Amended in Senate April 6, 2016

Senate BillNo. 1195


Introduced by Senator Hill

February 18, 2016


An act to amend Sectionsbegin delete 4800 and 4804.5 ofend deletebegin insert 109, 116, 153, 307, 313.1, 2708, 4800, 4804.5, 4825.1, 4830, and 4846.5 of, and to add Sections 4826.3, 4826.5, 4826.7, 4848.1, and 4853.7 to,end insert the Business and Professions Code,begin insert and to amend Sections 825, 11346.5, 11349, and 11349.1 of the Government Code,end insert relating tobegin delete healing arts.end deletebegin insert professional regulation, and making an appropriation therefor.end insert

LEGISLATIVE COUNSEL’S DIGEST

SB 1195, as amended, Hill. begin deleteVeterinary Medical Board: executive officer. end deletebegin insertProfessions and vocations: board actions: competitive impactend insertbegin insert.end insert

begin insert

(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.

end insert
begin insert

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, to review a decision or other action, except as specified, of a board within the department to determine whether it unreasonably restrains trade and to approve, disapprove, or modify the board decision or action, as specified. The bill would require the director to 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. 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 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.

end insert
begin insert

(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.

end insert
begin insert

This bill would instead prohibit the executive officer from being a licensee of the board.

end insert
begin delete

The

end delete

begin insert(3)end insertbegin insertend insertbegin insertTheend insert 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.begin insert 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 actend insertbegin insert makes a violation of any provision of thend insertbegin inserte act punishable as a misdemeanor.end insert

This bill would extend the operation of the board and the authorization of the board to appoint an executive officer to January 1, 2021.begin insert The bill would authorize a veterinarian and registered veterinary technician who is under the direct supervision of a 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. 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 engaged in the performance of specified duties to be licensed as a veterinarian in the state or hold a university license issued by the board. The bill would require an applicant for a university license to meet certain requirements, including that the applicant passes a specified exam. 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. 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.end insert

begin insert

(4) Existing law, 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.

end insert
begin insert

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.

end insert
begin insert

(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.

end insert
begin insert

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.

end insert
begin insert

(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.

end insert
begin insert

This bill would provide that no reimbursement is required by this act for a specified reason.

end insert

Vote: majority. Appropriation: begin deleteno end deletebegin insertyesend insert. Fiscal committee: yes. State-mandated local program: begin deleteno end deletebegin insertyesend insert.

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

P5    1begin insert

begin insertSECTION 1.end insert  

end insert

begin insertSection 109 of the end insertbegin insertBusiness and Professions Codeend insert
2
begin insert is amended to read:end insert

begin delete
3

109.  

(a) The decisions of any of the boards comprising the
4department with respect to setting standards, conducting
5examinations, passing candidates, and revoking licenses, are not
6subject to review by the director, but are final within the limits
7provided by this code which are applicable to the particular board,
8except as provided in this section.

9(b)

end delete
10begin insert

begin insert109.end insert  

end insert

begin insert(a)end insert The director may initiate an investigation of any
11allegations of misconduct in the preparation, administration, or
12scoring of an examination which is administered by a board, or in
13the review of qualifications which are a part of the licensing process
14of any board. A request for investigation shall be made by the
15director to the Division of Investigation through the chief of the
16division or to any law enforcement agency in the jurisdiction where
17the alleged misconduct occurred.

begin delete

18(c)

end delete

19begin insert(end insertbegin insertb)end insertbegin insert(1)end insertbegin insertend insert The director may intervene in any matter of any board
20where an investigation by the Division of Investigation discloses
21probable cause to believe that the conduct or activity of a board,
22or its members or employees constitutes a violation of criminal
23law.

begin delete

24 The

end delete

P6    1begin insert(2)end insertbegin insertend insertbegin insertTheend insert term “intervene,” as used in paragraphbegin delete (c) of this sectionend delete
2begin insert (1)end insert may include, but is not limited to, an application for a
3restraining order or injunctive relief as specified in Section 123.5,
4or a referral or request for criminal prosecution. For purposes of
5this section, the director shall be deemed to have standing under
6Section 123.5 and shall seek representation of the Attorney
7General, or other appropriate counsel in the event of a conflict in
8pursuing that action.

begin insert

9
(c) The director may, upon his or her own initiative, and shall,
10upon request by a consumer or licensee, review any board decision
11or other action to determine whether it unreasonably restrains
12trade. Such a review shall proceed as follows:

end insert
begin insert

13
(1) The director shall assess whether the action or decision
14reflects a clearly articulated and affirmatively expressed state law.
15If the director determines that the action or decision does not
16reflect a clearly articulated and affirmatively expressed state law,
17the director shall disapprove the board action or decision and it
18shall not go into effect.

end insert
begin insert

19
(2) If the action or decision is a reflection of clearly articulated
20and affirmatively expressed state law, the director shall assess
21whether the action or decision was the result of the board’s
22exercise of ministerial or discretionary judgment. If the director
23finds no exercise of discretionary judgment, but merely the direct
24application of statutory or constitutional provisions, the director
25shall close the investigation and review of the board action or
26decision.

end insert
begin insert

27
(3) If the director concludes under paragraph (2) that the board
28exercised discretionary judgment, the director shall review the
29board action or decision as follows:

end insert
begin insert

30
(A) The director shall conduct a full review of the board action
31or decision using all relevant facts, data, market conditions, public
32comment, studies, or other documentary evidence pertaining to
33the market impacted by the board’s action or decision and
34determine whether the anticompetitive effects of the action or
35decision are clearly outweighed by the benefit to the public. The
36director may seek, designate, employ, or contract for the services
37of independent antitrust or economic experts pursuant to Section
38307. These experts shall not be active participants in the market
39affected by the board action or decision.

end insert
begin insert

P7    1
(B) If the board action or decision was not previously subject
2to a public comment period, the director shall release the subject
3matter of his or her investigation for a 30-day public comment
4period and shall consider all comments received.

end insert
begin insert

5
(C) If the director determines that the action or decision furthers
6the public protection mission of the board and the impact on
7competition is justified, the director may approve the action or
8decision.

end insert
begin insert

9
(D) If the director determines that the action furthers the public
10protection mission of the board and the impact on competition is
11justified, the director may approve the action or decision. If the
12director finds the action or decision does not further the public
13protection mission of the board or finds that the action or decision
14is not justified, the director shall either refuse to approve it or
15shall modify the action or decision to ensure that any restraints
16of trade are related to, and advance, clearly articulated state law
17or public policy.

end insert
begin insert

18
(4) The director shall issue, and post on the department’s
19Internet Web site, his or her final written decision approving,
20modifying, or disapproving the action or decision with an
21explanation of the reasons and rationale behind the director’s
22decision within 90 days from receipt of the request from a
23consumer or licensee. Notwithstanding any other law, the decision
24of the director shall be final, except if the state or federal
25constitution requires an appeal of the director’s decision.

end insert
begin insert

26
(d) The review set forth in paragraph (3) of subdivision (c) shall
27not apply when an individual seeks review of disciplinary or other
28action pertaining solely to that individual.

end insert
begin insert

29
(e) The director shall report to the Chairs of the Senate Business,
30Professions, and Economic Development Committee and the
31Assembly Business and Professions Committee annually,
32commencing March 1, 2017, regarding his or her disapprovals,
33modifications, or findings from any audit, review, or monitoring
34and evaluation conducted pursuant to this section. That report
35shall be submitted in compliance with Section 9795 of the
36Government Code.

end insert
begin insert

37
(f) If the director has already reviewed a board action or
38decision pursuant to this section or Section 313.1, the director
39shall not review that action or decision again.

end insert
begin insert

P8    1
(g) This section shall not be construed to affect, impede, or
2delay any disciplinary actions of any board.

end insert
3begin insert

begin insertSEC. 2.end insert  

end insert

begin insertSection 116 of the end insertbegin insertBusiness and Professions Codeend insertbegin insert is
4amended to read:end insert

5

116.  

