purposes of reviewing board actions for unreasonable restraints on trade. The bill would also require the director to review and approve any regulation promulgated by a board within the department, as specified. The bill would authorize the director to modify any regulation as a condition of approval, and to disapprove a regulation because it would have an impermissible anticompetitive effect. The bill would authorize the director, for a specified period of time, to approve, disapprove, or require modification of a proposed rule or regulation on the ground that it does not further state law. The bill would prohibit any rule or regulation from having any force or effect if the director does not approve the regulation because it has an impermissible anticompetitive effect. rule or regulation and prohibits any rule or regulation that is not approved by the director from being submitted to the Office of Administrative Law.
(2) Existing law, until January 1, 2018, provides for the licensure and regulation of registered nurses by the Board of Registered Nursing, which is within the Department of Consumer Affairs, and requires the board to appoint an executive officer who is a nurse currently licensed by the board.
This bill would instead prohibit the executive officer from being a licensee of the board.
(3) The Veterinary Medicine Practice Act provides for the licensure and registration of veterinarians and registered veterinary technicians and the regulation of the practice of veterinary medicine by the Veterinary Medical Board, which is within the Department of Consumer Affairs, and authorizes the board to appoint an executive officer, as specified. Existing law repeals the provisions establishing the board and authorizing the board to appoint an executive officer as of January 1, 2017. That act exempts certain persons from the requirements of the act, including a veterinarian employed by the University of California or the Western University of Health Sciences while engaged in the performance of specified duties. That act requires all premises where veterinary medicine, dentistry, and surgery is being practiced to register with the board. That act requires all fees collected on behalf of the board to be deposited into the Veterinary Medical Board Contingent Fund, which continuously appropriates fees deposited into the fund. That act makes a violation of any provision of the act punishable as a misdemeanor.
This bill would extend the operation of the board and the authorization of the board to appoint an executive officer to January 1, 2021. The bill would authorize a veterinarian and or registered veterinary technician who is under the direct supervision of a licensed veterinarian with a current and active license to compound a drug for anesthesia, the prevention, cure, or relief of a wound, fracture, bodily injury, or disease of an animal in a premises currently and actively registered with the board, as specified. The bill would authorize the California State Board of Pharmacy and the board to ensure compliance with these requirements. animal use pursuant to federal law and regulations promulgated by the board and would require those regulations to, at a minimum, address the storage of drugs, the level and type of supervision required for compounding drugs by a registered veterinary technician, and the equipment necessary for safe compounding of drugs. The bill would instead require veterinarians engaged in the practice of veterinary medicine employed by the University of California or by the Western University of Health Sciences while and engaged in the performance of specified duties to be licensed as a veterinarian in the state or hold be issued a university license issued by the board. license, as specified. The bill would require an applicant authorize an individual to apply for and be issued a university license to meet if he or she meets certain requirements, including that the applicant passes a specified exam. paying an application and license fee. The bill would require a university license, among other things, to automatically cease to be valid upon termination or cessation of employment by the University of California or the Western University of Health Sciences. The bill would also prohibit a premise registration that is not renewed within 5 years after its expiration from being renewed, restored, reissued, or reinstated; however, the bill would authorize a new premise registration to be issued to an applicant if no fact, circumstance, or condition exists that would justify the revocation or suspension of the registration if the registration was issued and if specified fees are paid. By requiring additional persons to be licensed and pay certain fees that would go into a continuously appropriated fund, this bill would make an appropriation. This bill would provide that the Veterinary Medical Board Contingent Fund is available for expenditure only upon an appropriation by the Legislature. By requiring additional persons to be licensed under the act that were previously exempt, this bill would expand the definition of an existing crime and would, therefore, result in a state-mandated local program.
(4) Existing law, The Government Claims Act, except as provided, requires a public entity to pay any judgment or any compromise or settlement of a claim or action against an employee or former employee of the public entity if the employee or former employee requests the public entity to defend him or her against any claim or action against him or her for an injury arising out of an act or omission occurring within the scope of his or her employment as an employee of the public entity, the request is made in writing not less than 10 days before the day of trial, and the employee or former employee reasonably cooperates in good faith in the defense of the claim or action. That act prohibits the payment of punitive or exemplary damages by a public entity, except as specified.
This bill would require a public entity to pay a judgment or settlement for treble damage antitrust awards against a member of a regulatory board for an act or omission occurring within the scope of his or her employment as a member of a regulatory board. The bill would specify that treble damages awarded pursuant to a specified federal law for violation of another federal law are not punitive or exemplary damages within the Government Claims Act.
(5) The Administrative Procedure Act governs the procedure for the adoption, amendment, or repeal of regulations by state agencies and for the review of those regulatory actions by the Office of Administrative Law. That act requires the review by the office to follow certain standards, including, among others, necessity, as defined. That act requires an agency proposing to adopt, amend, or repeal a regulation to prepare a notice to the public that includes specified information, including reference to the authority under which the regulation is proposed.
This bill would add competitive impact, as defined, as an additional standard for the office to follow when reviewing regulatory actions of a state board on which a controlling number of decisionmakers are active market participants in the market that the board regulates, and requires the office to, among other things, consider whether the anticompetitive effects of the proposed regulation are clearly outweighed by the public policy merits. The bill would authorize the office to designate, employ, or contract for the services of independent antitrust or applicable economic experts when reviewing proposed regulations for competitive impact. The bill would require state boards on which a controlling number of decisionmakers are active market participants in the market that the board regulates, when preparing the public notice, to additionally include a statement that the agency has evaluated the impact of the regulation on competition and that the effect of the regulation is within a clearly articulated and affirmatively expressed state law or policy. also require a board within the Department of Consumer Affairs to submit a statement to the office that the Director of Consumer Affairs has reviewed the proposed regulation and determined that the proposed regulation furthers state law.
(6) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Vote: MAJORITY   Appropriation: YESNO   Fiscal Committee: YES   Local Program: YES  

The people of the State of California do enact as follows:


SECTION 1.

 Section 109 of the Business and Professions Code is amended to read:

109.
 (a) The director decisions of any of the boards comprising the department with respect to passing candidates and revoking or otherwise imposing discipline on licenses shall not be subject to review by the director and are final within the limits provided by this code that are applicable to the particular board.
(b) The director may initiate an investigation of any allegations of misconduct in the preparation, administration, or scoring of an examination which is administered by a board, or in the review of qualifications which are a part of the licensing process of any board. A request for investigation shall be made by the director to the Division of Investigation through the chief of the division or to any law enforcement agency in the jurisdiction where the alleged misconduct occurred.

(b) (1)

(1) The director may intervene in any matter of any board where an investigation by the Division of Investigation discloses probable cause to believe that the conduct or activity of a board, or its members or employees employees, constitutes a violation of criminal law.
(2) The term “intervene,” as used in paragraph (1) of this section may include, but is not limited to, an application for a restraining order or injunctive relief as specified in Section 123.5, or a referral or request for criminal prosecution. For purposes of this section, the director shall be deemed to have standing under Section 123.5 and shall seek representation of the Attorney General, or other appropriate counsel in the event of a conflict in pursuing that action.
(c) The director may, upon his or her own initiative, and shall, upon request by a consumer or licensee, the board making the decision or the Legislature, review any nonministerial market-sensitive board action or decision or other action to determine whether it unreasonably restrains trade. Such a review shall proceed as follows: by the board to determine whether it furthers state law. Market-sensitive actions or decisions are those that create barriers to market participation and restrict competition including, but not limited to, examination passage scores, advertising restrictions, price regulation, enlarging or restricting scope of practice qualifications for licensure, and a pattern or program of disciplinary actions affecting multiple individuals that creates barriers to market participation. If the board action or decision is determined to be a market-sensitive action or decision, the director shall review the board action or decision to determine whether that action or decision furthers a clearly articulated and affirmatively expressed state policy. Review under this subdivision shall serve to cease implementation of the market-sensitive action or decision until the review is finalized and the action or decision is found to further state law.

