BILL NUMBER: AB 2889 CHAPTERED 09/30/00 CHAPTER 1055 FILED WITH SECRETARY OF STATE SEPTEMBER 30, 2000 APPROVED BY GOVERNOR SEPTEMBER 30, 2000 PASSED THE ASSEMBLY AUGUST 22, 2000 PASSED THE SENATE AUGUST 18, 2000 AMENDED IN SENATE AUGUST 8, 2000 AMENDED IN SENATE MAY 30, 2000 AMENDED IN ASSEMBLY APRIL 10, 2000 INTRODUCED BY Committee on Consumer Protection, Governmental Efficiency and Economic Development (Davis (Chair), Leach (Vice Chair), Correa, Cox, Lempert, Machado, and Wesson) MARCH 9, 2000 An act to amend Sections 120, 149, 5018, 5150, 19870, 19880, and 22258 of the Business and Professions Code, to amend Section 1365 of the Civil Code, to amend Section 14202 of the Corporations Code, to amend Sections 14504.2, 14505, 33420, 41020, 41020.5, and 84040 of the Education Code, to amend Section 22056 of the Financial Code, to amend Sections 705, 58937, 59947, 64309, 64696, 76906, and 78558 of the Food and Agricultural Code, to amend Sections 7504, 7591, 8899.10, 8899.12, 8899.16, 8899.21, 11126, 14998.4, 15311, 15363.6, 26509, 26915, 26945, 27000.7, 53131, and 68112 of, and to amend the heading of Chapter 1 (commencing with Section 15310) of Part 6.7 of Division 3 of Title 2 of, the Government Code, to amend Sections 11998.1, 33492.71, 34053, 34327.6, 41503.6, 41865, 50887.5, and 124850 of the Health and Safety Code, and to amend Sections 10821.5 and 12389 of the Insurance Code, to amend Sections 25696, 31306, 42021, and 42022 of the Public Resources Code, and to amend Sections 10525, 12112, 12151, 15076, 15076.5, and 15077 of the Unemployment Insurance Code, relating to state government, and declaring the urgency thereof, to take effect immediately. LEGISLATIVE COUNSEL'S DIGEST AB 2889, Committee on Consumer Protection, Governmental Efficiency and Economic Development. State government: Trade and Commerce Agency and professions and vocations. Existing law established the Trade and Commerce Agency in state government as the successor to the Department of Commerce and provides that the work of the agency is to be divided into specified offices. This bill would make conforming changes to reflect that the Trade and Commerce Agency is the successor to the Department of Commerce. Existing law establishes the California Board of Accountancy in the Department of Consumer Affairs for the purpose of regulating public accountants. This bill would make conforming changes to correct references in various provisions of existing law to reflect the establishment of this board. This bill would incorporate additional changes in Section 149 of the Business and Professions Code proposed by SB 1863, to become operative only if both bills are enacted, as specified, and become operative on or before January 1, 2001, and this bill is enacted last. This bill would incorporate additional changes in Section 84040 of the Education Code proposed by AB 2388, to become operative only if both bills are enacted, as specified, and become operative on or before January 1, 2001, and this bill is enacted last. This bill would incorporate additional changes in Section 41865 of the Health and Safety Code proposed by AB 2939, to become operative only if both bills are enacted, as specified, and become operative on or before January 1, 2001, and this bill is enacted last. This bill would declare that it is to take effect immediately as an urgency statute. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 120 of the Business and Professions Code is amended to read: 120. (a) Subdivision (a) of Section 119 shall not apply to a surviving spouse having in his or her possession or displaying a deceased spouse's canceled certified public accountant certificate or canceled public accountant certificate that has been canceled by official action of the California Board of Accountancy. (b) Notwithstanding Section 119, any person who has received a certificate of certified public accountant or a certificate of public accountant from the board may possess and may display the certificate received unless the person's certificate, permit, or registration has been suspended or revoked. SEC. 2. Section 149 of the Business and Professions Code is amended to read: 149. (a) If, upon investigation, an agency designated in subdivision (e) has probable cause to believe that a person is advertising in a telephone directory with respect to the offering or performance of services, without being properly licensed by or registered with the agency to offer or perform those services, the agency may issue a citation under Section 148 containing an order of correction that requires the violator to do both of the following: (1) Cease the unlawful advertising. (2) Notify the telephone company furnishing services to the violator to disconnect the telephone service furnished to any telephone number contained in the unlawful advertising. (b) This action is stayed if the person to whom a citation is issued under subdivision (a) notifies the agency in writing that he or she intends to contest the citation. The agency shall afford an opportunity for a hearing, as specified in Section 125.9. (c) If the person to whom a citation and order of correction is issued under subdivision (a) fails to comply with the order of correction after that order is final, the agency shall inform the Public Utilities Commission of the violation and the Public Utilities Commission shall require the telephone corporation furnishing services to that person to disconnect the telephone service furnished to any telephone number contained in the unlawful advertising. (d) The good faith compliance by a telephone corporation with an order of the Public Utilities Commission to terminate service issued pursuant to this section shall constitute a complete defense to any civil or criminal action brought against the telephone corporation arising from the termination of service. (e) Subdivision (a) shall apply to the following boards, bureaus, committees, commissions, or programs: (1) The State Board of Barbering and Cosmetology. (2) The Funeral Directors and Embalmers Program. (3) The Veterinary Medical Board. (4) The Hearing Aid Dispensers Advisory Commission. (5) The State Board of Landscape Architects. (6) The California Board of Podiatric Medicine. (7) The Respiratory Care Board of California. (8) The Bureau of Home Furnishings and Thermal Insulation. (9) The Bureau of Security and Investigative Services. (10) The Bureau of Electronic and Appliance Repair. (11) The Bureau of Automotive Repair. (12) The Tax Preparers Program. (13) The California Board of Architectural Examiners. (14) The Speech-Language Pathology and Audiology Board. (15) The Board for Professional Engineers and Land Surveyors. (16) The Board of Behavioral Sciences. (17) The State Board of Registration for Geologists and Geophysicists. (18) The Structural Pest Control Board. (19) The Acupuncture Board. (20) The Board of Psychology. (21) The California Board of Accountancy. SEC. 2.5. Section 149 of the Business and Professions Code is amended to read: 149. (a) If, upon investigation, an agency designated in subdivision (e) has probable cause to believe that a person is advertising in a telephone directory with respect to the offering or performance of services, without being properly licensed by or registered with the agency to offer or perform those services, the agency may issue a citation under Section 148 containing an order of correction that requires the violator to do both of the following: (1) Cease the unlawful advertising. (2) Notify the telephone company furnishing services to the violator to disconnect the telephone service furnished to any telephone number contained in the unlawful advertising. (b) This action is stayed if the person to whom a citation is issued under subdivision (a) notifies the agency in writing that he or she intends to contest the citation. The agency shall afford an opportunity for a hearing, as specified in Section 125.9. (c) If the person to whom a citation and order of correction is issued under subdivision (a) fails to comply with the order of correction after that order is final, the agency shall inform the Public Utilities Commission of the violation and the Public Utilities Commission shall require the telephone corporation furnishing services to that person to disconnect the telephone service furnished to any telephone number contained in the unlawful advertising. (d) The good faith compliance by a telephone corporation with an order of the Public Utilities Commission to terminate service issued pursuant to this section shall constitute a complete defense to any civil or criminal action brought against the telephone corporation arising from the termination of service. (e) Subdivision (a) shall apply to the following boards, bureaus, committees, commissions, or programs: (1) The Bureau of Barbering and Cosmetology. (2) The Funeral Directors and Embalmers Program. (3) The Veterinary Medical Board. (4) The Hearing Aid Dispensers Advisory Commission. (5) The Landscape Architects Technical Committee. (6) The California Board of Podiatric Medicine. (7) The Respiratory Care Board of California. (8) The Bureau of Home Furnishings and Thermal Insulation. (9) The Bureau of Security and Investigative Services. (10) The Bureau of Electronic and Appliance Repair. (11) The Bureau of Automotive Repair. (12) The Tax Preparers Program. (13) The California Architects Board. (14) The Speech-Language Pathology and Audiology Board. (15) The Board for Professional Engineers and Land Surveyors. (16) The Board of Behavioral Sciences. (17) The State Board for Geologists and Geophysicists. (18) The Structural Pest Control Board. (19) The Acupuncture Board. (20) The Board of Psychology. (21) The California Board of Accountancy. SEC. 3. Section 5018 of the Business and Professions Code is amended to read: 5018. The board may by regulation, prescribe, amend, or repeal rules of professional conduct appropriate to the establishment and maintenance of a high standard of integrity and dignity in the profession. In addition to the requirements contained in Chapter 4 (commencing with Section 11370) of Part 1 of Division 3 of Title 2 of the Government Code, a copy of the rules shall be mailed to every holder of a license under this chapter at least 30 days prior to a date named for a public hearing held for the purpose of receiving and considering objections to any of the proposed provisions. Every licensee of the California Board of Accountancy in this state shall be governed