(a) The director may audit and review, upon his or her
6own initiative, or upon the request of a consumer or licensee,
7inquiries and complaints regarding licensees, dismissals of
8disciplinary cases, the opening, conduct, or closure of
9investigations, informal conferences, and discipline short of formal
10accusation bybegin delete the Medical Board of California, the allied health
11professional boards, and the California Board of Podiatric
12Medicine. The director may make recommendations for changes
13to the disciplinary system to the appropriate board, the Legislature,
14or both.end delete
begin insert any board or bureau within the department.end insert

15(b) The director shall report to thebegin delete Chairpersonsend deletebegin insert Chairsend insert of the
16Senatebegin delete Business and Professionsend deletebegin insert Business, Professions, and
17Economic Developmentend insert
Committee and the Assemblybegin delete Healthend delete
18begin insert Business and Professionsend insert Committee annually, commencing March
191,begin delete 1995,end deletebegin insert 2017,end insert regarding his or her findings from any audit, review,
20or monitoring and evaluation conducted pursuant to this section.
21
begin insert This report shall be submitted in compliance with Section 9795 of
22the Government Code.end insert

23begin insert

begin insertSEC. 3.end insert  

end insert

begin insertSection 153 of the end insertbegin insertBusiness and Professions Codeend insertbegin insert is
24amended to read:end insert

25

153.  

The director may investigate the work of the several
26boards in his department and may obtain a copy of all records and
27full and complete data in all official matters in possession of the
28boards, their members, officers, orbegin delete employees, other than
29examination questions prior to submission to applicants at
30scheduled examinations.end delete
begin insert employees.end insert

31begin insert

begin insertSEC. 4.end insert  

end insert

begin insertSection 307 of the end insertbegin insertBusiness and Professions Codeend insertbegin insert is
32amended to read:end insert

33

307.  

The director may contract for the services of experts and
34consultants where necessary to carry outbegin delete the provisions ofend delete this
35chapter and may provide compensation and reimbursement of
36expenses forbegin delete suchend deletebegin insert thoseend insert experts and consultants in accordance with
37state law.

38begin insert

begin insertSEC. 5.end insert  

end insert

begin insertSection 313.1 of the end insertbegin insertBusiness and Professions Codeend insert
39
begin insert is amended to read:end insert

P9    1

313.1.  

(a) Notwithstanding any otherbegin delete provision ofend delete law to the
2contrary, no rule orbegin delete regulation, except those relating to
3examinations and qualifications for licensure,end delete
begin insert regulationend insert and no
4fee change proposed or promulgated by any of the boards,
5commissions, or committees within the department, shall take
6effect pending compliance with this section.

7(b) The director shall be formally notified of and shallbegin delete be
8provided a full opportunity toend delete
review, in accordance with the
9requirements of Article 5 (commencing with Section 11346) of
10Chapter 3.5 of Part 1 of Division 3 of Title 2 of the Government
11Code,begin insert the requirements in subdivision (c) of Section 109,end insert and this
12section, all of the following:

13(1) All notices of proposed action, any modifications and
14supplements thereto, and the text of proposed regulations.

15(2) Any notices of sufficiently related changes to regulations
16previously noticed to the public, and the text of proposed
17regulations showing modifications to the text.

18(3) Final rulemaking records.

begin insert

19
(4) All relevant facts, data, public comments, market conditions,
20studies, or other documentary evidence pertaining to the market
21impacted by the proposed regulation. This information shall be
22included in the written decision of the director required under
23paragraph (4) of subdivision (c) of Section 109.

end insert

24(c) The submission of all notices and final rulemaking records
25to the director and thebegin delete completion of theend delete director’sbegin delete review,end delete
26begin insert approval,end insert as authorized by this section, shall be a precondition to
27the filing of any rule or regulation with the Office of Administrative
28Law. The Office of Administrative Law shall have no jurisdiction
29to review a rule or regulation subject to this section until after the
30begin delete completion of theend delete director’s review andbegin delete only then if the director
31has not disapproved it.end delete
begin insert approval.end insert The filing of any document with
32the Office of Administrative Law shall be accompanied by a
33certification that the board, commission, or committee has complied
34with the requirements of this section.

35(d) Following the receipt of any final rulemaking record subject
36to subdivision (a), the director shall have the authority for a period
37of 30 days tobegin insert approve a proposed rule or regulation orend insert disapprove
38a proposed rule or regulation on the ground that it is injurious to
39the public health, safety, orbegin delete welfare.end deletebegin insert welfare, or has an
40impermissible anticompetitive effect. The director may modify a
P10   1rule or regulation as a condition of approval. Any modifications
2to regulations by the director shall be subject to a 30-day public
3comment period before the director issues a final decision
4regarding the modified regulation.end insert
begin insert If the director does not approveend insert
5
begin insert the rule or regulation within the 30-day period, the rule or
6regulation shall not be submitted to the Office of Administrative
7Law and the rule or regulation shall have no effect.end insert

8(e) Final rulemaking records shall be filed with the director
9within the one-year notice period specified in Section 11346.4 of
10the Government Code. If necessary for compliance with this
11section, the one-year notice period may be extended, as specified
12by this subdivision.

13(1) In the event that the one-year notice period lapses during
14the director’s 30-day review period, or within 60 days following
15the notice of the director’s disapproval, it may be extended for a
16maximum of 90 days.

17(2) If the director approves the final rulemakingbegin delete record or
18declines to take action on it within 30 days,end delete
begin insert record,end insert the board,
19commission, or committee shall have five days from the receipt
20of the record from the director within which to file it with the
21Office of Administrative Law.

22(3) If the director disapproves a rule or regulation, it shall have
23no force or effect unless, within 60 days of the notice of
24disapproval, (A) the disapproval is overridden by a unanimous
25vote of the members of the board, commission, or committee, and
26(B) the board, commission, or committee files the final rulemaking
27record with the Office of Administrative Law in compliance with
28this section and the procedures required by Chapter 3.5
29(commencing with Section 11340) of Part 1 of Division 3 of Title
302 of the Government Code.begin insert This paragraph shall not apply to any
31decision disapproved by the director under subdivision (c) of
32Section 109.end insert

33(f)begin deleteend deletebegin deleteNothing in this end deletebegin insertThis end insertsection shallbegin insert notend insert be construed to prohibit
34the director from affirmatively approving a proposed rule,
35regulation, or fee change at any time within the 30-day period after
36it has been submitted to him or her, in which event it shall become
37effective upon compliance with this section and the procedures
38required by Chapter 3.5 (commencing with Section 11340) of Part
391 of Division 3 of Title 2 of the Government Code.

P11   1begin insert

begin insertSEC. 6.end insert  

end insert

begin insertSection 2708 of the end insertbegin insertBusiness and Professions Codeend insertbegin insert is
2amended to read:end insert

3

2708.  

(a) The board shall appoint an executive officer who
4shall perform the duties delegated by the board and who shall be
5responsible to it for the accomplishment of those duties.

6(b) The executive officer shallbegin insert notend insert be abegin delete nurse currently licensedend delete
7begin insert licenseeend insert under this chapter and shall possess other qualifications
8as determined by the board.

9(c) The executive officer shall not be a member of the board.

10(d) This section shall remain in effect only until January 1, 2018,
11and as of that date is repealed, unless a later enacted statute, that
12is enacted before January 1, 2018, deletes or extends that date.

13

begin deleteSECTION 1.end delete
14
begin insertSEC. 7.end insert  

Section 4800 of the Business and Professions Code is
15amended to read:

16

4800.  

(a) There is in the Department of Consumer Affairs a
17Veterinary Medical Board in which the administration of this
18chapter is vested. The board consists of the following members:

19(1) Four licensed veterinarians.