(1)The director shall assess whether the action or decision reflects a clearly articulated and affirmatively expressed state law. If the director determines that the action or decision does not reflect a clearly articulated and affirmatively expressed state law, the director shall disapprove the board action or decision and it shall not go into effect.

(2)If the action or decision is a reflection of clearly articulated and affirmatively expressed state law, the director shall assess whether the action or decision was the result of the board’s exercise of ministerial or discretionary judgment. If the director finds no exercise of discretionary judgment, but merely the direct application of statutory or constitutional provisions, the director shall close the investigation and review of the board action or decision.

(3)If the director concludes under paragraph (2) that the board exercised discretionary judgment, the director shall review the board action or decision as follows:

(A)The

(1) Any review by the director under this subdivision shall conduct include a full substantive review of the board action or decision using based upon all the relevant facts, data, market conditions, facts in the record provided by the board and any additional information provided by the director, which may include data, public comment, studies, or other documentary evidence pertaining to the market impacted by the board’s action or decision and determine whether the anticompetitive effects of the action or decision are clearly outweighed by the benefit to the public. The director may seek, designate, employ, or contract for the services of independent antitrust or economic experts pursuant to Section 307. These experts shall not be active participants in the market affected by the board action or decision. decision.

(B)If the board action or decision was not previously subject to a public comment period, the director shall release the subject matter of his or her investigation for a 30-day public comment period and shall consider all comments received.

(C)If the director determines that the action or decision furthers the public protection mission of the board and the impact on competition is justified, the director may approve the action or decision.

(D)If the director determines that the action furthers the public protection mission of the board and the impact on competition is justified, the director may approve the action or decision. If the director finds the action or decision does not further the public protection mission of the board or finds that the action or decision is not justified, the director shall either refuse to approve it or shall modify the action or decision to ensure that any restraints of trade are related to, and advance, clearly articulated state law or public policy.

(2) The director shall take one of the following actions:
(A) Approve the action or decision upon determination that it furthers state law.
(B) Disapprove the action or decision if it does not further state law. If the director disapproves the board action or decision, the director may recommend modifications to the board action or decision, which, if adopted, shall not become effective until final approval by the director pursuant to this subdivision.
(C) Modify the action or decision to ensure that it furthers state law.
(D) Request further information from the board if the record provided is insufficient to make a determination that the action or decision furthers state law. Upon submission of further information from the board and any information provided by the director, the director shall make a final determination to approve, disapprove, or modify the board’s action or decision.

(4)

(d) The director shall issue, and post on the department’s Internet Web site, his or her final written decision approving, modifying, or disapproving on the board action or decision with an explanation of the reasons that action or decision does or does not further state law and the rationale behind the director’s decision within 90 days from receipt of the request from a consumer or licensee. board’s or Legislature’s request for review or the director’s decision to review the board action or decision. Notwithstanding any other law, the decision of the director shall be final, except if the state or federal constitution requires an appeal of the director’s decision.

(d)

(e) The review set forth in paragraph (3) of subdivision (c) shall not apply when an individual seeks to the review of any disciplinary action or other action pertaining solely to that individual. any other sanction or citation imposed by a board upon a licensee.

(e)

(f) The director shall report to the Chairs of the Senate Business, Professions, and Economic Development Committee and the Assembly Business and Professions Committee annually, commencing March 1, 2017, regarding his or her disapprovals, modifications, or findings from any audit, review, or monitoring and evaluation conducted pursuant to this section. That report shall be submitted in compliance with Section 9795 of the Government Code.

(f)If the director has already reviewed a board action or decision pursuant to this section or Section 313.1, the director shall not review that action or decision again.

(g) This section shall not be construed to affect, impede, or delay any disciplinary actions of any board.

SEC. 2.

 Section 109.5 is added to the Business and Professions Code, to read:

109.5.
 The executive officer of any board, committee, or commission within the department shall not be an active licensee of any profession that board, committee, or commission regulates.

SEC. 2.SEC. 3.

 Section 116 of the Business and Professions Code is amended to read:

116.
 (a) The director may audit and review, upon his or her own initiative, or upon the request of a consumer or licensee, inquiries and complaints regarding licensees, dismissals of disciplinary cases, the opening, conduct, or closure of investigations, informal conferences, and discipline short of formal accusation by any board or bureau within the department.
(b) The director shall report to the Chairs of the Senate Business, Professions, and Economic Development Committee and the Assembly Business and Professions Committee annually, commencing March 1, 2017, regarding his or her findings from any audit, review, or monitoring and evaluation conducted pursuant to this section. This report shall be submitted in compliance with Section 9795 of the Government Code.

SEC. 3.SEC. 4.

 Section 153 of the Business and Professions Code is amended to read:

153.
 The director may investigate the work of the several boards in his or her department and may obtain a copy of all records and full and complete data in all official matters in possession of the boards, their members, officers, or employees.

SEC. 4.SEC. 5.

 Section 307 of the Business and Professions Code is amended to read:

307.
 The director may contract for the services of experts and consultants where necessary to carry out this chapter and may provide compensation and reimbursement of expenses for those experts and consultants in accordance with state law.

SEC. 5.SEC. 6.

 Section 313.1 of the Business and Professions Code is amended to read:

313.1.
 (a) Notwithstanding any other law to the contrary, no rule or regulation and no fee change proposed or promulgated by any of the boards, commissions, or committees within the department, shall take effect pending compliance with this section.
(b) The director shall be formally notified of and shall review, in accordance with the requirements of Article 5 (commencing with Section 11346) of Chapter 3.5 of Part 1 of Division 3 of Title 2 of the Government Code, the requirements in subdivision (c) of Section 109, and this section, all of the following:
(1) All notices of proposed action, any modifications and supplements thereto, and the text of proposed regulations.
(2) Any notices of sufficiently related changes to regulations previously noticed to the public, and the text of proposed regulations showing modifications to the text.
(3) Final rulemaking records.
(4) All relevant facts, facts in the rulemaking record, which may include data, public comments, market conditions, studies, or other documentary evidence pertaining to the market impacted by the proposed regulation. This information shall be included in the written decision of the director required under paragraph (4) of subdivision (c) of Section 109. proposed regulation to determine whether it furthers state law. If the regulation does not further state law, it shall not be approved.
(c) The submission of all notices and final rulemaking records to the director and the director’s approval, as authorized by this section, shall be a precondition to the filing of any rule or regulation with the Office of Administrative Law. The Office of Administrative Law shall have no jurisdiction to review a rule or regulation subject to this section until after the director’s review and approval. The filing of any document with the Office of Administrative Law shall be accompanied by a certification that the board, commission, or committee has complied with the requirements of this section.
(d) Following the receipt of any final rulemaking record subject to subdivision (a), the director shall have the authority for a period of 30 days to approve approve, disapprove, or require modification of a proposed rule or regulation or disapprove a proposed rule or regulation on the ground that it is injurious to the public health, safety, or welfare, welfare or has an impermissible anticompetitive effect. The director may modify a rule or regulation as a condition of approval. Any modifications to regulations by the director shall be subject to a 30-day public comment period before the director issues a final decision regarding the modified regulation. If the director does not approve the rule or regulation within the 30-day period, the rule or regulation shall not be submitted to the Office of Administrative Law and the rule or regulation shall have no effect. does not further state law. If the director does not approve the rule or regulation within the 30-day period, the rule or regulation shall not be submitted to the Office of Administrative Law and the rule or regulation shall have no effect.
(e) Final rulemaking records shall be filed with the director within the one-year notice period specified in Section 11346.4 of the Government Code. If necessary for compliance with this section, the one-year notice period may be extended, as specified by this subdivision.
(1) In the event that the one-year notice period lapses during the director’s 30-day review period, or within 60 days following the notice of the director’s disapproval, it may be extended for a maximum of 90 days.
(2) If the director approves the final rulemaking record, the board, commission, or committee shall have five days from the receipt of the record from the director within which to file it with the Office of Administrative Law.
(3) If the director disapproves a rule or regulation, it shall have no force or effect unless, within 60 days of the notice of disapproval, (A) the disapproval is overridden by a unanimous vote of the members of the board, commission, or committee, and (B) the board, commission, or committee files the final rulemaking record with the Office of Administrative Law in compliance with this section and the procedures required by Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code. This paragraph shall not apply to any decision disapproved by the director under subdivision (c) of Section 109. effect.
(f) This section shall not be construed to prohibit the director from affirmatively approving a proposed rule, regulation, or fee change at any time within the 30-day period after it has been submitted to him or her, in which event it shall become effective upon compliance with this section and the procedures required by Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code.