and controlled by the rules and standards adopted by the board. SEC. 4. Section 5150 of the Business and Professions Code is amended to read: 5150. An accountancy corporation is a corporation which is registered with the California Board of Accountancy and has a currently effective certificate of registration from the board pursuant to the Moscone-Knox Professional Corporation Act, as contained in Part 4 (commencing with Section 13400) of Division 3 of Title 1 of the Corporations Code, and this article. Subject to all applicable statutes, rules and regulations, an accountancy corporation is entitled to practice accountancy. With respect to an accountancy corporation, the governmental agency referred to in the Moscone-Knox Professional Corporation Act is the California Board of Accountancy. SEC. 5. Section 19870 of the Business and Professions Code is amended to read: 19870. In addition to the requirements of Section 19841, in order to be eligible to receive a gambling license as the owner of a gambling enterprise, a corporation shall comply with all of the following requirements: (a) Maintain an office of the corporation in the gambling establishment. (b) Comply with all of the requirements of the laws of this state pertaining to corporations. (c) Maintain, in the corporation's principal office in California or in the gambling establishment, a ledger that meets both of the following conditions: (1) At all times reflects the ownership of record of every class of security issued by the corporation. (2) Is available for inspection by the division at all reasonable times without notice. (d) Register as a corporation with the division and supply the following supplemental information to the division: (1) The organization, financial structure, and nature of the business to be operated, including the names, personal and criminal history, and fingerprints of all officers, directors, and key employees, and the names, addresses, and number of shares held by all stockholders of record. (2) The rights and privileges acquired by the holders of different classes of authorized securities, including debentures. (3) The terms on which securities are to be offered. (4) The terms and conditions on all outstanding loans, mortgages, trust deeds, pledges, or any other indebtedness or security device. (5) The extent of the equity security holdings in the corporation of all officers, directors, and underwriters, and their remuneration as compensation for services, in the form of salary, wages, fees, or otherwise. (6) The amount of remuneration to persons other than directors and officers in excess of fifty thousand dollars ($50,000) per annum. (7) Bonus and profit-sharing arrangements. (8) Management and service contracts. (9) Options existing, or to be created, in respect of their securities or other interests. (10) Financial statements for at least three fiscal years preceding the year of registration, or, if the corporation has not been in existence for a period of three years, financial statements from the date of its formation. All financial statements shall be prepared in accordance with generally accepted accounting principles and audited by a licensee of the California Board of Accountancy. (11) Any further financial data that the division, with the approval of the board, may deem necessary or appropriate for the protection of the state. (12) An annual profit-and-loss statement and an annual balance sheet, and a copy of its annual federal income tax return, within 30 calendar days after that return is filed with the Internal Revenue Service. SEC. 6. Section 19880 of the Business and Professions Code is amended to read: 19880. In addition to the requirements of Section 19841, in order to be eligible to receive a gambling license to own a gambling enterprise, a limited partnership shall comply with all of the following requirements: (a) Be formed under the laws of this state. (b) Maintain an office of the limited partnership in the gambling establishment. (c) Comply with all of the requirements of the laws of this state pertaining to limited partnerships. (d) Maintain a ledger in the principal office of the limited partnership in California that shall meet both of the following conditions: (1) At all times reflects the ownership of all interests in the limited partnership. (2) Be available for inspection by the division at all reasonable times without notice. (e) Register with the division and supply the following supplemental information to the division: (1) The organization, financial structure, and nature of the business to be operated, including the names, personal history, and fingerprints of all general partners and key employees, and the name, address, and interest of each limited partner. (2) The rights, privileges, and relative priorities of limited partners as to the return of contributions to capital, and the right to receive income. (3) The terms on which limited partnership interests are to be offered. (4) The terms and conditions on all outstanding loans, mortgages, trust deeds, pledges, or any other indebtedness or security device. (5) The extent of the holding in the limited partnership of all underwriters, and their remuneration as compensation for services, in the form of salary, wages, fees, or otherwise. (6) The remuneration to persons other than general partners in excess of fifty thousand dollars ($50,000) per annum. (7) Bonus and profit-sharing arrangements. (8) Management and service contracts. (9) Options existing or to be created. (10) Financial statements for at least three fiscal years preceding the year of registration, or, if the limited partnership has not been in existence for a period of three years, financial statements from the date of its formation. All financial statements shall be prepared in accordance with generally accepted accounting principles and audited by a licensee of the California Board of Accountancy in accordance with generally accepted auditing standards. (11) Any further financial data that the division reasonably deems necessary or appropriate for the protection of the state. (12) An annual profit and loss statement and an annual balance sheet, and a copy of its annual federal income tax return, within 30 calendar days after the return is filed with the Internal Revenue Service. SEC. 7. Section 22258 of the Business and Professions Code is amended to read: 22258. The following persons are exempt from the requirements of this title: (a) A person with a current and valid license issued by the California Board of Accountancy and his or her employees while functioning within the scope of their employment. (b) A person who is an active member of the State Bar of California and his or her employees while functioning within the scope of their employment. (c) An employee of any trust company or trust business as defined in Chapter 1 (commencing with Section 99) of Division 1 of the Financial Code while functioning within the scope of his or her employment. (d) A financial institution regulated by the state or federal government, and employees thereof, insofar as the activities of the employees are related to their employment and the activities of the financial institution with respect to tax preparation are subject to federal or state examination or oversight. (e) A person who is enrolled to practice before the Internal Revenue Service pursuant to Subpart A (commencing with Section 10.1) of Part 10 of Title 31 of the Code of Federal Regulations, and his or her employees while functioning within the scope of his or her employment. SEC. 8. Section 1365 of the Civil Code is amended to read: 1365. Unless the governing documents impose more stringent standards, the association shall prepare and distribute to all of its members the following documents: (a) A pro forma operating budget, which shall include all of the following: (1) The estimated revenue and expenses on an accrual basis. (2) A summary of the association's reserves based upon the most recent review or study conducted pursuant to Section 1365.5, which shall be printed in bold type and include all of the following: (A) The current estimated replacement cost, estimated remaining life, and estimated useful life of each major component. (B) As of the end of the fiscal year for which the study is prepared: (i) The current estimate of the amount of cash reserves necessary to repair, replace, restore, or maintain the major components. (ii) The current amount of accumulated cash reserves actually set aside to repair, replace, restore, or maintain major components. (iii) If applicable, the amount of funds received from either a compensatory damage award or settlement to an association from any person or entity for injuries to property, real or personal, arising out of any construction or design defects, and the expenditure or disposition of funds, including the amounts expended for the direct and indirect costs of repair of construction or design defects. These amounts shall be reported at the end of the fiscal year for which the study is prepared as separate line items under cash reserves pursuant to clause (ii). In lieu of complying with the requirements set forth in this clause, an association that is obligated to issue a review of their financial statement pursuant to subdivision (b) may include in the review a statement containing all of the information required by this clause. (C) The percentage that the amount determined for purposes of clause (ii) subparagraph (B) equals the amount determined for purposes of clause (i) of subparagraph (B). (3) A statement as to whether the board of directors of the association has determined or anticipates that the levy of one or more special assessments will be required to repair, replace, or restore any major component or to provide adequate reserves therefor. (4) A general statement addressing the procedures used for the calculation and establishment of those reserves to defray the future repair, replacement, or additions to those major components that the association is obligated to maintain. The summary of the association's reserves disclosed pursuant to paragraph (2) shall not be admissible in evidence to show improper financial management of an association, provided that other relevant and competent evidence of the financial condition of the association is not made inadmissible by this provision. A copy of the operating budget shall be annually distributed not less than 45 days nor more than 60 days prior to the