20(2) One registered veterinary technician.

21(3) Three public members.

22(b) This section shall remain in effect only until January 1, 2021,
23and as of that date is repealed.

24(c) Notwithstanding any other law, the repeal of this section
25renders the board subject to review by the appropriate policy
26committees of the Legislature. However, the review of the board
27shall be limited to those issues identified by the appropriate policy
28committees of the Legislature and shall not involve the preparation
29or submission of a sunset review document or evaluative
30questionnaire.

31

begin deleteSEC. 2.end delete
32
begin insertSEC. 8.end insert  

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

34

4804.5.  

(a) The board may appoint a person exempt from civil
35service who shall be designated as an executive officer and who
36shall exercise the powers and perform the duties delegated by the
37board and vested in him or her by this chapter.

38(b) This section shall remain in effect only until January 1, 2021,
39and as of that date is repealed.

P12   1begin insert

begin insertSEC. 9.end insert  

end insert

begin insertSection 4825.1 of the end insertbegin insertBusiness and Professions Codeend insert
2
begin insert is amended to read:end insert

3

4825.1.  

These definitions shall govern the construction of this
4chapter as it applies to veterinary medicine.

5(a) “Diagnosis” means the act or process of identifying or
6determining the health status of an animal through examination
7and the opinion derived from that examination.

8(b) “Animal” means any member of the animal kingdom other
9than humans, and includes fowl, fish, and reptiles, wild or
10domestic, whether living or dead.

11(c) “Food animal” means any animal that is raised for the
12production of an edible product intended for consumption by
13humans. The edible product includes, but is not limited to, milk,
14meat, and eggs. Food animal includes, but is not limited to, cattle
15(beef or dairy), swine, sheep, poultry, fish, and amphibian species.

16(d) “Livestock” includes all animals, poultry, aquatic and
17amphibian species that are raised, kept, or used for profit. It does
18not include those species that are usually kept as pets such as dogs,
19cats, and pet birds, or companion animals, including equines.

begin insert

20
(e) “Compounding,” for the purposes of veterinary medicine,
21shall have the same meaning given in Section 1735 of Title 16 of
22the California Code of Regulations, except that every reference
23therein to “pharmacy” and “pharmacist” shall be replaced with
24“veterinary premises” and “veterinarian,” and except that only
25a licensed veterinarian or a licensed registered veterinarian
26technician under direct supervision of a veterinarian may perform
27compounding and shall not delegate to or supervise any part of
28the performance of compounding by any other person.

end insert
29begin insert

begin insertSEC. 10.end insert  

end insert

begin insertSection 4826.3 is added to the end insertbegin insertBusiness and
30Professions Code
end insert
begin insert, to read:end insert

begin insert
31

begin insert4826.3.end insert  

(a) Notwithstanding Section 4051, a veterinarian or
32registered veterinarian technician under the direct supervision of
33a veterinarian with a current and active license may compound a
34drug for anesthesia, the prevention, cure, or relief of a wound,
35fracture, bodily injury, or disease of an animal in a premises
36currently and actively registered with the board and only under
37the following conditions:

38
(1) Where there is no FDA-approved animal or human drug
39that can be used as labeled or in an appropriate extralabel manner
P13   1to properly treat the disease, symptom, or condition for which the
2drug is being prescribed.

3
(2) Where the compounded drug is not available from a
4compounding pharmacy, outsourcing facility, or other
5compounding supplier in a dosage form and concentration to
6appropriately treat the disease, symptom, or condition for which
7the drug is being prescribed.

8
(3) Where the need and prescription for the compounded
9medication has arisen within an established
10veterinarian-client-patient relationship as a means to treat a
11specific occurrence of a disease, symptom, or condition observed
12and diagnosed by the veterinarian in a specific animal that
13threatens the health of the animal or will cause suffering or death
14if left untreated.

15
(4) Where the quantity compounded does not exceed a quantity
16demonstrably needed to treat a patient with which the veterinarian
17has a current veterinarian-client-patient relationship.

18
(5) Except as specified in subdivision (c), where the compound
19is prepared only with commercially available FDA-approved
20animal or human drugs as active ingredients.

21
(b) A compounded veterinary drug may be prepared from an
22FDA-approved animal or human drug for extralabel use only when
23there is no approved animal or human drug that, when used as
24labeled or in an appropriate extralabel manner will, in the
25available dosage form and concentration, treat the disease,
26symptom, or condition. Compounding from an approved human
27drug for use in food-producing animals is not permitted if an
28approved animal drug can be used for compounding.

29
(c) A compounded veterinary drug may be prepared from bulk
30drug substances only when:

31
(1) The drug is compounded and dispensed by the veterinarian
32to treat an individually identified animal patient under his or her
33care.

34
(2) The drug is not intended for use in food-producing animals.

35
(3) If the drug contains a bulk drug substance that is a
36component of any marketed FDA-approved animal or human drug,
37there is a change between the compounded drug and the
38comparable marketed drug made for an individually identified
39animal patient that produces a clinical difference for that
40individually identified animal patient, as determined by the
P14   1veterinarian prescribing the compounded drug for his or her
2patient.

3
(4) There are no FDA-approved animal or human drugs that
4can be used as labeled or in an appropriate extralabel manner to
5properly treat the disease, symptom, or condition for which the
6drug is being prescribed.

7
(5) All bulk drug substances used in compounding are
8manufactured by an establishment registered under Section 360
9of Title 21 of the United States Code and are accompanied by a
10valid certificate of analysis.

11
(6) The drug is not sold or transferred by the veterinarian
12compounding the drug, except that the veterinarian shall be
13permitted to administer the drug to a patient under his or her care
14or dispense it to the owner or caretaker of an animal under his or
15her care.

16
(7) Within 15 days of becoming aware of any product defect or
17serious adverse event associated with any drug compounded by
18the veterinarian from bulk drug substances, the veterinarian shall
19report it to the federal Food and Drug Administration on Form
20FDA 1932a.

21
(8) In addition to any other requirements, the label of any
22veterinary drug compounded from bulk drug substances shall
23indicate the species of the intended animal patient, the name of
24the animal patient, and the name of the owner or caretaker of the
25patient.

26
(d) Each compounded veterinary drug preparation shall meet
27the labeling requirements of Section 4076 and Sections 1707.5
28and 1735.4 of Title 16 of the California Code of Regulations, except
29that every reference therein to “pharmacy” and “pharmacist”
30shall be replaced by “veterinary premises” and “veterinarian,”
31and any reference to “patient” shall be understood to refer to the
32animal patient. In addition, each label on a compounded veterinary
33drug preparation shall include withdrawal and holding times, if
34needed, and the disease, symptom, or condition for which the drug
35is being prescribed. Any compounded veterinary drug preparation
36that is intended to be sterile, including for injection, administration
37into the eye, or inhalation, shall in addition meet the labeling
38requirements of Section 1751.2 of Title 16 of the California Code
39of Regulations, except that every reference therein to “pharmacy”
40and “pharmacist” shall be replaced by “veterinary premises” and
P15   1“veterinarian,” and any reference to “patient” shall be understood
2to refer to the animal patient.

3
(e) Any veterinarian, registered veterinarian technician who is
4under the direct supervision of a veterinarian, and veterinary
5premises engaged in compounding shall meet the compounding
6requirements for pharmacies and pharmacists stated by the
7provisions of Article 4.5 (commencing with Section 1735) of Title
816 of the California Code of Regulations, except that every
9reference therein to “pharmacy” and “pharmacist” shall be
10replaced by “veterinary premises” and “veterinarian,” and any
11reference to “patient” shall be understood to refer to the animal
12patient:

13
(1) Section 1735.1 of Title 16 of the California Code of
14Regulations.

15
(2) Subdivisions (d),(e), (f), (g), (h), (i), (j), (k), and (l) of Section
161735.2 of Title 16 of the California Code of Regulations.