SEC. 6.SEC. 7.

 Section 2708 of the Business and Professions Code is amended to read:

2708.
 (a) The board shall appoint an executive officer who shall perform the duties delegated by the board and who shall be responsible to it for the accomplishment of those duties.
(b) The executive officer shall not be a licensee under this chapter and shall possess other qualifications as determined by the board.
(c) The executive officer shall not be a member of the board.
(d) This section shall remain in effect only until January 1, 2018, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2018, deletes or extends that date.

SEC. 7.SEC. 8.

 Section 4800 of the Business and Professions Code is amended to read:

4800.
 (a) There is in the Department of Consumer Affairs a Veterinary Medical Board in which the administration of this chapter is vested. The board consists of the following members:
(1) Four licensed veterinarians.
(2) One registered veterinary technician.
(3) Three public members.
(b) This section shall remain in effect only until January 1, 2021, and as of that date is repealed.
(c) Notwithstanding any other law, the repeal of this section renders the board subject to review by the appropriate policy committees of the Legislature. However, the review of the board shall be limited to those issues identified by the appropriate policy committees of the Legislature and shall not involve the preparation or submission of a sunset review document or evaluative questionnaire.

SEC. 8.SEC. 9.

 Section 4804.5 of the Business and Professions Code is amended to read:

4804.5.
 (a) The board may appoint a person exempt from civil service who shall be designated as an executive officer and who shall exercise the powers and perform the duties delegated by the board and vested in him or her by this chapter.
(b) This section shall remain in effect only until January 1, 2021, and as of that date is repealed.

SEC. 9.Section 4825.1 of the Business and Professions Code is amended to read:
4825.1.

These definitions shall govern the construction of this chapter as it applies to veterinary medicine.

(a)“Diagnosis” means the act or process of identifying or determining the health status of an animal through examination and the opinion derived from that examination.

(b)“Animal” means any member of the animal kingdom other than humans, and includes fowl, fish, and reptiles, wild or domestic, whether living or dead.

(c)“Food animal” means any animal that is raised for the production of an edible product intended for consumption by humans. The edible product includes, but is not limited to, milk, meat, and eggs. Food animal includes, but is not limited to, cattle (beef or dairy), swine, sheep, poultry, fish, and amphibian species.

(d)“Livestock” includes all animals, poultry, aquatic and amphibian species that are raised, kept, or used for profit. It does not include those species that are usually kept as pets such as dogs, cats, and pet birds, or companion animals, including equines.

(e)“Compounding,” for the purposes of veterinary medicine, shall have the same meaning given in Section 1735 of Title 16 of the California Code of Regulations, except that every reference therein to “pharmacy” and “pharmacist” shall be replaced with “veterinary premises” and “veterinarian,” and except that only a licensed veterinarian or a licensed registered veterinarian technician under direct supervision of a veterinarian may perform compounding and shall not delegate to or supervise any part of the performance of compounding by any other person.

SEC. 10.Section 4826.3 is added to the Business and Professions Code, to read:
4826.3.

(a)Notwithstanding Section 4051, a veterinarian or registered veterinarian technician under the direct supervision of a veterinarian with a current and active license may compound a drug for anesthesia, the prevention, cure, or relief of a wound, fracture, bodily injury, or disease of an animal in a premises currently and actively registered with the board and only under the following conditions:

(1)Where there is no FDA-approved animal or human drug that can be used as labeled or in an appropriate extralabel manner to properly treat the disease, symptom, or condition for which the drug is being prescribed.

(2)Where the compounded drug is not available from a compounding pharmacy, outsourcing facility, or other compounding supplier in a dosage form and concentration to appropriately treat the disease, symptom, or condition for which the drug is being prescribed.

(3)Where the need and prescription for the compounded medication has arisen within an established veterinarian-client-patient relationship as a means to treat a specific occurrence of a disease, symptom, or condition observed and diagnosed by the veterinarian in a specific animal that threatens the health of the animal or will cause suffering or death if left untreated.

(4)Where the quantity compounded does not exceed a quantity demonstrably needed to treat a patient with which the veterinarian has a current veterinarian-client-patient relationship.

(5)Except as specified in subdivision (c), where the compound is prepared only with commercially available FDA-approved animal or human drugs as active ingredients.

(b)A compounded veterinary drug may be prepared from an FDA-approved animal or human drug for extralabel use only when there is no approved animal or human drug that, when used as labeled or in an appropriate extralabel manner will, in the available dosage form and concentration, treat the disease, symptom, or condition. Compounding from an approved human drug for use in food-producing animals is not permitted if an approved animal drug can be used for compounding.

(c)A compounded veterinary drug may be prepared from bulk drug substances only when:

(1)The drug is compounded and dispensed by the veterinarian to treat an individually identified animal patient under his or her care.

(2)The drug is not intended for use in food-producing animals.

(3)If the drug contains a bulk drug substance that is a component of any marketed FDA-approved animal or human drug, there is a change between the compounded drug and the comparable marketed drug made for an individually identified animal patient that produces a clinical difference for that individually identified animal patient, as determined by the veterinarian prescribing the compounded drug for his or her patient.

(4)There are no FDA-approved animal or human drugs that can be used as labeled or in an appropriate extralabel manner to properly treat the disease, symptom, or condition for which the drug is being prescribed.

(5)All bulk drug substances used in compounding are manufactured by an establishment registered under Section 360 of Title 21 of the United States Code and are accompanied by a valid certificate of analysis.

(6)The drug is not sold or transferred by the veterinarian compounding the drug, except that the veterinarian shall be permitted to administer the drug to a patient under his or her care or dispense it to the owner or caretaker of an animal under his or her care.

(7)Within 15 days of becoming aware of any product defect or serious adverse event associated with any drug compounded by the veterinarian from bulk drug substances, the veterinarian shall report it to the federal Food and Drug Administration on Form FDA 1932a.

(8)In addition to any other requirements, the label of any veterinary drug compounded from bulk drug substances shall indicate the species of the intended animal patient, the name of the animal patient, and the name of the owner or caretaker of the patient.

(d)Each compounded veterinary drug preparation shall meet the labeling requirements of Section 4076 and Sections 1707.5 and 1735.4 of Title 16 of the California Code of Regulations, except that every reference therein to “pharmacy” and “pharmacist” shall be replaced by “veterinary premises” and “veterinarian,” and any reference to “patient” shall be understood to refer to the animal patient. In addition, each label on a compounded veterinary drug preparation shall include withdrawal and holding times, if needed, and the disease, symptom, or condition for which the drug is being prescribed. Any compounded veterinary drug preparation that is intended to be sterile, including for injection, administration into the eye, or inhalation, shall in addition meet the labeling requirements of Section 1751.2 of Title 16 of the California Code of Regulations, except that every reference therein to “pharmacy” and “pharmacist” shall be replaced by “veterinary premises” and “veterinarian,” and any reference to “patient” shall be understood to refer to the animal patient.