beginning of the association's fiscal year. (b) A review of the financial statement of the association shall be prepared in accordance with generally accepted accounting principles by a licensee of the California Board of Accountancy for any fiscal year in which the gross income to the association exceeds seventy-five thousand dollars ($75,000). A copy of the review of the financial statement shall be distributed within 120 days after the close of each fiscal year. (c) In lieu of the distribution of the pro forma operating budget required by subdivision (a), the board of directors may elect to distribute a summary of the pro forma operating budget to all of its members with a written notice that the pro forma operating budget is available at the business office of the association or at another suitable location within the boundaries of the development, and that copies will be provided upon request and at the expense of the association. If any member requests that a copy of the pro forma operating budget required by subdivision (a) be mailed to the member, the association shall provide the copy to the member by first-class United States mail at the expense of the association and delivered within five days. The written notice that is distributed to each of the association members shall be in at least 10-point boldface type on the front page of the summary of the budget. (d) A statement describing the association's policies and practices in enforcing lien rights or other legal remedies for default in payment of its assessments against its members shall be annually delivered to the members during the 60-day period immediately preceding the beginning of the association's fiscal year. (e) (1) A summary of the association's property, general liability, and earthquake and flood insurance policies, which shall be distributed within 60 days preceding the beginning of the association's fiscal year, that includes all of the following information about each policy: (A) The name of the insurer. (B) The type of insurance. (C) The policy limits of the insurance. (D) The amount of deductibles, if any. (2) The association shall, as soon as reasonably practicable, notify its members by first-class mail if any of the policies described in paragraph (1) have lapsed, been canceled, and are not immediately renewed, restored, or replaced, or if there is a significant change, such as a reduction in coverage or limits or an increase in the deductible, as to any of those policies. If the association receives any notice of nonrenewal of a policy described in paragraph (1), the association shall immediately notify its members if replacement coverage will not be in effect by the date the existing coverage will lapse. (3) To the extent that any of the information required to be disclosed pursuant to paragraph (1) is specified in the insurance policy declaration page, the association may meet its obligation to disclose that information by making copies of that page and distributing it to all of its members. (4) The summary distributed pursuant to paragraph (1) shall contain, in at least 10-point boldface type, the following statement: "This summary of the association's policies of insurance provides only certain information, as required by subdivision (e) of Section 1365 of the Civil Code, and should not be considered a substitute for the complete policy terms and conditions contained in the actual policies of insurance. Any association member may, upon request and provision of reasonable notice, review the association's insurance policies and, upon request and payment of reasonable duplication charges, obtain copies of those policies. Although the association maintains the policies of insurance specified in this summary, the association's policies of insurance may not cover your property, including personal property or, real property improvements to or around your dwelling, or personal injuries or other losses that occur within or around your dwelling. Even if a loss is covered, you may nevertheless be responsible for paying all or a portion of any deductible that applies. Association members should consult with their individual insurance broker or agent for appropriate additional coverage." SEC. 9. Section 14202 of the Corporations Code is amended to read: 14202. The Trade and Commerce Agency shall assist other public agencies, nonprofit corporations, or foundations in the development and facilitation of employee-owned businesses. In support of this activity the Trade and Commerce Agency shall do each of the following: (a) Compile, organize, and make available to the public a library of resources on the subject of employee ownership. (b) Provide public education on the beneficial aspects of employee-owned businesses and employee participation in business management. (c) Promote the research of issues relative to the innovative utilization of employee ownership and participation for the purpose of local economic development. (d) Provide or facilitate the provision of technical assistance on the establishment and successful management of employee-owned businesses. (e) Promote and participate in seminars, workshops, and conferences to increase awareness especially of professional, private, and public sectors important to economic development and business assistance, of the benefits found to be common to employee-owned businesses. SEC. 10. Section 14504.2 of the Education Code is amended to read: 14504.2. (a) The Controller may perform quality control reviews of audit working papers to determine whether audits are performed in conformity with subdivision (a) of Section 14503. The Department of Finance may refer an independent auditor of a school district to the Controller for a review pursuant to this section if the Department of Finance finds that an audit of a school district was conducted in a manner that may constitute noncompliance with subdivision (a) of Section 14503. The Controller shall communicate the results of his or her reviews to the Department of Finance, the independent auditor, and the school district or office of the county superintendent of schools for which the audit was performed, and shall review his or her findings with the independent auditor. (b) Prior to the performance of any quality control reviews, the Controller shall develop and publish guidelines and standards for those reviews. Pursuant to the development of those guidelines and standards, the Controller shall provide opportunity for public comment. (c) If a school district has received an emergency apportionment pursuant to Article 2 (commencing with Section 41320) or Article 2.5 (commencing with Section 41325) of Chapter 3 of Part 24, the Controller shall conduct a quality control review of the audit working papers of the independent auditor who performed the audits for that school district for the prior three fiscal years. If the quality control review of the Controller indicates that the audit was conducted in a manner that may constitute unprofessional conduct as defined pursuant to Section 5100 of the Business and Professions Code, including, but not limited to, gross negligence resulting in a material misstatement in the audit, the Controller shall refer the case to the California Board of Accountancy. If the California Board of Accountancy finds that the independent auditor conducted an audit in an unprofessional manner, the independent auditor is prohibited from performing any school district audit for a period of three years, in addition to any other penalties that the California Board of Accountancy may impose. (d) In any matter that is referred to the California Board of Accountancy under subdivision (c), the Controller may suspend the independent auditor from performing any school district audits pending final disposition of the matter by the California Board of Accountancy if the Controller gives the independent auditor notice and an opportunity to respond to that suspension. The independent auditor shall be given credit for any period of suspension if the California Board of Accountancy prohibits the independent auditor from performing audits of the school district under subdivision (c). In no event may the Controller suspend an independent auditor under this subdivision for a period of longer than three years. (e) The county superintendent of schools or the county board of education may refer an independent auditor of a school district to the California Board of Accountancy for action pursuant to subdivision (c) if an audit of a school district was conducted in a manner that may constitute unprofessional conduct as defined by Section 5100 of the Business and Professions Code, including, but not limited to, gross negligence resulting in a material misstatement in the audit. SEC. 11. Section 14505 of the Education Code is amended to read: 14505. The governing board of each school district and each office of the county superintendent of schools shall include the following two provisions in their contracts for audits: (a) A provision to withhold 10 percent of the audit fee until the Controller certifies that the audit report conforms to the reporting provisions of subdivision (a) of Section 14503. (b) A provision to withhold 50 percent of the audit fee for any subsequent year of a multiyear contract if the prior year's audit report was not certified as conforming to reporting provisions of subdivision (a) of Section 14503. This provision shall include a statement that a multiyear contract will be null and void if a firm or individual is declared ineligible pursuant to subdivision (c) of Section 41020.5. The amount withheld is not payable unless payment is ordered by the California Board of Accountancy or the audit report for that subsequent year is certified by the Controller as conforming to reporting provisions of subdivision (a) of Section 14503. (c) Within 30 days from the date of receipt of written notification that the Controller refuses to certify an audit report as conforming to reporting provisions of subdivision (a) of Section 14503, an auditor or audit firm having a portion of an audit fee withheld pursuant to these provisions may file an appeal in writing with the California Board of Accountancy. The board shall complete an investigation of the appeal within 90 days of the filing date and, on the basis of the investigation, do either of the following: (1) Order the Controller to provide notification that the audit report conforms to reporting provisions of subdivision (a) of Section 14503. (2) Schedule the appeal for a hearing, in which case the final action on the appeal shall be completed by the board within one year from the date of filing the appeal. (d) If the board orders the Controller to provide notification that the audit report conforms to reporting provisions of subdivision (a) of Section 14503, the Controller shall notify the contracting school district which shall then release the portion of the audit fee being withheld in accordance with this section. SEC. 12. Section 33420 of the Education Code is amended to read: 33420. (a) The Superintendent of Public Instruction, in cooperation with the Department of Finance and the State Auditor, shall, on or before July 1, 1980, provide for a plan for independent audits of state and federal funds allocated to private agencies that are under contract with the State Department of Education for the provision of educational services. For the purpose of this article, "educational services" includes, but is not limited to, child nutrition and child development services. To the maximum extent possible, the plan shall conform to audit procedures pursuant to Section 41020.5. (b) Effective July 1, 1980, the State Department of Education, as a condition to any contract with a private agency for the provision of educational services, shall require a periodic audit of state and federal funds to be conducted by departmental staff auditors or a certified public accountant or public accountant who is licensed by the California Board of Accountancy. For child development services, the audit shall include all funds deposited in the child development fund. For all other educational services, the audit shall be limited to those state and federal funds accruing to the private agency as a result of its contract with the State Department of Education. (c) If in the course of those audits of a private agency, an audit exception is reported by the certified public accounting firm in excess of a material amount as determined by the Superintendent of Public Instruction, the Superintendent of Public Instruction shall, upon final determination by the superintendent of the amount of the audit exception, collect that audit exception and redistribute the amount collected to the same class of program, or withhold the amount of the audit exception from the next payment to the agency in which the audit exception was discovered. (d) The State Department of Education shall establish a schedule for audits that meets federal regulations. (e) The State Department of Education may exempt from the provisions of this section those agencies for which, in the department's estimation, the cost of an audit would be inordinate in relation to the level of funding received by the private agency for the educational services provided. SEC. 13. Section 41020 of the Education Code is amended to read: 41020. (a) It is the intent of the Legislature to encourage sound fiscal management practices among school districts for the most efficient and effective use of public funds for the education of children in California by strengthening fiscal accountability at the district, county, and state levels. (b) Not later than the first day of May of each fiscal year each county superintendent of schools shall provide for an audit of all funds under his or her jurisdiction and control and the governing board of each school district shall either provide for an audit of the books and accounts of the school district, including an audit of school district income and expenditures by source of funds, or make arrangements with the county superintendent of schools having jurisdiction over the school district to provide for that auditing. In the event the governing board of a school district has not provided for an audit of the books and accounts of the district by April 1, the county superintendent of schools having jurisdiction over the district shall provide for the audit. (c) Each audit conducted in accordance with this section shall include all funds of the school district including the student body and cafeteria funds and accounts and any other funds under the control or jurisdiction of the school district and funds of regional occupational centers and programs maintained by the county superintendent of schools, a school district, or pursuant to a joint powers agreement. Each audit shall also include an audit of attendance procedures. (d) All audit reports for the 1988-89 fiscal year, and for each subsequent fiscal year, shall be developed and reported using a format established by the Controller after consultation with the Superintendent of Public Instruction. (e) (1) The cost of the audits provided for by the county superintendent of schools shall be paid from the county school service fund and the county superintendent of schools shall transfer the pro rata share of the cost chargeable to each district from district funds. (2) The cost of the audit provided for by a governing board shall be paid from school district funds. The audit of the funds under the jurisdiction and control of the county superintendent of schools shall be paid from the county school service fund. (f) The audits shall be made by a certified public accountant or a public accountant, licensed by the California Board of Accountancy. (g) (1) The auditor's report shall include each of the following: (A) A statement that the audit was conducted pursuant to standards and procedures developed in accordance with Chapter 3 (commencing with Section 14500) of Part 9 of Division 1 of Title 1. (B) A summary of audit exceptions and management improvement recommendations. (2) To the extent possible, a description of correction or plan of correction shall be incorporated in the audit report, describing the specific actions that are planned to be taken, or that have been taken, to correct the problem identified by the auditor. The descriptions of specific actions to be taken or that have been taken shall not solely consist of general comments such as "will implement," "accepted the recommendation," or "will discuss at a later date." (h) Not later than December 15, a report of each audit for the preceding fiscal year shall be filed with the county superintendent of schools of the county in which the school district is located, the State Department of Education, and the Controller. The Superintendent of Public Instruction shall make any adjustments necessary in future apportionments of all state funds, to correct any audit exceptions revealed by such audit reports. (i) Commencing with the 1993-94 audit of school districts pursuant to this section, each county superintendent of schools shall be responsible for reviewing the audit exceptions contained in an audit of a school district under his or her jurisdiction related to attendance, inventory of equipment, internal control, and any miscellaneous items, and determining whether the exceptions have been either corrected or an acceptable plan of correction has been developed. (j) Upon submission of the final audit report to the governing board of each school district and subsequent receipt of the audit by the county superintendent of schools having jurisdiction over the school district, the county office of education shall do all of the following: (1) Review audit exceptions related to attendance, inventory of equipment, internal control, and other miscellaneous exceptions. Attendance exceptions or issues shall include, but not be limited to, those related to revenue limits, adult education, and independent study. (2) If a description of the correction or plan of correction has not been provided as part of the audit required by this section, then the county superintendent of schools shall notify the school district and request the governing board of the school district to provide to the county superintendent of schools a description of the corrections or plan of correction by March 15. (3) Review the description of correction or plan of correction and determine its adequacy. If the description of the correction or plan of correction is not adequate, the county superintendent of schools shall require the school district to resubmit that portion of its response that is inadequate. (k) Each county superintendent of schools shall certify to the Superintendent of Public Instruction, by May 15, that his or her staff has reviewed all audits of school districts under his or her jurisdiction for the prior fiscal year, that all exceptions that the county superintendent was required to review were reviewed, and that all of those exceptions, except as otherwise noted in the certification, have been corrected by the school district or an acceptable plan of correction has been submitted to the county superintendent of schools. In addition, the county superintendent shall identify by school district, any attendance-related audit exception that had a fiscal impact on state funds, and require the school district to which the attendance-related audit exception was directed to submit the appropriate forms for processing by the Superintendent of Public Instruction. (l) In the audit of a school district for a subsequent year, the auditor shall review the correction or plan or plans of correction submitted by the school district to determine if the exceptions have been resolved. If not, then the auditor shall immediately notify the appropriate county office of education and the State Department of Education and restate the exception in the audit report. After receiving that notification, the State Department of Education shall either consult with the school district to resolve the exception or require the county superintendent of schools to follow up with the school district. (m) (1) The Superintendent of Public Instruction shall be responsible for assuring that school districts have either corrected or developed a plan of correction for any or all of the following: (A) All federal and state compliance audit exceptions identified in the audit. (B) Any exceptions that the county superintendent certifies as of May 15 have not been corrected. (C) Any repeat audit exceptions that are not assigned to a county superintendent to correct. (2) In addition, the Superintendent of Public Instruction shall be responsible for assuring that county superintendents of schools and county boards of education that serve as the governing board of a school district either correct all audit exceptions identified in the audits of county superintendents of schools and