17
(3) Section 1735.3 of Title 16 of the California Code of
18Regulations, except that only a licensed veterinarian or registered
19veterinarian technician may perform compounding and shall not
20delegate to or supervise any part of the performance of
21compounding by any other person.

22
(4) Section 1735.4 of Title 16 of the California Code of
23Regulations.

24
(5) Section 1735.5 of Title 16 of the California Code of
25Regulations.

26
(6) Section 1735.6 of Title 16 of the California Code of
27Regulations.

28
(7) Section 1735.7 of Title 16 of the California Code of
29Regulations.

30
(8) Section 1735.8 of Title 16 of the California Code of
31Regulations.

32
(f) Any veterinarian, registered veterinarian technician under
33the direct supervision of a veterinarian, and veterinary premises
34engaged in sterile compounding shall meet the sterile compounding
35requirements for pharmacies and pharmacists under Article 7
36(commencing with Section 1751) of Title 16 of the California Code
37of Regulations, except that every reference therein to “pharmacy”
38and “pharmacist” shall be replaced by “veterinary premises” and
39“veterinarian,” and any reference to “patient” shall be understood
40to refer to the animal patient.

P16   1
(g) The California State Board of Pharmacy shall have authority
2with the board to ensure compliance with this section and shall
3have the right to inspect any veterinary premises engaged in
4compounding, along with or separate from the board, to ensure
5compliance with this section. The board is specifically charged
6with enforcing this section with regard to its licensees.

end insert
7begin insert

begin insertSEC. 11.end insert  

end insert

begin insertSection 4826.5 is added to the end insertbegin insertBusiness and
8Professions Code
end insert
begin insert, to read:end insert

begin insert
9

begin insert4826.5.end insert  

Failure by a licensed veterinarian, registered
10veterinarian technician, or veterinary premises to comply with the
11provisions of this article shall be deemed unprofessional conduct
12and constitute grounds for discipline.

end insert
13begin insert

begin insertSEC. 12.end insert  

end insert

begin insertSection 4826.7 is added to the end insertbegin insertBusiness and
14Professions Code
end insert
begin insert, to read:end insert

begin insert
15

begin insert4826.7.end insert  

The board may adopt regulations to implement the
16provisions of this article.

end insert
17begin insert

begin insertSEC. 13.end insert  

end insert

begin insertSection 4830 of the end insertbegin insertBusiness and Professions Codeend insert
18
begin insert is amended to read:end insert

19

4830.  

(a) This chapter does not apply to:

20(1) Veterinarians while serving in any armed branch of the
21military service of the United States or the United States
22Department of Agriculture while actually engaged and employed
23in their official capacity.

24(2) Regularly licensed veterinarians in actual consultation from
25other states.

26(3) Regularly licensed veterinarians actually called from other
27states to attend cases in this state, but who do not open an office
28or appoint a place to do business within this state.

begin delete

29(4) Veterinarians employed by the University of California
30while engaged in the performance of duties in connection with the
31College of Agriculture, the Agricultural Experiment Station, the
32School of Veterinary Medicine, or the agricultural extension work
33of the university or employed by the Western University of Health
34Sciences while engaged in the performance of duties in connection
35with the College of Veterinary Medicine or the agricultural
36extension work of the university.

37(5)

end delete

38begin insert(end insertbegin insert4)end insert Students in the School of Veterinary Medicine of the
39University of California or the College of Veterinary Medicine of
40the Western University of Health Sciences who participate in
P17   1diagnosis and treatment as part of their educational experience,
2including those in off-campus educational programs under the
3direct supervision of a licensed veterinarian in good standing, as
4defined in paragraph (1) of subdivision (b) of Section 4848,
5appointed by the University of California, Davis, or the Western
6University of Health Sciences.

begin delete

7(6)

end delete

8begin insert(end insertbegin insert5)end insert A veterinarian who is employed by the Meat and Poultry
9Inspection Branch of the California Department of Food and
10Agriculture while actually engaged and employed in his or her
11official capacity. A person exempt under this paragraph shall not
12otherwise engage in the practice of veterinary medicine unless he
13or she is issued a license by the board.

begin delete

14(7)

end delete

15begin insert(6)end insert Unlicensed personnel employed by the Department of Food
16and Agriculture or the United States Department of Agriculture
17when in the course of their duties they are directed by a veterinarian
18supervisor to conduct an examination, obtain biological specimens,
19apply biological tests, or administer medications or biological
20products as part of government disease or condition monitoring,
21investigation, control, or eradication activities.

22(b) (1) For purposes of paragraph (3) of subdivision (a), a
23regularly licensed veterinarian in good standing who is called from
24another state by a law enforcement agency or animal control
25agency, as defined in Section 31606 of the Food and Agricultural
26Code, to attend to cases that are a part of an investigation of an
27alleged violation of federal or state animal fighting or animal
28cruelty laws within a single geographic location shall be exempt
29from the licensing requirements of this chapter if the law
30enforcement agency or animal control agency determines that it
31is necessary to call the veterinarian in order for the agency or
32officer to conduct the investigation in a timely, efficient, and
33effective manner. In determining whether it is necessary to call a
34veterinarian from another state, consideration shall be given to the
35availability of veterinarians in this state to attend to these cases.
36An agency, department, or officer that calls a veterinarian pursuant
37to this subdivision shall notify the board of the investigation.

38(2) Notwithstanding any other provision of this chapter, a
39regularly licensed veterinarian in good standing who is called from
40another state to attend to cases that are a part of an investigation
P18   1described in paragraph (1) may provide veterinary medical care
2for animals that are affected by the investigation with a temporary
3shelter facility, and the temporary shelter facility shall be exempt
4from the registration requirement of Section 4853 if all of the
5following conditions are met:

6(A) The temporary shelter facility is established only for the
7purpose of the investigation.

8(B) The temporary shelter facility provides veterinary medical
9care, shelter, food, and water only to animals that are affected by
10the investigation.

11(C) The temporary shelter facility complies with Section 4854.

12(D) The temporary shelter facility exists for not more than 60
13days, unless the law enforcement agency or animal control agency
14determines that a longer period of time is necessary to complete
15the investigation.

16(E) Within 30 calendar days upon completion of the provision
17of veterinary health care services at a temporary shelter facility
18established pursuant to this section, the veterinarian called from
19another state by a law enforcement agency or animal control agency
20to attend to a case shall file a report with the board. The report
21shall contain the date, place, type, and general description of the
22care provided, along with a listing of the veterinary health care
23practitioners who participated in providing that care.

24(c) For purposes of paragraph (3) of subdivision (a), the board
25may inspect temporary facilities established pursuant to this
26section.

27begin insert

begin insertSEC. 14.end insert  

end insert

begin insertSection 4846.5 of the end insertbegin insertBusiness and Professions Codeend insert
28
begin insert is amended to read:end insert

29

4846.5.  

(a) Except as provided in this section, the board shall
30issue renewal licenses only to those applicants that have completed
31a minimum of 36 hours of continuing education in the preceding
32two years.

33(b) (1) Notwithstanding any other law, continuing education
34hours shall be earned by attending courses relevant to veterinary
35medicine and sponsored or cosponsored by any of the following:

36(A) American Veterinary Medical Association (AVMA)
37accredited veterinary medical colleges.

38(B) Accredited colleges or universities offering programs
39relevant to veterinary medicine.

40(C) The American Veterinary Medical Association.

P19   1(D) American Veterinary Medical Association recognized
2specialty or affiliated allied groups.

3(E) American Veterinary Medical Association’s affiliated state
4veterinary medical associations.

5(F) Nonprofit annual conferences established in conjunction
6with state veterinary medical associations.

7(G) Educational organizations affiliated with the American
8Veterinary Medical Association or its state affiliated veterinary
9medical associations.