(e)Any veterinarian, registered veterinarian technician who is under the direct supervision of a veterinarian, and veterinary premises engaged in compounding shall meet the compounding requirements for pharmacies and pharmacists stated by the provisions of Article 4.5 (commencing with Section 1735) of Title 16 of the California Code of Regulations, except that every reference therein to “pharmacy” and “pharmacist” shall be replaced by “veterinary premises” and “veterinarian,” and any reference to “patient” shall be understood to refer to the animal patient:

(1)Section 1735.1 of Title 16 of the California Code of Regulations.

(2)Subdivisions (d),(e), (f), (g), (h), (i), (j), (k), and (l) of Section 1735.2 of Title 16 of the California Code of Regulations.

(3)Section 1735.3 of Title 16 of the California Code of Regulations, except that only a licensed veterinarian or registered veterinarian technician may perform compounding and shall not delegate to or supervise any part of the performance of compounding by any other person.

(4)Section 1735.4 of Title 16 of the California Code of Regulations.

(5)Section 1735.5 of Title 16 of the California Code of Regulations.

(6)Section 1735.6 of Title 16 of the California Code of Regulations.

(7)Section 1735.7 of Title 16 of the California Code of Regulations.

(8)Section 1735.8 of Title 16 of the California Code of Regulations.

(f)Any veterinarian, registered veterinarian technician under the direct supervision of a veterinarian, and veterinary premises engaged in sterile compounding shall meet the sterile compounding requirements for pharmacies and pharmacists under Article 7 (commencing with Section 1751) of Title 16 of the California Code of Regulations, except that every reference therein to “pharmacy” and “pharmacist” shall be replaced by “veterinary premises” and “veterinarian,” and any reference to “patient” shall be understood to refer to the animal patient.

(g)The California State Board of Pharmacy shall have authority with the board to ensure compliance with this section and shall have the right to inspect any veterinary premises engaged in compounding, along with or separate from the board, to ensure compliance with this section. The board is specifically charged with enforcing this section with regard to its licensees.

SEC. 11.Section 4826.5 is added to the Business and Professions Code, to read:
4826.5.

Failure by a licensed veterinarian, registered veterinarian technician, or veterinary premises to comply with the provisions of this article shall be deemed unprofessional conduct and constitute grounds for discipline.

SEC. 12.Section 4826.7 is added to the Business and Professions Code, to read:
4826.7.

The board may adopt regulations to implement the provisions of this article.

SEC. 10.

 Section 4826.5 is added to the Business and Professions Code, to read:

4826.5.
 Notwithstanding any other law, a licensed veterinarian or a registered veterinary technician under the supervision of a licensed veterinarian may compound drugs for animal use pursuant to Section 530 of Title 21 of the Code of Federal Regulations and in accordance with regulations promulgated by the board. The regulations promulgated by the board shall, at a minimum, address the storage of drugs, the level and type of supervision required for compounding drugs by a registered veterinary technician, and the equipment necessary for the safe compounding of drugs. Any violation of the regulations adopted by the board pursuant to this section shall constitute grounds for an enforcement or disciplinary action.

SEC. 13.SEC. 11.

 Section 4830 of the Business and Professions Code is amended to read:

4830.
 (a) This chapter does not apply to:
(1) Veterinarians while serving in any armed branch of the military service of the United States or the United States Department of Agriculture while actually engaged and employed in their official capacity.
(2) Regularly licensed veterinarians in actual consultation from other states.
(3) Regularly licensed veterinarians actually called from other states to attend cases in this state, but who do not open an office or appoint a place to do business within this state.
(4) Students in the School of Veterinary Medicine of the University of California or the College of Veterinary Medicine of the Western University of Health Sciences who participate in diagnosis and treatment as part of their educational experience, including those in off-campus educational programs under the direct supervision of a licensed veterinarian in good standing, as defined in paragraph (1) of subdivision (b) of Section 4848, appointed by the University of California, Davis, or the Western University of Health Sciences.
(5) A veterinarian who is employed by the Meat and Poultry Inspection Branch of the California Department of Food and Agriculture while actually engaged and employed in his or her official capacity. A person exempt under this paragraph shall not otherwise engage in the practice of veterinary medicine unless he or she is issued a license by the board.
(6) Unlicensed personnel employed by the Department of Food and Agriculture or the United States Department of Agriculture when in the course of their duties they are directed by a veterinarian supervisor to conduct an examination, obtain biological specimens, apply biological tests, or administer medications or biological products as part of government disease or condition monitoring, investigation, control, or eradication activities.
(b) (1) For purposes of paragraph (3) of subdivision (a), a regularly licensed veterinarian in good standing who is called from another state by a law enforcement agency or animal control agency, as defined in Section 31606 of the Food and Agricultural Code, to attend to cases that are a part of an investigation of an alleged violation of federal or state animal fighting or animal cruelty laws within a single geographic location shall be exempt from the licensing requirements of this chapter if the law enforcement agency or animal control agency determines that it is necessary to call the veterinarian in order for the agency or officer to conduct the investigation in a timely, efficient, and effective manner. In determining whether it is necessary to call a veterinarian from another state, consideration shall be given to the availability of veterinarians in this state to attend to these cases. An agency, department, or officer that calls a veterinarian pursuant to this subdivision shall notify the board of the investigation.
(2) Notwithstanding any other provision of this chapter, a regularly licensed veterinarian in good standing who is called from another state to attend to cases that are a part of an investigation described in paragraph (1) may provide veterinary medical care for animals that are affected by the investigation with a temporary shelter facility, and the temporary shelter facility shall be exempt from the registration requirement of Section 4853 if all of the following conditions are met:
(A) The temporary shelter facility is established only for the purpose of the investigation.
(B) The temporary shelter facility provides veterinary medical care, shelter, food, and water only to animals that are affected by the investigation.
(C) The temporary shelter facility complies with Section 4854.
(D) The temporary shelter facility exists for not more than 60 days, unless the law enforcement agency or animal control agency determines that a longer period of time is necessary to complete the investigation.
(E) Within 30 calendar days upon completion of the provision of veterinary health care services at a temporary shelter facility established pursuant to this section, the veterinarian called from another state by a law enforcement agency or animal control agency to attend to a case shall file a report with the board. The report shall contain the date, place, type, and general description of the care provided, along with a listing of the veterinary health care practitioners who participated in providing that care.
(c) For purposes of paragraph (3) of subdivision (a), the board may inspect temporary facilities established pursuant to this section.

SEC. 14.SEC. 12.