of the school district for which the county board of education serves as the governing board or develop an acceptable plan of correction for those exceptions. (n) In order to facilitate the correction of the exceptions identified by the audits issued pursuant to this section, commencing with 1994-95 audits pursuant to this section, the Controller shall require auditors to categorize audit exceptions in the audit report in a manner that will make it clear to both the county superintendent of schools and the Superintendent of Public Instruction which exceptions they are responsible for assuring the correction of by a school district. In addition, the Controller annually shall select a sampling of county superintendents of schools and perform a followup of the audit resolution process of those county superintendents of schools and report the results of that followup to the Superintendent of Public Instruction and the county superintendents of schools that were reviewed. (o) The county superintendent of schools shall adjust the future local property tax requirements to correct audit exceptions relating to school district tax rates and tax revenues. (p) If a governing board or county superintendent of schools fails or is unable to make satisfactory arrangements for audit pursuant to this section, the Controller shall make arrangements for the audit and the cost of the audit shall be paid from school district funds or the county school service fund, as the case may be. (q) Audits of regional occupational centers and programs are subject to the provisions of this section. (r) Nothing in this section shall be construed to authorize examination into or report on the curriculum used or provided for in any school district. SEC. 14. Section 41020.5 of the Education Code is amended to read: 41020.5. (a) Whenever the Controller determines by two consecutive quality control reviews pursuant to Section 14504.2 that audits performed by a certified public accountant or public accountant under Section 41020 were not performed in substantial conformity with provisions of the audit guide, or that the audit reports, including amended reports, submitted by February 15 following the close of the fiscal year audited, for two consecutive years do not conform to provisions of the audit guide as required by Section 14504, the Controller shall notify in writing the certified public accountant or public accountant and the California Board of Accountancy. If the certified public accountant or public accountant does not file an appeal in writing with the California Board of Accountancy within 30 calendar days after receipt of the Controller's notification, the Controller's determination under this section shall be final. (b) If an appeal is filed with the California Board of Accountancy, the board shall complete an investigation of the appeal within 90 days of the filing date. On the basis of the investigation, the board may do either of the following: (1) Find that the Controller's determination should not be upheld and has no effect. (2) Schedule the appeal for a hearing, in which case, the final action on the appeal shall be completed by the board within one year from the date of filing the appeal. (c) If the Controller's determination under subdivision (a) becomes final, the certified public accountant or public accountant shall be ineligible to conduct audits under Section 41020 for a period of three years, or, in the event of an appeal, for any period, and subject to the conditions, that may be ordered by the California Board of Accountancy. Not later than the first day of March of each year, the Controller shall notify each school district and county office of education of those certified public accountants or public accountants determined to be ineligible under this section. School districts and county offices of education shall not use the audit services of a certified public accountant or public accountant ineligible under this section. For the purposes of this section, the term "certified public accountant or public accountant" shall include any person or firm entering into a contract to conduct an audit under Section 41020. This section shall not preclude the California Board of Accountancy from taking any disciplinary action it deems appropriate under other provisions of law. SEC. 15. Section 84040 of the Education Code is amended to read: 84040. (a) It is the intent of the Legislature to encourage sound fiscal management practices among community college districts for the most efficient and effective use of public funds for the education of community college students by strengthening fiscal accountability at the district and state levels. (b) The governing board of each community college district shall provide for an annual audit of all funds, books, and accounts of the district in accordance with regulations of the board of governors. The audit shall be made by certified public accountants licensed by the California Board of Accountancy. In the event the governing board of a community college district fails to provide for an audit, the board of governors shall provide for an audit, and if the board of governors fails or is unable to make satisfactory arrangements for such an audit, the Department of Finance shall make arrangements for the audit. The cost of any audit described above shall be paid from district funds. (c) The board of governors shall adopt criteria and standards for periodic assessment of the fiscal condition of community college districts, and these regulations regarding the review and improvement of district fiscal conditions as necessary to encourage sound fiscal management practices. In so doing: (1) The governing board of a community college district, as required by regulations of the board of governors, shall periodically report information to the board of governors regarding the fiscal condition of the district. (2) The board of governors, by regulation, shall develop standards for district maintenance of sound fiscal conditions. The regulations shall authorize a board comprehensive management review of any community college district which, after assessing itself or being assessed in accordance with board criteria and standards, is shown to be experiencing fiscal difficulty. On the basis of the findings of the management review, the board of governors may recommend appropriate changes in a district's management practices. (3) The board of governors, by regulation, shall develop appropriate procedures and actions for districts that fail to achieve fiscal stability or that fail to comply with the board of governors' recommendations. The procedures and remedies may include the appointment of a special trustee to manage the district. The board of governors shall be authorized to reduce or withhold apportionment to districts to pay for the cost of the special trustee, management review, or other extraordinary costs resulting from the district's fiscal difficulties and to ensure the stabilization of the district's financial condition. (4) The board of governors shall report to the chairs of the educational policy and fiscal committees of both houses of the Legislature, the Director of Finance, and the Governor any corrective action taken by the district and any action taken against the district pursuant to paragraph (3). SEC. 15.5. Section 84040 of the Education Code is amended to read: 84040. (a) It is the intent of the Legislature to encourage sound fiscal management practices among community college districts for the most efficient and effective use of public funds for the education of community college students by strengthening fiscal accountability at the district and state levels. (b) The governing board of each community college district shall provide for an annual audit of all funds, books, and accounts of the district in accordance with regulations of the board of governors. The audit shall be made by certified public accountants licensed by the California Board of Accountancy. In the event the governing board fails to provide for an audit, the board of governors shall provide for the audit, and if the board of governors fails or is unable to make satisfactory arrangements for the audit, the Department of Finance shall make arrangements for the audit. The cost of any audit described above shall be paid from district funds. (c) The board of governors shall adopt criteria and standards for periodic assessment of the fiscal condition of community college districts, and these regulations regarding the review and improvement of district fiscal conditions as necessary to encourage sound fiscal management practices. In so doing: (1) The governing board of a community college district, as required by regulations of the board of governors, shall periodically report information to the board of governors regarding the fiscal condition of the district. (2) The board of governors, by regulation, shall develop standards for district maintenance of sound fiscal conditions. The regulations shall authorize a comprehensive management review by the board of governors of any community college district that, after assessing itself or being assessed in accordance with criteria and standards of the board of governors, is shown to be experiencing fiscal difficulty. On the basis of the findings of the management review, the board of governors may recommend appropriate changes in a district's management practices. (3) The board of governors, by regulation, shall develop appropriate procedures and actions for districts that fail to achieve fiscal stability or that fail to comply with the board of governors' recommendations. The procedures and remedies may include the appointment of a special trustee to manage the district. The board of governors shall be authorized to reduce or withhold apportionment to districts to pay for the cost of the special trustee, management review, or other extraordinary costs resulting from the district's fiscal difficulties and to ensure the stabilization of the district's financial condition. (4) The board of governors shall report to the chairs of the educational policy and fiscal committees of both houses of the Legislature, the Director of Finance, and the Governor any corrective action taken by the district and any action taken against the district pursuant to paragraph (3). SEC. 16. Section 22056 of the Financial Code is amended to read: 22056. This division does not apply to the Trade and Commerce Agency or to the California