10(H) Local veterinary medical associations affiliated with the
11California Veterinary Medical Association.

12(I) Federal, state, or local government agencies.

13(J) Providers accredited by the Accreditation Council for
14Continuing Medical Education (ACCME) or approved by the
15American Medical Association (AMA), providers recognized by
16the American Dental Association Continuing Education
17Recognition Program (ADA CERP), and AMA or ADA affiliated
18state, local, and specialty organizations.

19(2) Continuing education credits shall be granted to those
20veterinarians taking self-study courses, which may include, but
21are not limited to, reading journals, viewing video recordings, or
22listening to audio recordings. The taking of these courses shall be
23limited to no more than six hours biennially.

24(3) The board may approve other continuing veterinary medical
25education providers not specified in paragraph (1).

26(A) The board has the authority to recognize national continuing
27education approval bodies for the purpose of approving continuing
28education providers not specified in paragraph (1).

29(B) Applicants seeking continuing education provider approval
30shall have the option of applying to the board or to a
31board-recognized national approval body.

32(4) For good cause, the board may adopt an order specifying,
33on a prospective basis, that a provider of continuing veterinary
34medical education authorized pursuant to paragraph (1) or (3) is
35no longer an acceptable provider.

36(5) Continuing education hours earned by attending courses
37sponsored or cosponsored by those entities listed in paragraph (1)
38between January 1, 2000, and January 1, 2001, shall be credited
39toward a veterinarian’s continuing education requirement under
40this section.

P20   1(c) Every person renewing his or her license issued pursuant to
2Section 4846.4, or any person applying for relicensure or for
3reinstatement of his or her license to active status, shall submit
4proof of compliance with this section to the board certifying that
5he or she is in compliance with this section. Any false statement
6submitted pursuant to this section shall be a violation subject to
7Section 4831.

8(d) This section shall not apply to a veterinarian’s first license
9renewal. This section shall apply only to second and subsequent
10license renewals granted on or after January 1, 2002.

11(e) The board shall have the right to audit the records of all
12applicants to verify the completion of the continuing education
13requirement. Applicants shall maintain records of completion of
14required continuing education coursework for a period of four
15years and shall make these records available to the board for
16auditing purposes upon request. If the board, during this audit,
17questions whether any course reported by the veterinarian satisfies
18the continuing education requirement, the veterinarian shall provide
19information to the board concerning the content of the course; the
20name of its sponsor and cosponsor, if any; and specify the specific
21curricula that was of benefit to the veterinarian.

22(f) A veterinarian desiring an inactive license or to restore an
23inactive license under Section 701 shall submit an application on
24a form provided by the board. In order to restore an inactive license
25to active status, the veterinarian shall have completed a minimum
26of 36 hours of continuing education within the last two years
27preceding application. The inactive license status of a veterinarian
28shall not deprive the board of its authority to institute or continue
29a disciplinary action against a licensee.

30(g) Knowing misrepresentation of compliance with this article
31by a veterinarian constitutes unprofessional conduct and grounds
32for disciplinary action or for the issuance of a citation and the
33imposition of a civil penalty pursuant to Section 4883.

34(h) The board, in its discretion, may exempt from the continuing
35education requirement any veterinarian who for reasons of health,
36military service, or undue hardship cannot meet those requirements.
37Applications for waivers shall be submitted on a form provided
38by the board.

39(i) The administration of this section may be funded through
40professional license and continuing education provider fees. The
P21   1fees related to the administration of this section shall not exceed
2the costs of administering the corresponding provisions of this
3section.

4(j) For those continuing education providers not listed in
5paragraph (1) of subdivision (b), the board or its recognized
6national approval agent shall establish criteria by which a provider
7of continuing education shall be approved. The board shall initially
8review and approve these criteria and may review the criteria as
9needed. The board or its recognized agent shall monitor, maintain,
10and manage related records and data. The board may impose an
11application fee, not to exceed two hundred dollars ($200)
12biennially, for continuing education providers not listed in
13paragraph (1) of subdivision (b).

14(k) (1)  begin deleteOn or after end delete begin insertBeginning end insertJanuary 1, 2018, a licensed
15veterinarian who renews his or her license shall complete a
16minimum of one credit hour of continuing education on the
17judicious use of medically important antimicrobial drugs every
18four years as part of his or her continuing education requirements.

19(2) For purposes of this subdivision, “medically important
20antimicrobial drug” means an antimicrobial drug listed in Appendix
21A of the federal Food and Drug Administration’s Guidance for
22Industry #152, including critically important, highly important,
23and important antimicrobial drugs, as that appendix may be
24amended.

25begin insert

begin insertSEC. 15.end insert  

end insert

begin insertSection 4848.1 is added to the end insertbegin insertBusiness and
26Professions Code
end insert
begin insert, to read:end insert

begin insert
27

begin insert4848.1.end insert  

(a) A veterinarian engaged in the practice of veterinary
28medicine, as defined in Section 4826, employed by the University
29of California while engaged in the performance of duties in
30connection with the School of Veterinary Medicine or employed
31by the Western University of Health Sciences while engaged in the
32performance of duties in connection with the College of Veterinary
33Medicine shall be licensed in California or shall hold a university
34license issued by the board.

35
(b) An applicant is eligible to hold a university license if all of
36the following are satisfied:

37
(1) The applicant is currently employed by the University of
38California or Western University of Health Sciences as defined in
39subdivision (a).

P22   1
(2) Passes an examination concerning the statutes and
2regulations of the Veterinary Medicine Practice Act, administered
3by the board, pursuant to subparagraph (C) of paragraph (2) of
4subdivision (a) of Section 4848.

5
(3) Successfully completes the approved educational curriculum
6described in paragraph (5) of subdivision (b) of Section 4848 on
7regionally specific and important diseases and conditions.

8
(c) A university license:

9
(1) Shall be numbered as described in Section 4847.

10
(2) Shall cease to be valid upon termination of employment by
11the University of California or by the Western University of Health
12Sciences.

13
(3) Shall be subject to the license renewal provisions in Section
144846.4.

15
(4) Shall be subject to denial, revocation, or suspension pursuant
16to Sections 4875 and 4883.

17
(d) An individual who holds a University License is exempt from
18satisfying the license renewal requirements of Section 4846.5.

end insert
19begin insert

begin insertSEC. 16.end insert  

end insert

begin insertSection 4853.7 is added to the end insertbegin insertBusiness and
20Professions Code
end insert
begin insert, to read:end insert

begin insert
21

begin insert4853.7.end insert  

A premise registration that is not renewed within five
22years after its expiration may not be renewed and shall not be
23restored, reissued, or reinstated thereafter. However, an
24application for a new premise registration may be submitted and
25obtained if both of the following conditions are met:

26
(a) No fact, circumstance, or condition exists that, if the premise
27registration was issued, would justify its revocation or suspension.

28
(b) All of the fees that would be required for the initial premise
29registration are paid at the time of application.

end insert
30begin insert

begin insertSEC. 17.end insert  

end insert

begin insertSection 825 of the end insertbegin insertGovernment Codeend insertbegin insert is amended to
31read:end insert

32

825.  

(a) Except as otherwise provided in this section, if an
33employee or former employee of a public entity requests the public
34entity to defend him or her against any claim or action against him
35or her for an injury arising out of an act or omission occurring
36within the scope of his or her employment as an employee of the
37public entity and the request is made in writing not less than 10
38days before the day of trial, and the employee or former employee
39reasonably cooperates in good faith in the defense of the claim or
40action, the public entity shall pay any judgment based thereon or
P23   1any compromise or settlement of the claim or action to which the
2public entity has agreed.