 Section 4846.5 of the Business and Professions Code is amended to read:

4846.5.
 (a) Except as provided in this section, the board shall issue renewal licenses only to those applicants that have completed a minimum of 36 hours of continuing education in the preceding two years.
(b) (1) Notwithstanding any other law, continuing education hours shall be earned by attending courses relevant to veterinary medicine and sponsored or cosponsored by any of the following:
(A) American Veterinary Medical Association (AVMA) accredited veterinary medical colleges.
(B) Accredited colleges or universities offering programs relevant to veterinary medicine.
(C) The American Veterinary Medical Association.
(D) American Veterinary Medical Association recognized specialty or affiliated allied groups.
(E) American Veterinary Medical Association’s affiliated state veterinary medical associations.
(F) Nonprofit annual conferences established in conjunction with state veterinary medical associations.
(G) Educational organizations affiliated with the American Veterinary Medical Association or its state affiliated veterinary medical associations.
(H) Local veterinary medical associations affiliated with the California Veterinary Medical Association.
(I) Federal, state, or local government agencies.
(J) Providers accredited by the Accreditation Council for Continuing Medical Education (ACCME) or approved by the American Medical Association (AMA), providers recognized by the American Dental Association Continuing Education Recognition Program (ADA CERP), and AMA or ADA affiliated state, local, and specialty organizations.
(2) Continuing education credits shall be granted to those veterinarians taking self-study courses, which may include, but are not limited to, reading journals, viewing video recordings, or listening to audio recordings. The taking of these courses shall be limited to no more than six hours biennially.
(3) The board may approve other continuing veterinary medical education providers not specified in paragraph (1).
(A) The board has the authority to recognize national continuing education approval bodies for the purpose of approving continuing education providers not specified in paragraph (1).
(B) Applicants seeking continuing education provider approval shall have the option of applying to the board or to a board-recognized national approval body.
(4) For good cause, the board may adopt an order specifying, on a prospective basis, that a provider of continuing veterinary medical education authorized pursuant to paragraph (1) or (3) is no longer an acceptable provider.
(5) Continuing education hours earned by attending courses sponsored or cosponsored by those entities listed in paragraph (1) between January 1, 2000, and January 1, 2001, shall be credited toward a veterinarian’s continuing education requirement under this section.
(c) Every person renewing his or her license issued pursuant to Section 4846.4, or any person applying for relicensure or for reinstatement of his or her license to active status, shall submit proof of compliance with this section to the board certifying that he or she is in compliance with this section. Any false statement submitted pursuant to this section shall be a violation subject to Section 4831.
(d) This section shall not apply to a veterinarian’s first license renewal. This section shall apply only to second and subsequent license renewals granted on or after January 1, 2002.
(e) The board shall have the right to audit the records of all applicants to verify the completion of the continuing education requirement. Applicants shall maintain records of completion of required continuing education coursework for a period of four years and shall make these records available to the board for auditing purposes upon request. If the board, during this audit, questions whether any course reported by the veterinarian satisfies the continuing education requirement, the veterinarian shall provide information to the board concerning the content of the course; the name of its sponsor and cosponsor, if any; and specify the specific curricula that was of benefit to the veterinarian.
(f) A veterinarian desiring an inactive license or to restore an inactive license under Section 701 shall submit an application on a form provided by the board. In order to restore an inactive license to active status, the veterinarian shall have completed a minimum of 36 hours of continuing education within the last two years preceding application. The inactive license status of a veterinarian shall not deprive the board of its authority to institute or continue a disciplinary action against a licensee.
(g) Knowing misrepresentation of compliance with this article by a veterinarian constitutes unprofessional conduct and grounds for disciplinary action or for the issuance of a citation and the imposition of a civil penalty pursuant to Section 4883.
(h) The board, in its discretion, may exempt from the continuing education requirement any veterinarian who for reasons of health, military service, or undue hardship cannot meet those requirements. Applications for waivers shall be submitted on a form provided by the board.
(i) The administration of this section may be funded through professional license and continuing education provider fees. The fees related to the administration of this section shall not exceed the costs of administering the corresponding provisions of this section.
(j) For those continuing education providers not listed in paragraph (1) of subdivision (b), the board or its recognized national approval agent shall establish criteria by which a provider of continuing education shall be approved. The board shall initially review and approve these criteria and may review the criteria as needed. The board or its recognized agent shall monitor, maintain, and manage related records and data. The board may impose an application fee, not to exceed two hundred dollars ($200) biennially, for continuing education providers not listed in paragraph (1) of subdivision (b).
(k) (1) Beginning January 1, 2018, a licensed veterinarian who renews his or her license shall complete a minimum of one credit hour of continuing education on the judicious use of medically important antimicrobial drugs every four years as part of his or her continuing education requirements.
(2) For purposes of this subdivision, “medically important antimicrobial drug” means an antimicrobial drug listed in Appendix A of the federal Food and Drug Administration’s Guidance for Industry #152, including critically important, highly important, and important antimicrobial drugs, as that appendix may be amended.

SEC. 15.SEC. 13.

 Section 4848.1 is added to the Business and Professions Code, to read:

4848.1.
 (a) A veterinarian engaged in the practice of veterinary medicine, as defined in Section 4826, employed by the University of California while and engaged in the performance of duties in connection with the School of Veterinary Medicine or employed by the Western University of Health Sciences while and engaged in the performance of duties in connection with the College of Veterinary Medicine shall be licensed in California or shall hold issued a university license issued by the board. pursuant to this section or hold a license to practice veterinary medicine in this state.
(b) An applicant is eligible to hold individual may apply for and be issued a university license if all of the following are satisfied:
(1) The applicant He or she is currently employed by the University of California or Western University of Health Sciences Sciences, as defined in subdivision (a).
(2) Passes He or she passes an examination concerning the statutes and regulations of the Veterinary Medicine Practice Act, administered by the board, pursuant to subparagraph (C) of paragraph (2) of subdivision (a) of Section 4848.
(3) Successfully He or she successfully completes the approved educational curriculum described in paragraph (5) of subdivision (b) of Section 4848 on regionally specific and important diseases and conditions.
(4) He or she completes and submits the application specified by the board and pays the application fee, pursuant to subdivision (g) of Section 4905, and the initial license fee, pursuant to subdivision (h) of Section 4905.
(c) A university license:
(1) Shall be numbered as described in Section 4847.
(2) Shall automatically cease to be valid upon termination or cessation of employment by the University of California or by the Western University of Health Sciences.
(3) Shall be subject to the license renewal provisions in Section 4846.4. 4846.4 and the payment of the renewal fee pursuant to subdivision (i) of Section 4905.
(4) Shall be subject to denial, revocation, or suspension pursuant to Sections 4875 and 4883. 480, 4875, and 4883.
(5) Authorizes the holder to practice veterinary medicine only at the educational institution described in subdivision (a) and any locations formally affiliated with those institutions.
(d) An individual who holds a university license is exempt from satisfying the license renewal requirements of Section 4846.5.

SEC. 16.SEC. 14.

 Section 4853.7 is added to the Business and Professions Code, to read:

4853.7.
 A premise registration that is not renewed within five years after its expiration may not be renewed and shall not be restored, reissued, or reinstated thereafter. However, an application for a new premise registration may be submitted and obtained if both of the following conditions are met:
(a) No fact, circumstance, or condition exists that, if the premise registration was issued, would justify its revocation or suspension.
(b) All of the fees that would be required for the initial premise registration are paid at the time of application.

SEC. 15.

 Section 4904 of the Business and Professions Code is amended to read:

4904.
 All fees collected on behalf of the board and all receipts of every kind and nature shall be reported each month for the month preceding to the State Controller and at the same time the entire amount shall be paid into the State Treasury and shall be credited to the Veterinary Medical Board Contingent Fund. This contingent fund shall be available, upon appropriation by the Legislature, for the use of the Veterinary Medical Board and out of it and not otherwise shall be paid all expenses of the board. Board.

SEC. 16.