Integrated Waste Management Board. SEC. 17. Section 705 of the Food and Agricultural Code is amended to read: 705. All state agencies, including, but not limited to, the California State World Trade Commission, Trade and Commerce Agency, Department of Finance, and the Employment Development Department shall cooperate with the director in the compilation of pertinent statistical data and shall respond to requests by the director for information in a timely manner. SEC. 18. Section 58937 of the Food and Agricultural Code is amended to read: 58937. (a) Any money that is collected by the director pursuant to this chapter shall be deposited in a bank or other depository that is approved by the Director of Finance, allocated to each marketing order under which it is collected. Except as provided in Section 58941, these funds shall be disbursed by the director or the advisory board only for the necessary expenses that are incurred by the advisory board and that are approved by the director with respect to each marketing order. Allowable expenses include expenses generated by the auditing requirement imposed by subdivision (b). Funds so collected shall be deposited and disbursed in conformity with appropriate rules and regulations that are prescribed by the director. The expenditure of these funds is exempt from the provisions of Section 925.6 of the Government Code. (b) All such expenditures by the director shall be audited at least once every two years by one of the following means: (1) By contract with a certified public accountant. (2) By contract with a public accountant holding a valid permit issued by the California Board of Accountancy. (3) By contract with a public accounting firm. (4) By agreement with the Department of Finance. A copy of the audit shall be delivered within 30 days after the completion of the audit to the Governor, the director, and the Controller. SEC. 19. Section 59947 of the Food and Agricultural Code is amended to read: 59947. (a) The funds that are deposited pursuant to Section 59946 shall be disbursed by the director or the marketing program committee, pursuant to regulations prescribed by him or her, only for the expenditures that are incurred by the marketing program committee in carrying out the specific purposes and provisions of the marketing program, including all necessary expenses that are incurred in the formulation, administration, and enforcement of the marketing program, and expenses generated by the auditing requirement imposed by subdivision (b). (b) All expenditures shall be audited at least once every two years by one of the following means: (1) By contract with a certified public accountant. (2) By contract with a public accountant holding a valid permit issued by the California Board of Accountancy. (3) By contract with a public accounting firm. (4) By agreement with the Department of Finance. A copy of the audit shall be delivered, within 30 days after the completion of the audit, to the Governor, the director, and the Controller. SEC. 20. Section 64309 of the Food and Agricultural Code is amended to read: 64309. (a) Any money that is collected by the director pursuant to this chapter shall be deposited in a bank or other depository which is approved by the Director of Finance. Funds which are so collected shall be deposited and disbursed in conformity with appropriate regulations prescribed by the director and may be allocated to pay for expenses generated by the auditing requirement imposed by subdivision (b). The expenditure of those funds shall be exempt from the provisions of Section 925.6 of the Government Code. (b) All expenditures by the director shall be audited at least once every two years by one of the following means: (1) By contract with a certified public accountant. (2) By contract with a public accountant holding a valid permit issued by the California Board of Accountancy. (3) By contract with a public accounting firm. (4) By agreement with the Department of Finance. A copy of the audit shall be delivered within 30 days after the completion thereof to the Governor, the director, and the Controller. SEC. 21. Section 64696 of the Food and Agricultural Code is amended to read: 64696. (a) All money that is collected by the director pursuant to this chapter shall be deposited in any bank, or other depository that is approved by the Director of Finance, allocated to the purposes of this chapter only, and disbursed by the director or the council only for the necessary expenses that are incurred by the council and the director in carrying out the purposes and provisions of this chapter, including expenses generated by the auditing requirement contained in this section. Money that is so collected shall be deposited and disbursed in conformity with appropriate auditing regulations that are prescribed by the director. The expenditure of the money is exempt from the provisions of Sections 925.6 and 16304 of the Government Code. (b) All expenditures by the council and the director shall be audited at least once every two years by one of the following means: (1) By contract with a certified public accountant. (2) By contract with a public accountant holding a valid permit issued by the California Board of Accountancy. (3) By contract with a public accounting firm. (4) By agreement with the Department of Finance. A copy of the audit shall be delivered within 30 days after completion of the audit to the Governor, the director, and the Controller. SEC. 22. Section 76906 of the Food and Agricultural Code is amended to read: 76906. (a) All money that is collected by the director pursuant to this chapter shall be deposited in any bank, or other depository that is approved by the Director of Finance, allocated to the purposes of this chapter only, and disbursed by the director or the council only for the necessary expenses that are incurred by the council and the director in carrying out the purposes and provisions of this chapter, including expenses generated by the auditing requirement contained in this section. Money that is so collected shall be deposited and disbursed in conformity with appropriate auditing regulations which are prescribed by the director. The expenditure of the money is exempt from Section 925.6 and 16304 of the Government Code. (b) All expenditures by the council and the director shall be audited at least once every two years by one of the following means: (1) By contract with a certified public account. (2) By contract with a public accountant holding a valid permit issued by the California Board of Accountancy. (3) By contract with a public accounting firm. (4) By agreement with the Department of Finance. (c) A copy of the audit shall be delivered within 30 days after completion of the audit to the Governor, the director, and the Controller. SEC. 23. Section 78558 of the Food and Agricultural Code is amended to read: 78558. (a) All money that is collected by the council pursuant to this chapter shall be deposited in any bank, or other depository that is approved by the Director of Finance, allocated to the purposes of this chapter only, and disbursed by the council, upon approval of the secretary, only for the necessary expenses that are incurred by the council and the secretary in carrying out the purposes and provisions of this chapter, including expenses generated by the auditing requirement contained in this section. Money that is so collected shall be deposited and disbursed in conformity with appropriate auditing regulations adopted by the secretary. The expenditure of the money is exempt from Sections 925.6 and 16304 of the Government Code. (b) All expenditures by the council and the secretary shall be audited at least once every two years by one of the following means: (1) By contract with a certified public accountant. (2) By contract with a public accountant holding a valid permit issued by the California Board of Accountancy. (3) By contract with a public accounting firm. (4) By agreement with the Department of Finance. (c) A copy of the audit shall be delivered by the auditor to the council within 30 days after completion of the audit. Upon receipt, the council shall deliver a copy of the audit to the Governor, the secretary, the Controller, and to any member of the public requesting a copy. SEC. 24. Section 7504 of the Government Code is amended to read: 7504. (a) All state and local public retirement systems shall, not less than triennially, secure the services of an enrolled actuary. An enrolled actuary, for the purposes of this section, means an actuary enrolled under subtitle C of Title III of the federal Employee Retirement Income Security Act of 1974 (Public Law 93-406) and who has demonstrated experience in public retirement systems. The actuary shall perform a valuation of the system utilizing actuarial assumptions and techniques established by the agency that are, in the aggregate, reasonably related to the experience and the actuary's best estimate of anticipated experience under the system. Any differences between the actuarial assumptions and techniques used by the actuary that differ significantly from those established by the agency shall be disclosed in the actuary's report and the effect of the differences on the actuary's statement of costs and obligations shall be shown. (b) All state and local public retirement systems shall secure the services of a qualified person to perform an attest audit of the system's financial statements. A qualified person means any of the following: (1) A person who is licensed to practice as a certified public accountant in this state by the California Board of Accountancy. (2) A person who is registered and entitled to practice as a public accountant in this state by the California Board of Accountancy. (3) A county auditor in any county subject to the County Employees Retirement Law of 1937 (Chapter 3 (commencing with Section 31450) of Part 3 of Division 4 of Title 3). (4) A county auditor in any county having a pension trust and retirement plan established pursuant to Section 53216. (c) All state and local public retirement systems shall submit audited financial statements to the State Controller at the earliest practicable opportunity within six months of the close of each fiscal year. However, the State Controller may delay the filing date for reports due in the first year until the time as report forms have been developed that, in his or her judgment, will satisfy the requirements of this section. The financial