3If the public entity conducts the defense of an employee or
4former employee against any claim or action with his or her
5reasonable good-faith cooperation, the public entity shall pay any
6judgment based thereon or any compromise or settlement of the
7claim or action to which the public entity has agreed. However,
8where the public entity conducted the defense pursuant to an
9agreement with the employee or former employee reserving the
10rights of the public entity not to pay the judgment, compromise,
11or settlement until it is established that the injury arose out of an
12act or omission occurring within the scope of his or her
13employment as an employee of the public entity, the public entity
14is required to pay the judgment, compromise, or settlement only
15if it is established that the injury arose out of an act or omission
16occurring in the scope of his or her employment as an employee
17of the public entity.

18Nothing in this section authorizes a public entity to pay that part
19of a claim or judgment that is for punitive or exemplary damages.

20(b) Notwithstanding subdivision (a) or any other provision of
21law, a public entity is authorized to pay that part of a judgment
22that is for punitive or exemplary damages if the governing body
23of that public entity, acting in its sole discretion except in cases
24involving an entity of the state government, finds all of the
25following:

26(1) The judgment is based on an act or omission of an employee
27or former employee acting within the course and scope of his or
28her employment as an employee of the public entity.

29(2) At the time of the act giving rise to the liability, the employee
30or former employee acted, or failed to act, in good faith, without
31actual malice and in the apparent best interests of the public entity.

32(3) Payment of the claim or judgment would be in the best
33interests of the public entity.

34As used in this subdivision with respect to an entity of state
35government, “a decision of the governing body” means the
36approval of the Legislature for payment of that part of a judgment
37that is for punitive damages or exemplary damages, upon
38recommendation of the appointing power of the employee or
39former employee, based upon the finding by the Legislature and
40the appointing authority of the existence of the three conditions
P24   1for payment of a punitive or exemplary damages claim. The
2provisions of subdivision (a) of Section 965.6 shall apply to the
3payment of any claim pursuant to this subdivision.

4The discovery of the assets of a public entity and the introduction
5of evidence of the assets of a public entity shall not be permitted
6in an action in which it is alleged that a public employee is liable
7for punitive or exemplary damages.

8The possibility that a public entity may pay that part of a
9judgment that is for punitive damages shall not be disclosed in any
10trial in which it is alleged that a public employee is liable for
11punitive or exemplary damages, and that disclosure shall be
12grounds for a mistrial.

13(c) Except as provided in subdivision (d), if the provisions of
14this section are in conflict with the provisions of a memorandum
15of understanding reached pursuant to Chapter 10 (commencing
16with Section 3500) of Division 4 of Title 1, the memorandum of
17understanding shall be controlling without further legislative action,
18except that if those provisions of a memorandum of understanding
19require the expenditure of funds, the provisions shall not become
20effective unless approved by the Legislature in the annual Budget
21Act.

22(d) The subject of payment of punitive damages pursuant to this
23section or any other provision of law shall not be a subject of meet
24and confer under the provisions of Chapter 10 (commencing with
25Section 3500) of Division 4 of Title 1, or pursuant to any other
26law or authority.

27(e) Nothing in this section shall affect the provisions of Section
28818 prohibiting the award of punitive damages against a public
29entity. This section shall not be construed as a waiver of a public
30entity’s immunity from liability for punitive damages under Section
311981, 1983, or 1985 of Title 42 of the United States Code.

32(f) (1) Except as provided in paragraph (2), a public entity shall
33not pay a judgment, compromise, or settlement arising from a
34claim or action against an elected official, if the claim or action is
35based on conduct by the elected official by way of tortiously
36intervening or attempting to intervene in, or by way of tortiously
37influencing or attempting to influence the outcome of, any judicial
38action or proceeding for the benefit of a particular party by
39contacting the trial judge or any commissioner, court-appointed
40arbitrator, court-appointed mediator, or court-appointed special
P25   1referee assigned to the matter, or the court clerk, bailiff, or marshal
2after an action has been filed, unless he or she was counsel of
3record acting lawfully within the scope of his or her employment
4on behalf of that party. Notwithstanding Section 825.6, if a public
5entity conducted the defense of an elected official against such a
6claim or action and the elected official is found liable by the trier
7of fact, the court shall order the elected official to pay to the public
8entity the cost of that defense.

9(2) If an elected official is held liable for monetary damages in
10the action, the plaintiff shall first seek recovery of the judgment
11against the assets of the elected official. If the elected official’s
12assets are insufficient to satisfy the total judgment, as determined
13by the court, the public entity may pay the deficiency if the public
14entity is authorized by law to pay that judgment.

15(3) To the extent the public entity pays any portion of the
16judgment or is entitled to reimbursement of defense costs pursuant
17to paragraph (1), the public entity shall pursue all available
18creditor’s remedies against the elected official, including
19garnishment, until that party has fully reimbursed the public entity.

20(4) This subdivision shall not apply to any criminal or civil
21enforcement action brought in the name of the people of the State
22of California by an elected district attorney, city attorney, or
23attorney general.

begin insert

24
(g) Notwithstanding subdivision (a), a public entity shall pay
25for a judgment or settlement for treble damage antitrust awards
26against a member of a regulatory board for an act or omission
27occurring within the scope of his or her employment as a member
28of a regulatory board.

end insert
29begin insert

begin insertSEC. 18.end insert  

end insert

begin insertSection 11346.5 of the end insertbegin insertGovernment Codeend insertbegin insert is amended
30to read:end insert

31

11346.5.  

(a) The notice of proposed adoption, amendment, or
32repeal of a regulation shall include the following:

33(1) A statement of the time, place, and nature of proceedings
34for adoption, amendment, or repeal of the regulation.

35(2) Reference to the authority under which the regulation is
36proposed and a reference to the particular code sections or other
37provisions of law that are being implemented, interpreted, or made
38specific.

P26   1(3) An informative digest drafted in plain English in a format
2similar to the Legislative Counsel’s digest on legislative bills. The
3informative digest shall include the following:

4(A) A concise and clear summary of existing laws and
5regulations, if any, related directly to the proposed action and of
6the effect of the proposed action.

7(B) If the proposed action differs substantially from an existing
8comparable federal regulation or statute, a brief description of the
9significant differences and the full citation of the federal regulations
10or statutes.

11(C) A policy statement overview explaining the broad objectives
12of the regulation and the specific benefits anticipated by the
13proposed adoption, amendment, or repeal of a regulation, including,
14to the extent applicable, nonmonetary benefits such as the
15protection of public health and safety, worker safety, or the
16environment, the prevention of discrimination, the promotion of
17fairness or social equity, and the increase in openness and
18transparency in business and government, among other things.

19(D) An evaluation of whether the proposed regulation is
20inconsistent or incompatible with existing state regulations.

21(4) Any other matters as are prescribed by statute applicable to
22the specific state agency or to any specific regulation or class of
23regulations.

24(5) A determination as to whether the regulation imposes a
25mandate on local agencies or school districts and, if so, whether
26the mandate requires state reimbursement pursuant to Part 7
27(commencing with Section 17500) of Division 4.

28(6) An estimate, prepared in accordance with instructions
29adopted by the Department of Finance, of the cost or savings to
30any state agency, the cost to any local agency or school district
31that is required to be reimbursed under Part 7 (commencing with
32Section 17500) of Division 4, other nondiscretionary cost or
33savings imposed on local agencies, and the cost or savings in
34federal funding to the state.

35For purposes of this paragraph, “cost or savings” means
36additional costs or savings, both direct and indirect, that a public
37agency necessarily incurs in reasonable compliance with
38regulations.

39(7) If a state agency, in proposing to adopt, amend, or repeal
40any administrative regulation, makes an initial determination that
P27   1the action may have a significant, statewide adverse economic
2impact directly affecting business, including the ability of
3California businesses to compete with businesses in other states,
4it shall include the following information in the notice of proposed
5action:

6(A) Identification of the types of businesses that would be
7 affected.

8(B) A description of the projected reporting, recordkeeping, and
9other compliance requirements that would result from the proposed
10action.