 Section 4905 of the Business and Professions Code is amended to read:

4905.
 The following fees shall be collected by the board and shall be credited to the Veterinary Medical Board Contingent Fund:
(a) The fee for filing an application for examination shall be set by the board in an amount it determines is reasonably necessary to provide sufficient funds to carry out the purpose of this chapter, not to exceed three hundred fifty dollars ($350).
(b) The fee for the California state board examination shall be set by the board in an amount it determines is reasonably necessary to provide sufficient funds to carry out the purpose of this chapter, not to exceed three hundred fifty dollars ($350).
(c) The fee for the Veterinary Medicine Practice Act examination shall be set by the board in an amount it determines reasonably necessary to provide sufficient funds to carry out the purpose of this chapter, not to exceed one hundred dollars ($100).
(d) The initial license fee shall be set by the board not to exceed five hundred dollars ($500) except that, if the license is issued less than one year before the date on which it will expire, then the fee shall be set by the board at not to exceed two hundred fifty dollars ($250). The board may, by appropriate regulation, provide for the waiver or refund of the initial license fee where the license is issued less than 45 days before the date on which it will expire.
(e) The renewal fee shall be set by the board for each biennial renewal period in an amount it determines is reasonably necessary to provide sufficient funds to carry out the purpose of this chapter, not to exceed five hundred dollars ($500).
(f) The temporary license fee shall be set by the board in an amount it determines is reasonably necessary to provide sufficient funds to carry out the purpose of this chapter, not to exceed two hundred fifty dollars ($250).
(g) The fee for filing an application for a university license shall be one hundred twenty-five dollars ($125), which may be revised by the board in regulation but shall not exceed three hundred fifty dollars ($350).
(h) The initial license fee for a university license shall be two hundred ninety dollars ($290), which may be revised by the board in regulation but shall not exceed five hundred dollars ($500).
(i) The biennial renewal fee for a university license shall be two hundred ninety dollars ($290), which may be revised by the board in regulation but shall not exceed five hundred dollars ($500).

(g)

(j) The delinquency fee shall be set by the board, not to exceed fifty dollars ($50).

(h)

(k) The fee for issuance of a duplicate license is twenty-five dollars ($25).

(i)

(l) Any charge made for duplication or other services shall be set at the cost of rendering the service, except as specified in subdivision (h). (k).

(j)

(m) The fee for failure to report a change in the mailing address is twenty-five dollars ($25).

(k)

(n) The initial and annual renewal fees for registration of veterinary premises shall be set by the board in an amount not to exceed four hundred dollars ($400) annually.

(l)

(o) If the money transferred from the Veterinary Medical Board Contingent Fund to the General Fund pursuant to the Budget Act of 1991 is redeposited into the Veterinary Medical Board Contingent Fund, the fees assessed by the board shall be reduced correspondingly. However, the reduction shall not be so great as to cause the Veterinary Medical Board Contingent Fund to have a reserve of less than three months of annual authorized board expenditures. The fees set by the board shall not result in a Veterinary Medical Board Contingent Fund reserve of more than 10 months of annual authorized board expenditures.

SEC. 17.

 Section 825 of the Government Code is amended to read:

825.
 (a) Except as otherwise provided in this section, if an employee or former employee of a public entity requests the public entity to defend him or her against any claim or action against him or her for an injury arising out of an act or omission occurring within the scope of his or her employment as an employee of the public entity and the request is made in writing not less than 10 days before the day of trial, and the employee or former employee reasonably cooperates in good faith in the defense of the claim or action, the public entity shall pay any judgment based thereon or any compromise or settlement of the claim or action to which the public entity has agreed.
If the public entity conducts the defense of an employee or former employee against any claim or action with his or her reasonable good-faith cooperation, the public entity shall pay any judgment based thereon or any compromise or settlement of the claim or action to which the public entity has agreed. However, where the public entity conducted the defense pursuant to an agreement with the employee or former employee reserving the rights of the public entity not to pay the judgment, compromise, or settlement until it is established that the injury arose out of an act or omission occurring within the scope of his or her employment as an employee of the public entity, the public entity is required to pay the judgment, compromise, or settlement only if it is established that the injury arose out of an act or omission occurring in the scope of his or her employment as an employee of the public entity.
Nothing in this section authorizes a public entity to pay that part of a claim or judgment that is for punitive or exemplary damages.
(b) Notwithstanding subdivision (a) or any other provision of law, a public entity is authorized to pay that part of a judgment that is for punitive or exemplary damages if the governing body of that public entity, acting in its sole discretion except in cases involving an entity of the state government, finds all of the following:
(1) The judgment is based on an act or omission of an employee or former employee acting within the course and scope of his or her employment as an employee of the public entity.
(2) At the time of the act giving rise to the liability, the employee or former employee acted, or failed to act, in good faith, without actual malice and in the apparent best interests of the public entity.
(3) Payment of the claim or judgment would be in the best interests of the public entity.
As used in this subdivision with respect to an entity of state government, “a decision of the governing body” means the approval of the Legislature for payment of that part of a judgment that is for punitive damages or exemplary damages, upon recommendation of the appointing power of the employee or former employee, based upon the finding by the Legislature and the appointing authority of the existence of the three conditions for payment of a punitive or exemplary damages claim. The provisions of subdivision (a) of Section 965.6 shall apply to the payment of any claim pursuant to this subdivision.
The discovery of the assets of a public entity and the introduction of evidence of the assets of a public entity shall not be permitted in an action in which it is alleged that a public employee is liable for punitive or exemplary damages.
The possibility that a public entity may pay that part of a judgment that is for punitive damages shall not be disclosed in any trial in which it is alleged that a public employee is liable for punitive or exemplary damages, and that disclosure shall be grounds for a mistrial.
(c) Except as provided in subdivision (d), if the provisions of this section are in conflict with the provisions of a memorandum of understanding reached pursuant to Chapter 10 (commencing with Section 3500) of Division 4 of Title 1, the memorandum of understanding shall be controlling without further legislative action, except that if those provisions of a memorandum of understanding require the expenditure of funds, the provisions shall not become effective unless approved by the Legislature in the annual Budget Act.
(d) The subject of payment of punitive damages pursuant to this section or any other provision of law shall not be a subject of meet and confer under the provisions of Chapter 10 (commencing with Section 3500) of Division 4 of Title 1, or pursuant to any other law or authority.
(e) Nothing in this section shall affect the provisions of Section 818 prohibiting the award of punitive damages against a public entity. This section shall not be construed as a waiver of a public entity’s immunity from liability for punitive damages under Section 1981, 1983, or 1985 of Title 42 of the United States Code.
(f) (1) Except as provided in paragraph (2), a public entity shall not pay a judgment, compromise, or settlement arising from a claim or action against an elected official, if the claim or action is based on conduct by the elected official by way of tortiously intervening or attempting to intervene in, or by way of tortiously influencing or attempting to influence the outcome of, any judicial action or proceeding for the benefit of a particular party by contacting the trial judge or any commissioner, court-appointed arbitrator, court-appointed mediator, or court-appointed special referee assigned to the matter, or the court clerk, bailiff, or marshal after an action has been filed, unless he or she was counsel of record acting lawfully within the scope of his or her employment on behalf of that party. Notwithstanding Section 825.6, if a public entity conducted the defense of an elected official against such a claim or action and the elected official is found liable by the trier of fact, the court shall order the elected official to pay to the public entity the cost of that defense.
(2) If an elected official is held liable for monetary damages in the action, the plaintiff shall first seek recovery of the judgment against the assets of the elected official. If the elected official’s assets are insufficient to satisfy the total judgment, as determined by the court, the public entity may pay the deficiency if the public entity is authorized by law to pay that judgment.
(3) To the extent the public entity pays any portion of the judgment or is entitled to reimbursement of defense costs pursuant to paragraph (1), the public entity shall pursue all available creditor’s remedies against the elected official, including garnishment, until that party has fully reimbursed the public entity.
(4) This subdivision shall not apply to any criminal or civil enforcement action brought in the name of the people of the State of California by an elected district attorney, city attorney, or attorney general.
(g) Notwithstanding subdivision (a), a public entity shall pay for a judgment or settlement for treble damage antitrust awards against a member of a regulatory board for an act or omission occurring within the scope of his or her employment as a member of a regulatory board.
(h) Treble damages awarded pursuant to the federal Clayton Act (Sections 12 to 27 of Title 15 of, and Sections 52 to 53 of Title 29 of, the United States Code) for a violation of the federal Sherman Act (Sections 1 to 6, 6a, and 7 of Title 15 of the United States Code) are not punitive or exemplary damages under the Government Claims Act (Division 3.6 (commencing with Section 810) of Title 1 of the Government Code) for purposes of this section.