statements shall be prepared in accordance with generally accepted accounting principles in the form and manner prescribed by the State Controller. The penalty prescribed in Section 53895 shall be invoked for failure to comply with this section. Upon a satisfactory showing of good cause, the State Controller may waive the penalty for late filing provided by this subdivision. (d) The State Controller shall compile and publish a report annually on the financial condition of all state and local public retirement systems containing, but not limited to, the data required in Section 7502. SEC. 25. Section 7591 of the Government Code is amended to read: 7591. (a) The amount of fifteen million dollars ($15,000,000) is appropriated, subject to subdivision (b), from the General Fund to the Trade and Commerce Agency for a loan for allocation over three years in three equal amounts to that nonprofit organization currently named the San Diego National Sports Training Foundation, for purposes of developing and constructing, with the participation and advice of the United States Olympic Committee, a California Olympic Training Center. (b) The loan allocations provided for by this section shall be made no earlier than December 31, of 1990, 1991, and 1992, and shall be made only if the San Diego National Sports Training Foundation is able and willing by each of those dates to provide the sum of five million dollars ($5,000,000), for purposes of developing and constructing, with the participation and advice of the United States Olympic Committee, a California Olympic Training Center. (c) Loan allocations shall be repaid in full no later than 20 years from the date of receipt at a rate of interest equal to the average Pooled Money Investment Account rate over the period during which any portion of an allocated amount remains outstanding. SEC. 26. Section 8899.10 of the Government Code is amended to read: 8899.10. The Legislature finds and declares all of the following: (a) (1) As demonstrated by the California earthquake of October 17, 1989, the citizens of California live under the constant shadow of death, personal injury, and property damage from earthquakes. (2) During the same year as the California earthquake of October 17, 1989, there were over 15,000 earthquakes of varying magnitude recorded in this state. (3) A cohesive plan to optimize current and emerging earthquake research for the benefit of the citizens of California does not exist. (4) A cohesive plan to optimize current and emerging earthquake research is critical to protect the health and safety of the citizens of California. (b) It is therefore appropriate for the State of California to fund an Earthquake Research Evaluation Conference for the purpose of critiquing existing and emerging technologies for earthquake research and recommending a comprehensive plan for earthquake research in California. The findings of the Earthquake Research Evaluation Conference should be used by the Seismic Safety Commission, in collaboration with the California Council on Science and Technology, the Office of Competitive Technology in the Trade and Commerce Agency, and the Division of Mines and Geology in the Department of Conservation, as the basis for finalizing and implementing a five-year earthquake research plan for the State of California. SEC. 27. Section 8899.12 of the Government Code is amended to read: 8899.12. (a) Participants in the EREC shall be selected by the Seismic Safety Commission in collaboration with the California Council on Science and Technology, the Division of Mines and Geology in the Department of Conservation, and the Office of Competitive Technology in the Trade and Commerce Agency. EREC participants shall include, but not be limited to, representatives from all of the following: (1) Research universities. (2) Major professional organizations. (3) State agencies. (4) Federal agencies. (5) Private industry. (b) The organization and management of the EREC shall be the responsibility of the Seismic Safety Commission, in collaboration with the California Council on Science and Technology, the Division of Mines and Geology, and the Office of Competitive Technology. SEC. 28. Section 8899.16 of the Government Code is amended to read: 8899.16. (a) In order to expedite the development of emerging technologies and to encourage rapid technology transfer, grant awards shall be made to not more than five California companies to conduct feasibility studies that will evaluate new, innovative technologies to improve the understanding of impending earthquakes and their effects. (b) The Office of Competitive Technology in the Trade and Commerce Agency shall implement this section with the advice of the Division of Mines and Geology in the Department of Conservation. (c) The Legislature may fund additional studies in accordance with the five-year earthquake research plan developed pursuant to Section 8899.15. (d) This section shall be implemented only to the extent that funds are available for its implementation. SEC. 29. Section 8899.21 of the Government Code is amended to read: 8899.21. (a) For the purpose of expediting the development of emerging technologies and encouraging rapid technology transfer, not more than five grant awards shall be made for the 1991-92 fiscal year to commercialize technologies that will predict earthquakes or mitigate their impact. Grant awards may be made to public, nonprofit, not for profit, or private entities. (b) The Office of Competitive Technology in the Trade and Commerce Agency shall implement this section with the advice of the Division of Mines and Geology in the Department of Conservation and the Seismic Safety Commission. The competitive technology advisory committee shall also advise the Office of Competitive Technology in implementing this section. (c) Within 90 days of the effective date of this section, the Office of Competitive Technology shall issue a solicitation, pursuant to regulation, inviting project proposals to be submitted no later than 120 days from the date of the request for proposal of solicitation. (d) A project shall at least do the following: (1) Lead to the commercialization of technologies that will predict earthquakes or mitigate their impact. (2) Include significant matching contributions from a California company. (3) Meet any other requirements that the department determines are consistent with the purposes of this section. (e) The Office of Competitive Technology shall evaluate project proposals which shall at least include a peer review and an oral review. The Secretary of Trade and Commerce upon recommendation from the Office of Competitive Technology, shall select projects for funding which best achieve the purposes of this section. (f) A grantee shall submit quarterly progress reports and participate in oral project reviews during the term of the grant. (g) Projects shall be eligible for additional grant funds only upon successful project performance and the availability of additional earthquake research development program funds. (h) The Trade and Commerce Agency may adopt regulations to implement the grant program authorized by this section. The Trade and Commerce Agency shall adopt these regulations as emergency regulations in accordance with Chapter 3.5 (commencing with Section 11340) of Part 1, and for purposes of that chapter, including Section 11349.6, the adoption of the regulations shall be considered by the Office of Administrative Law to be necessary for the immediate preservation of the public peace, health and safety, and general welfare. Notwithstanding subdivision (e) of Section 11346.1, the regulations shall be repealed within 180 days after their effective date, unless the Trade and Commerce Agency complies with Chapter 3.5 (commencing with Section 11340) of Part 1 as provided in subdivision (e) of Section 11346.1. Upon issuing the request for proposal, the office shall publish this fact along with the deadline for grant proposals in the newspapers with the greatest circulation in the major cities in the state, as determined by the office. Upon issuing the request for proposal, the office shall also transmit this information to the Secretary of the Senate and the Chief Clerk of the Assembly for publication in the journals of each house of the Legislature. The request for proposal shall contain a clear description of the criteria to be used to select the projects that are to receive funding pursuant to this chapter. SEC. 30. Section 11126 of the Government Code is amended to read: 11126. (a) (1) Nothing in this article shall be construed to prevent a state body from holding closed sessions during a regular or special meeting to consider the appointment, employment, evaluation of performance, or dismissal of a public employee or to hear complaints or charges brought against that employee by another person or employee unless the employee requests a public hearing. (2) As a condition to holding a closed session on the complaints or charges to consider disciplinary action or to consider dismissal, the employee shall be given written notice of his or her right to have a public hearing, rather than a closed session, and that notice shall be delivered to the employee personally or by mail at least 24 hours before the time for holding a regular or special meeting. If notice is not given, any disciplinary or other action taken against any employee at the closed session shall be null and void. (3) The state body also may exclude from any public or closed session, during the examination of a witness, any or all other witnesses in the matter being investigated by the state body. (4) Following the public hearing or closed session, the body may deliberate on the decision to be reached in a closed session. (b) For the purposes of this section, "employee" shall not include any person who is elected to, or appointed to a public office by, any state body. However, officers of the California State University who receive compensation for their services, other than per diem and ordinary and necessary expenses, shall, when engaged in that capacity, be considered employees. Furthermore, for purposes of this section, the term employee shall include a person exempt from civil service pursuant to subdivision (e) of Section 4 of Article VII of the California Constitution. (c) Nothing in this article shall be construed to do any of the following: (1) Prevent state bodies that administer the licensing of persons engaging in businesses