11(C) The following statement: “The (name of agency) has made
12an initial determination that the (adoption/amendment/repeal) of
13this regulation may have a significant, statewide adverse economic
14impact directly affecting business, including the ability of
15California businesses to compete with businesses in other states.
16The (name of agency) (has/has not) considered proposed
17alternatives that would lessen any adverse economic impact on
18business and invites you to submit proposals. Submissions may
19include the following considerations:

20(i) The establishment of differing compliance or reporting
21requirements or timetables that take into account the resources
22available to businesses.

23(ii) Consolidation or simplification of compliance and reporting
24requirements for businesses.

25(iii) The use of performance standards rather than prescriptive
26standards.

27(iv) Exemption or partial exemption from the regulatory
28requirements for businesses.”

29(8) If a state agency, in adopting, amending, or repealing any
30administrative regulation, makes an initial determination that the
31action will not have a significant, statewide adverse economic
32impact directly affecting business, including the ability of
33California businesses to compete with businesses in other states,
34it shall make a declaration to that effect in the notice of proposed
35action. In making this declaration, the agency shall provide in the
36record facts, evidence, documents, testimony, or other evidence
37upon which the agency relies to support its initial determination.

38An agency’s initial determination and declaration that a proposed
39adoption, amendment, or repeal of a regulation may have or will
40not have a significant, adverse impact on businesses, including the
P28   1ability of California businesses to compete with businesses in other
2states, shall not be grounds for the office to refuse to publish the
3notice of proposed action.

4(9) A description of all cost impacts, known to the agency at
5the time the notice of proposed action is submitted to the office,
6that a representative private person or business would necessarily
7incur in reasonable compliance with the proposed action.

8If no cost impacts are known to the agency, it shall state the
9following:

10“The agency is not aware of any cost impacts that a
11representative private person or business would necessarily incur
12in reasonable compliance with the proposed action.”

13(10) A statement of the results of the economic impact
14assessment required by subdivision (b) of Section 11346.3 or the
15standardized regulatory impact analysis if required by subdivision
16(c) of Section 11346.3, a summary of any comments submitted to
17the agency pursuant to subdivision (f) of Section 11346.3 and the
18agency’s response to those comments.

19(11) The finding prescribed by subdivision (d) of Section
2011346.3, if required.

21(12) (A) A statement that the action would have a significant
22effect on housing costs, if a state agency, in adopting, amending,
23or repealing any administrative regulation, makes an initial
24determination that the action would have that effect.

25(B) The agency officer designated in paragraphbegin delete (14)end deletebegin insert (15)end insert shall
26make available to the public, upon request, the agency’s evaluation,
27if any, of the effect of the proposed regulatory action on housing
28costs.

29(C) The statement described in subparagraph (A) shall also
30include the estimated costs of compliance and potential benefits
31of a building standard, if any, that were included in the initial
32statement of reasons.

33(D) For purposes of model codes adopted pursuant to Section
3418928 of the Health and Safety Code, the agency shall comply
35with the requirements of this paragraph only if an interested party
36has made a request to the agency to examine a specific section for
37purposes of estimating the costs of compliance and potential
38benefits for that section, as described in Section 11346.2.

begin insert

39
(13) If the regulatory action is submitted by a state board on
40which a controlling number of decisionmakers are active market
P29   1participants in the market the board regulates, a statement that
2the adopting agency has evaluated the impact of the proposed
3regulation on competition, and that the proposed regulation
4furthers a clearly articulated and affirmatively expressed state law
5to restrain competition.

end insert
begin delete

6(13)

end delete

7begin insert(14)end insert A statement that the adopting agency must determine that
8no reasonable alternative considered by the agency or that has
9otherwise been identified and brought to the attention of the agency
10would be more effective in carrying out the purpose for which the
11action is proposed, would be as effective and less burdensome to
12affected private persons than the proposed action, or would be
13more cost effective to affected private persons and equally effective
14in implementing the statutory policy or other provision of law. For
15a major regulation, as defined by Section 11342.548, proposed on
16or after November 1, 2013, the statement shall be based, in part,
17upon the standardized regulatory impact analysis of the proposed
18regulation, as required by Section 11346.3, as well as upon the
19benefits of the proposed regulation identified pursuant to
20subparagraph (C) of paragraph (3).

begin delete

21(14)

end delete

22begin insert(15)end insert The name and telephone number of the agency
23representative and designated backup contact person to whom
24inquiries concerning the proposed administrative action may be
25directed.

begin delete

26(15)

end delete

27begin insert(16)end insert The date by which comments submitted in writing must
28be received to present statements, arguments, or contentions in
29writing relating to the proposed action in order for them to be
30considered by the state agency before it adopts, amends, or repeals
31a regulation.

begin delete

32(16)

end delete

33begin insert(17)end insert Reference to the fact that the agency proposing the action
34has prepared a statement of the reasons for the proposed action,
35has available all the information upon which its proposal is based,
36and has available the express terms of the proposed action, pursuant
37to subdivision (b).

begin delete

38(17)

end delete

39begin insert(18)end insert A statement that if a public hearing is not scheduled, any
40interested person or his or her duly authorized representative may
P30   1request, no later than 15 days prior to the close of the written
2comment period, a public hearing pursuant to Section 11346.8.

begin delete

3(18)

end delete

4begin insert(19)end insert A statement indicating that the full text of a regulation
5changed pursuant to Section 11346.8 will be available for at least
615 days prior to the date on which the agency adopts, amends, or
7repeals the resulting regulation.

begin delete

8(19)

end delete

9begin insert(20)end insert A statement explaining how to obtain a copy of the final
10 statement of reasons once it has been prepared pursuant to
11subdivision (a) of Section 11346.9.

begin delete

12(20)

end delete

13begin insert(21)end insert If the agency maintains an Internet Web site or other similar
14forum for the electronic publication or distribution of written
15material, a statement explaining how materials published or
16distributed through that forum can be accessed.

begin delete

17(21)

end delete

18begin insert(22)end insert If the proposed regulation is subject to Section 11346.6, a
19statement that the agency shall provide, upon request, a description
20of the proposed changes included in the proposed action, in the
21manner provided by Section 11346.6, to accommodate a person
22with a visual or other disability for which effective communication
23is required under state or federal law and that providing the
24description of proposed changes may require extending the period
25of public comment for the proposed action.

26(b) The agency representative designated in paragraphbegin delete (14)end deletebegin insert (15)end insert
27 of subdivision (a) shall make available to the public upon request
28the express terms of the proposed action. The representative shall
29also make available to the public upon request the location of
30public records, including reports, documentation, and other
31materials, related to the proposed action. If the representative
32receives an inquiry regarding the proposed action that the
33representative cannot answer, the representative shall refer the
34inquiry to another person in the agency for a prompt response.

35(c) This section shall not be construed in any manner that results
36in the invalidation of a regulation because of the alleged inadequacy
37of the notice content or the summary or cost estimates, or the
38alleged inadequacy or inaccuracy of the housing cost estimates, if
39there has been substantial compliance with those requirements.

P31   1begin insert

begin insertSEC. 19.end insert  

end insert

begin insertSection 11349 of the end insertbegin insertGovernment Codeend insertbegin insert is amended
2to read:end insert

3

11349.  

The following definitions govern the interpretation of
4this chapter:

5(a) “Necessity” means the record of the rulemaking proceeding
6demonstrates by substantial evidence the need for a regulation to
7effectuate the purpose of the statute, court decision, or other
8provision of law that the regulation implements, interprets, or
9makes specific, taking into account the totality of the record. For
10purposes of this standard, evidence includes, but is not limited to,
11facts, studies, and expert opinion.

12(b) “Authority” means the provision of law which permits or
13obligates the agency to adopt, amend, or repeal a regulation.

14(c) “Clarity” means written or displayed so that the meaning of
15regulations will be easily understood by those persons directly
16affected by them.