SEC. 18.

 Section 11346.5 of the Government Code is amended to read:

11346.5.
 (a) The notice of proposed adoption, amendment, or repeal of a regulation shall include the following:
(1) A statement of the time, place, and nature of proceedings for adoption, amendment, or repeal of the regulation.
(2) Reference to the authority under which the regulation is proposed and a reference to the particular code sections or other provisions of law that are being implemented, interpreted, or made specific.
(3) An informative digest drafted in plain English in a format similar to the Legislative Counsel’s digest on legislative bills. The informative digest shall include the following:
(A) A concise and clear summary of existing laws and regulations, if any, related directly to the proposed action and of the effect of the proposed action.
(B) If the proposed action differs substantially from an existing comparable federal regulation or statute, a brief description of the significant differences and the full citation of the federal regulations or statutes.
(C) A policy statement overview explaining the broad objectives of the regulation and the specific benefits anticipated by the proposed adoption, amendment, or repeal of a regulation, including, to the extent applicable, nonmonetary benefits such as the protection of public health and safety, worker safety, or the environment, the prevention of discrimination, the promotion of fairness or social equity, and the increase in openness and transparency in business and government, among other things.
(D) An evaluation of whether the proposed regulation is inconsistent or incompatible with existing state regulations.
(4) Any other matters as are prescribed by statute applicable to the specific state agency or to any specific regulation or class of regulations.
(5) A determination as to whether the regulation imposes a mandate on local agencies or school districts and, if so, whether the mandate requires state reimbursement pursuant to Part 7 (commencing with Section 17500) of Division 4.
(6) An estimate, prepared in accordance with instructions adopted by the Department of Finance, of the cost or savings to any state agency, the cost to any local agency or school district that is required to be reimbursed under Part 7 (commencing with Section 17500) of Division 4, other nondiscretionary cost or savings imposed on local agencies, and the cost or savings in federal funding to the state.
For purposes of this paragraph, “cost or savings” means additional costs or savings, both direct and indirect, that a public agency necessarily incurs in reasonable compliance with regulations.
(7) If a state agency, in proposing to adopt, amend, or repeal any administrative regulation, makes an initial determination that the action may have a significant, statewide adverse economic impact directly affecting business, including the ability of California businesses to compete with businesses in other states, it shall include the following information in the notice of proposed action:
(A) Identification of the types of businesses that would be affected.
(B) A description of the projected reporting, recordkeeping, and other compliance requirements that would result from the proposed action.
(C) The following statement: “The (name of agency) has made an initial determination that the (adoption/amendment/repeal) of this regulation may have a significant, statewide adverse economic impact directly affecting business, including the ability of California businesses to compete with businesses in other states. The (name of agency) (has/has not) 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 reporting 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 regulatory requirements for businesses.”
(8) If a state agency, in adopting, amending, or repealing any administrative regulation, makes an initial determination that the action will not have a significant, statewide adverse economic impact directly affecting business, including the ability of California businesses to compete with businesses in other states, it shall make a declaration to that effect in the notice of proposed action. In making this declaration, the agency shall provide in the record facts, evidence, documents, testimony, or other evidence upon which the agency relies to support its initial determination.
An agency’s initial determination and declaration that a proposed adoption, amendment, or repeal of a regulation may have or will not have a significant, adverse impact on businesses, including the ability of California businesses to compete with businesses in other states, shall not be grounds for the office to refuse to publish the notice of proposed action.
(9) A description of all cost impacts, known to the agency at the time the notice of proposed action is submitted to the office, that a representative private person or business would necessarily incur in reasonable compliance with the proposed action.
If no cost impacts are known to the agency, it shall state the following:
“The agency is not aware of any cost impacts that a representative private person or business would necessarily incur in reasonable compliance with the proposed action.”
(10) A statement of the results of the economic impact assessment required by subdivision (b) of Section 11346.3 or the standardized regulatory impact analysis if required by subdivision (c) of Section 11346.3, a summary of any comments submitted to the agency pursuant to subdivision (f) of Section 11346.3 and the agency’s response to those comments.
(11) The finding prescribed by subdivision (d) of Section 11346.3, if required.
(12) (A) A statement that the action would have a significant effect on housing costs, if a state agency, in adopting, amending, or repealing any administrative regulation, makes an initial determination that the action would have that effect.
(B) The agency officer designated in paragraph (15) shall make available to the public, upon request, the agency’s evaluation, if any, of the effect of the proposed regulatory action on housing costs.
(C) The statement described in subparagraph (A) shall also include the estimated costs of compliance and potential benefits of a building standard, if any, that were included in the initial statement of reasons.
(D) For purposes of model codes adopted pursuant to Section 18928 of the Health and Safety Code, the agency shall comply with the requirements of this paragraph only if an interested party has made a request to the agency to examine a specific section for purposes of estimating the costs of compliance and potential benefits for that section, as described in Section 11346.2.
(13) If the regulatory action is submitted by a state board on which a controlling number of decisionmakers are active market participants in the market the board regulates, a statement that the adopting agency has evaluated the impact of the proposed regulation on competition, and that the proposed regulation furthers a clearly articulated and affirmatively expressed state law to restrain competition. board within the Department of Consumer Affairs, a statement that the Director of Consumer Affairs has reviewed the proposed regulation and determined that the proposed regulation furthers state law.
(14) A statement that the adopting agency must determine that no reasonable alternative considered by the agency or that has otherwise been identified and brought to the attention of the agency would be more effective in carrying out the purpose for which the action is proposed, 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. For a major regulation, as defined by Section 11342.548, proposed on or after November 1, 2013, the statement shall be based, in part, upon the standardized regulatory impact analysis of the proposed regulation, as required by Section 11346.3, as well as upon the benefits of the proposed regulation identified pursuant to subparagraph (C) of paragraph (3).
(15) The name and telephone number of the agency representative and designated backup contact person to whom inquiries concerning the proposed administrative action may be directed.
(16) The date by which comments submitted in writing must be received to present statements, arguments, or contentions in writing relating to the proposed action in order for them to be considered by the state agency before it adopts, amends, or repeals a regulation.
(17) Reference to the fact that the agency proposing the action has prepared a statement of the reasons for the proposed action, has available all the information upon which its proposal is based, and has available the express terms of the proposed action, pursuant to subdivision (b).
(18) A statement that if a public hearing is not scheduled, any interested person or his or her duly authorized representative may request, no later than 15 days prior to the close of the written comment period, a public hearing pursuant to Section 11346.8.
(19) A statement indicating that the full text of a regulation changed pursuant to Section 11346.8 will be available for at least 15 days prior to the date on which the agency adopts, amends, or repeals the resulting regulation.
(20) A statement explaining how to obtain a copy of the final statement of reasons once it has been prepared pursuant to subdivision (a) of Section 11346.9.
(21) If the agency maintains an Internet Web site or other similar forum for the electronic publication or distribution of written material, a statement explaining how materials published or distributed through that forum can be accessed.
(22) If the proposed regulation is subject to Section 11346.6, a statement that the agency shall provide, upon request, a description of the proposed changes included in the proposed action, in the manner provided by Section 11346.6, to accommodate a person with a visual or other disability for which effective communication is required under state or federal law and that providing the description of proposed changes may require extending the period of public comment for the proposed action.
(b) The agency representative designated in paragraph (15) of subdivision (a) shall make available to the public upon request the express terms of the proposed action. The representative shall also make available to the public upon request the location of public records, including reports, documentation, and other materials, related to the proposed action. If the representative receives an inquiry regarding the proposed action that the representative cannot answer, the representative shall refer the inquiry to another person in the agency for a prompt response.
(c) This section shall not be construed in any manner that results in the invalidation of a regulation because of the alleged inadequacy of the notice content or the summary or cost estimates, or the alleged inadequacy or inaccuracy of the housing cost estimates, if there has been substantial compliance with those requirements.

SEC. 19.Section 11349 of the Government Code is amended to read:
11349.

The following definitions govern the interpretation of this chapter:

(a)“Necessity” means the record of the rulemaking proceeding demonstrates by substantial evidence the need for a regulation to effectuate the purpose of the statute, court decision, or other provision of law that the regulation implements, interprets, or makes specific, taking into account the totality of the record. For purposes of this standard, evidence includes, but is not limited to, facts, studies, and expert opinion.

(b)“Authority” means the provision of law which permits or obligates the agency to adopt, amend, or repeal a regulation.

(c)“Clarity” means written or displayed so that the meaning of regulations will be easily understood by those persons directly affected by them.

(d)“Consistency” means being in harmony with, and not in conflict with or contradictory to, existing statutes, court decisions, or other provisions of law.

(e)“Reference” means the statute, court decision, or other provision of law which the agency implements, interprets, or makes specific by adopting, amending, or repealing a regulation.

(f)“Nonduplication” means that a regulation does not serve the same purpose as a state or federal statute or another regulation. This standard requires that an agency proposing to amend or adopt a regulation must identify any state or federal statute or regulation which is overlapped or duplicated by the proposed regulation and justify any overlap or duplication. This standard is not intended to prohibit state agencies from printing relevant portions of enabling legislation in regulations when the duplication is necessary to satisfy the clarity standard in paragraph (3) of subdivision (a) of Section 11349.1. This standard is intended to prevent the indiscriminate incorporation of statutory language in a regulation.

(g)“Competitive impact” means that the record of the rulemaking proceeding or other documentation demonstrates that the regulation is authorized by a clearly articulated and affirmatively expressed state law, that the regulation furthers the public protection mission of the state agency, and that the impact on competition is justified in light of the applicable regulatory rationale for the regulation.

SEC. 20.Section 11349.1 of the Government Code is amended to read:
11349.1.

(a)The office shall review all regulations adopted, amended, or repealed pursuant to the procedure specified in Article 5 (commencing with Section 11346) and submitted to it for publication in the California Code of Regulations Supplement and for transmittal to the Secretary of State and make determinations using all of the following standards:

(1)Necessity.

(2)Authority.

(3)Clarity.

(4)Consistency.

(5)Reference.

(6)Nonduplication.

(7)For those regulations submitted by a state board on which a controlling number of decisionmakers are active market participants in the market the board regulates, the office shall review for competitive impact.

In reviewing regulations pursuant to this section, the office shall restrict its review to the regulation and the record of the rulemaking except as directed in subdivision (h). The office shall approve the regulation or order of repeal if it complies with the standards set forth in this section and with this chapter.

(b)In reviewing proposed regulations for the criteria in subdivision (a), the office may consider the clarity of the proposed regulation in the context of related regulations already in existence.

(c)The office shall adopt regulations governing the procedures it uses in reviewing regulations submitted to it. The regulations shall provide for an orderly review and shall specify the methods, standards, presumptions, and principles the office uses, and the limitations it observes, in reviewing regulations to establish compliance with the standards specified in subdivision (a). The regulations adopted by the office shall ensure that it does not substitute its judgment for that of the rulemaking agency as expressed in the substantive content of adopted regulations.

(d)The office shall return any regulation subject to this chapter to the adopting agency if any of the following occur:

(1)The adopting agency has not prepared the estimate required by paragraph (6) of subdivision (a) of Section 11346.5 and has not included the data used and calculations made and the summary report of the estimate in the file of the rulemaking.

(2)The agency has not complied with Section 11346.3. “Noncompliance” means that the agency failed to complete the economic impact assessment or standardized regulatory impact analysis required by Section 11346.3 or failed to include the assessment or analysis in the file of the rulemaking proceeding as required by Section 11347.3.

(3)The adopting agency has prepared the estimate required by paragraph (6) of subdivision (a) of Section 11346.5, the estimate indicates that the regulation will result in a cost to local agencies or school districts that is required to be reimbursed under Part 7 (commencing with Section 17500) of Division 4, and the adopting agency fails to do any of the following:

(A)Cite an item in the Budget Act for the fiscal year in which the regulation will go into effect as the source from which the Controller may pay the claims of local agencies or school districts.

(B)Cite an accompanying bill appropriating funds as the source from which the Controller may pay the claims of local agencies or school districts.

(C)Attach a letter or other documentation from the Department of Finance which states that the Department of Finance has approved a request by the agency that funds be included in the Budget Bill for the next following fiscal year to reimburse local agencies or school districts for the costs mandated by the regulation.

(D)Attach a letter or other documentation from the Department of Finance which states that the Department of Finance has authorized the augmentation of the amount available for expenditure under the agency’s appropriation in the Budget Act which is for reimbursement pursuant to Part 7 (commencing with Section 17500) of Division 4 to local agencies or school districts from the unencumbered balances of other appropriations in the Budget Act and that this augmentation is sufficient to reimburse local agencies or school districts for their costs mandated by the regulation.

(4)The proposed regulation conflicts with an existing state regulation and the agency has not identified the manner in which the conflict may be resolved.

(5)The agency did not make the alternatives determination as required by paragraph (4) of subdivision (a) of Section 11346.9.

(6)The office decides that the record of the rulemaking proceeding or other documentation for the proposed regulation does not demonstrate that the regulation is authorized by a clearly articulated and affirmatively expressed state law, that the regulation does not further the public protection mission of the state agency, or that the impact on competition is not justified in light of the applicable regulatory rationale for the regulation.

(e)The office shall notify the Department of Finance of all regulations returned pursuant to subdivision (d).

(f)The office shall return a rulemaking file to the submitting agency if the file does not comply with subdivisions (a) and (b) of Section 11347.3. Within three state working days of the receipt of a rulemaking file, the office shall notify the submitting agency of any deficiency identified. If no notice of deficiency is mailed to the adopting agency within that time, a rulemaking file shall be deemed submitted as of the date of its original receipt by the office. A rulemaking file shall not be deemed submitted until each deficiency identified under this subdivision has been corrected.

(g)Notwithstanding any other law, return of the regulation to the adopting agency by the office pursuant to this section is the exclusive remedy for a failure to comply with subdivision (c) of Section 11346.3 or paragraph (10) of subdivision (a) of Section 11346.5.

(h)The office may designate, employ, or contract for the services of independent antitrust or applicable economic experts when reviewing proposed regulations for competitive impact. When reviewing a regulation for competitive impact, the office shall do all of the following:

(1)If the Director of Consumer Affairs issued a written decision pursuant to subdivision (c) of Section 109 of the Business and Professions Code, the office shall review and consider the decision and all supporting documentation in the rulemaking file.

(2)Consider whether the anticompetitive effects of the proposed regulation are clearly outweighed by the public policy merits.

(3)Provide a written opinion setting forth the office’s findings and substantive conclusions under paragraph (2), including, but not limited to, whether rejection or modification of the proposed regulation is necessary to ensure that restraints of trade are related to and advance the public policy underlying the applicable regulatory rationale.

SEC. 21.SEC. 19.

 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.