17(d) “Consistency” means being in harmony with, and not in
18conflict with or contradictory to, existing statutes, court decisions,
19or other provisions of law.

20(e) “Reference” means the statute, court decision, or other
21provision of law which the agency implements, interprets, or makes
22specific by adopting, amending, or repealing a regulation.

23(f) “Nonduplication” means that a regulation does not serve the
24same purpose as a state or federal statute or another regulation.
25This standard requires that an agency proposing to amend or adopt
26a regulation must identify any state or federal statute or regulation
27which is overlapped or duplicated by the proposed regulation and
28justify any overlap or duplication. This standard is not intended
29to prohibit state agencies from printing relevant portions of
30enabling legislation in regulations when the duplication is necessary
31to satisfy the clarity standard in paragraph (3) of subdivision (a)
32of Section 11349.1. This standard is intended to prevent the
33indiscriminate incorporation of statutory language in a regulation.

begin insert

34
(g) “Competitive impact” means that the record of the
35rulemaking proceeding or other documentation demonstrates that
36the regulation is authorized by a clearly articulated and
37affirmatively expressed state law, that the regulation furthers the
38public protection mission of the state agency, and that the impact
39on competition is justified in light of the applicable regulatory
40rationale for the regulation.

end insert
P32   1begin insert

begin insertSEC. 20.end insert  

end insert

begin insertSection 11349.1 of the end insertbegin insertGovernment Codeend insertbegin insert is amended
2to read:end insert

3

11349.1.  

(a) The office shall review all regulations adopted,
4amended, or repealed pursuant to the procedure specified in Article
55 (commencing with Section 11346) and submitted to it for
6publication in the California Code of Regulations Supplement and
7for transmittal to the Secretary of State and make determinations
8using all of the following standards:

9(1) Necessity.

10(2) Authority.

11(3) Clarity.

12(4) Consistency.

13(5) Reference.

14(6) Nonduplication.

begin insert

15
(7) For those regulations submitted by a state board on which
16a controlling number of decisionmakers are active market
17participants in the market the board regulates, the office shall
18review for competitive impact.

end insert

19In reviewing regulations pursuant to this section, the office shall
20restrict its review to the regulation and the record of the rulemaking
21begin delete proceeding.end deletebegin insert except as directed in subdivision (h).end insert The office shall
22approve the regulation or order of repeal if it complies with the
23standards set forth in this section and with this chapter.

24(b) In reviewing proposed regulations for the criteria in
25subdivision (a), the office may consider the clarity of the proposed
26regulation in the context of related regulations already in existence.

27(c) The office shall adopt regulations governing the procedures
28it uses in reviewing regulations submitted to it. The regulations
29shall provide for an orderly review and shall specify the methods,
30standards, presumptions, and principles the office uses, and the
31limitations it observes, in reviewing regulations to establish
32compliance with the standards specified in subdivision (a). The
33regulations adopted by the office shall ensure that it does not
34substitute its judgment for that of the rulemaking agency as
35expressed in the substantive content of adopted regulations.

36(d) The office shall return any regulation subject to this chapter
37to the adopting agency if any of the following occur:

38(1) The adopting agency has not prepared the estimate required
39by paragraph (6) of subdivision (a) of Section 11346.5 and has not
P33   1included the data used and calculations made and the summary
2report of the estimate in the file of the rulemaking.

3(2) The agency has not complied with Section 11346.3.
4“Noncompliance” means that the agency failed to complete the
5economic impact assessment or standardized regulatory impact
6analysis required by Section 11346.3 or failed to include the
7assessment or analysis in the file of the rulemaking proceeding as
8required by Section 11347.3.

9(3) The adopting agency has prepared the estimate required by
10paragraph (6) of subdivision (a) of Section 11346.5, the estimate
11indicates that the regulation will result in a cost to local agencies
12or school districts that is required to be reimbursed under Part 7
13(commencing with Section 17500) of Division 4, and the adopting
14agency fails to do any of the following:

15(A) Cite an item in the Budget Act for the fiscal year in which
16the regulation will go into effect as the source from which the
17Controller may pay the claims of local agencies or school districts.

18(B) Cite an accompanying bill appropriating funds as the source
19from which the Controller may pay the claims of local agencies
20or school districts.

21(C) Attach a letter or other documentation from the Department
22of Finance which states that the Department of Finance has
23approved a request by the agency that funds be included in the
24Budget Bill for the next following fiscal year to reimburse local
25agencies or school districts for the costs mandated by the
26regulation.

27(D) Attach a letter or other documentation from the Department
28 of Finance which states that the Department of Finance has
29authorized the augmentation of the amount available for
30expenditure under the agency’s appropriation in the Budget Act
31which is for reimbursement pursuant to Part 7 (commencing with
32Section 17500) of Division 4 to local agencies or school districts
33from the unencumbered balances of other appropriations in the
34Budget Act and that this augmentation is sufficient to reimburse
35local agencies or school districts for their costs mandated by the
36regulation.

37(4) The proposed regulation conflicts with an existing state
38regulation and the agency has not identified the manner in which
39the conflict may be resolved.

P34   1(5) The agency did not make the alternatives determination as
2required by paragraph (4) of subdivision (a) of Section 11346.9.

begin insert

3
(6) The office decides that the record of the rulemaking
4proceeding or other documentation for the proposed regulation
5does not demonstrate that the regulation is authorized by a clearly
6articulated and affirmatively expressed state law, that the
7regulation does not further the public protection mission of the
8state agency, or that the impact on competition is not justified in
9light of the applicable regulatory rationale for the regulation.

end insert

10(e) The office shall notify the Department of Finance of all
11regulations returned pursuant to subdivision (d).

12(f) The office shall return a rulemaking file to the submitting
13agency if the file does not comply with subdivisions (a) and (b)
14of Section 11347.3. Within three state working days of the receipt
15of a rulemaking file, the office shall notify the submitting agency
16of any deficiency identified. If no notice of deficiency is mailed
17to the adopting agency within that time, a rulemaking file shall be
18deemed submitted as of the date of its original receipt by the office.
19A rulemaking file shall not be deemed submitted until each
20deficiency identified under this subdivision has been corrected.

21(g) Notwithstanding any other law, return of the regulation to
22the adopting agency by the office pursuant to this section is the
23exclusive remedy for a failure to comply with subdivision (c) of
24Section 11346.3 or paragraph (10) of subdivision (a) of Section
2511346.5.

begin insert

26
(h) The office may designate, employ, or contract for the services
27of independent antitrust or applicable economic experts when
28reviewing proposed regulations for competitive impact. When
29 reviewing a regulation for competitive impact, the office shall do
30all of the following:

end insert
begin insert

31
(1) If the Director of Consumer Affairs issued a written decision
32pursuant to subdivision (c) of Section 109 of the Business and
33Professions Code, the office shall review and consider the decision
34and all supporting documentation in the rulemaking file.

end insert
begin insert

35
(2) Consider whether the anticompetitive effects of the proposed
36regulation are clearly outweighed by the public policy merits.

end insert
begin insert

37
(3) Provide a written opinion setting forth the office’s findings
38and substantive conclusions under paragraph (2), including, but
39not limited to, whether rejection or modification of the proposed
40regulation is necessary to ensure that restraints of trade are related
P35   1to and advance the public policy underlying the applicable
2regulatory rationale.

end insert
3begin insert

begin insertSEC. 21.end insert  

end insert
begin insert

No reimbursement is required by this act pursuant
4to Section 6 of Article XIII B of the California Constitution because
5the only costs that may be incurred by a local agency or school
6district will be incurred because this act creates a new crime or
7infraction, eliminates a crime or infraction, or changes the penalty
8for a crime or infraction, within the meaning of Section 17556 of
9the Government Code, or changes the definition of a crime within
10the meaning of Section 6 of Article XIII B of the California
11Constitution.

end insert


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