or professions from holding closed sessions to prepare, approve, grade, or administer examinations. (2) Prevent an advisory body of a state body that administers the licensing of persons engaged in businesses or professions from conducting a closed session to discuss matters that the advisory body has found would constitute an unwarranted invasion of the privacy of an individual licensee or applicant if discussed in an open meeting, provided the advisory body does not include a quorum of the members of the state body it advises. Those matters may include review of an applicant's qualifications for licensure and an inquiry specifically related to the state body's enforcement program concerning an individual licensee or applicant where the inquiry occurs prior to the filing of a civil, criminal, or administrative disciplinary action against the licensee or applicant by the state body. (3) Prohibit a state body from holding a closed session to deliberate on a decision to be reached in a proceeding required to be conducted pursuant to Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 or similar provisions of law. (4) Grant a right to enter any correctional institution or the grounds of a correctional institution where that right is not otherwise granted by law, nor shall anything in this article be construed to prevent a state body from holding a closed session when considering and acting upon the determination of a term, parole, or release of any individual or other disposition of an individual case, or if public disclosure of the subjects under discussion or consideration is expressly prohibited by statute. (5) Prevent any closed session to consider the conferring of honorary degrees, or gifts, donations, and bequests that the donor or proposed donor has requested in writing to be kept confidential. (6) Prevent the Alcoholic Beverage Control Appeals Board from holding a closed session for the purpose of holding a deliberative conference as provided in Section 11125. (7) (A) Prevent a state body from holding closed sessions with its negotiator prior to the purchase, sale, exchange, or lease of real property by or for the state body to give instructions to its negotiator regarding the price and terms of payment for the purchase, sale, exchange, or lease. (B) However, prior to the closed session, the state body shall hold an open and public session in which it identifies the real property or real properties that the negotiations may concern and the person or persons with whom its negotiator may negotiate. (C) For purposes of this paragraph, the negotiator may be a member of the state body. (D) For purposes of this paragraph, "lease" includes renewal or renegotiation of a lease. (E) Nothing in this paragraph shall preclude a state body from holding a closed session for discussions regarding eminent domain proceedings pursuant to subdivision (e). (8) Prevent the California Postsecondary Education Commission from holding closed sessions to consider matters pertaining to the appointment or termination of the Director of the California Postsecondary Education Commission. (9) Prevent the Council for Private Postsecondary and Vocational Education from holding closed sessions to consider matters pertaining to the appointment or termination of the Executive Director of the Council for Private Postsecondary and Vocational Education. (10) Prevent the Franchise Tax Board from holding closed sessions for the purpose of discussion of confidential tax returns or information the public disclosure of which is prohibited by law, or from considering matters pertaining to the appointment or removal of the Executive Officer of the Franchise Tax Board. (11) Require the Franchise Tax Board to notice or disclose any confidential tax information considered in closed sessions, or documents executed in connection therewith, the public disclosure of which is prohibited pursuant to Article 2 (commencing with Section 19542) of Chapter 7 of Part 10.2 of the Revenue and Taxation Code. (12) Prevent the Board of Corrections from holding closed sessions when considering reports of crime conditions under Section 6027 of the Penal Code. (13) Prevent the State Air Resources Board from holding closed sessions when considering the proprietary specifications and performance data of manufacturers. (14) Prevent the State Board of Education or the Superintendent of Public Instruction, or any committee advising the board or the superintendent, from holding closed sessions on those portions of its review of assessment instruments pursuant to Chapter 5 (commencing with Section 60600) of, or pursuant to Chapter 8 (commencing with Section 60850) of, Part 33 of the Education Code during which actual test content is reviewed and discussed. The purpose of this provision is to maintain the confidentiality of the assessments under review. (15) Prevent the California Integrated Waste Management Board or its auxiliary committees from holding closed sessions for the purpose of discussing confidential tax returns, discussing trade secrets or confidential or proprietary information in its possession, or discussing other data, the public disclosure of which is prohibited by law. (16) Prevent a state body that invests retirement, pension, or endowment funds from holding closed sessions when considering investment decisions. For purposes of consideration of shareholder voting on corporate stocks held by the state body, closed sessions for the purposes of voting may be held only with respect to election of corporate directors, election of independent auditors, and other financial issues that could have a material effect on the net income of the corporation. For the purpose of real property investment decisions that may be considered in a closed session pursuant to this paragraph, a state body shall also be exempt from the provisions of paragraph (7) relating to the identification of real properties prior to the closed session. (17) Prevent a state body, or boards, commissions, administrative officers, or other representatives that may properly be designated by law or by a state body, from holding closed sessions with its representatives in discharging its responsibilities under Chapter 10 (commencing with Section 3500) of Division 4 of Title 1 as the sessions relate to salaries, salary schedules, or compensation paid in the form of fringe benefits. For the purposes enumerated in the preceding sentence, a state body may also meet with a state conciliator who has intervened in the proceedings. (d) (1) Notwithstanding any other provision of law, any meeting of the Public Utilities Commission at which the rates of entities under the commission's jurisdiction are changed shall be open and public. (2) Nothing in this article shall be construed to prevent the Public Utilities Commission from holding closed sessions to deliberate on the institution of proceedings, or disciplinary actions against any person or entity under the jurisdiction of the commission. (e) (1) Nothing in this article shall be construed to prevent a state body, based on the advice of its legal counsel, from holding a closed session to confer with, or receive advice from, its legal counsel regarding pending litigation when discussion in open session concerning those matters would prejudice the position of the state body in the litigation. (2) For purposes of this article, all expressions of the lawyer-client privilege other than those provided in this subdivision are hereby abrogated. This subdivision is the exclusive expression of the lawyer-client privilege for purposes of conducting closed session meetings pursuant to this article. For purposes of this subdivision, litigation shall be considered pending when any of the following circumstances exist: (A) An adjudicatory proceeding before a court, an administrative body exercising its adjudicatory authority, a hearing officer, or an arbitrator, to which the state body is a party, has been initiated formally. (B) (i) A point has been reached where, in the opinion of the state body on the advice of its legal counsel, based on existing facts and circumstances, there is a significant exposure to litigation against the state body. (ii) Based on existing facts and circumstances, the state body is meeting only to decide whether a closed session is authorized pursuant to clause (i). (C) (i) Based on existing facts and circumstances, the state body has decided to initiate or is deciding whether to initiate litigation. (ii) The legal counsel of the state body shall prepare and submit to it a memorandum stating the specific reasons and legal authority for the closed session. If the closed session is pursuant to paragraph (1), the memorandum shall include the title of the litigation. If the closed session is pursuant to subparagraph (A) or (B), the memorandum shall include the existing facts and circumstances on which it is based. The legal counsel shall submit the memorandum to the state body prior to the closed session, if feasible, and in any case no later than one week after the closed session. The memorandum shall be exempt from disclosure pursuant to Section 6254.25. (iii) For purposes of this subdivision, "litigation" includes any adjudicatory proceeding, including eminent domain, before a court, administrative body exercising its adjudicatory authority, hearing officer, or arbitrator. (iv) Disclosure of a memorandum required under this subdivision shall not be deemed as a waiver of the lawyer-client privilege, as provided for under Article 3 (commencing with Section 950) of Chapter 4 of Division 8 of the Evidence Code. (f) In addition to subdivisions (a), (b), and (c), nothing in this article shall be construed to do any of the following: (1) Prevent a state body operating under a joint powers agreement for insurance pooling from holding a closed session to discuss a claim for the payment of tort liability or public liability losses incurred by the state body or any member agency under the joint powers agreement. (2) Prevent the examining committee established by the State Board of Forestry and Fire Protection, pursuant to Section 763 of the Public Resources Code, from conducting a closed session to consider disciplinary action against an individual professional forester prior to the filing of an accusation against the forester pursuant to Section 11503. (3) Prevent an administrative committee established by the California Board of Accountancy pursuant to Section 5020 of the Business and Professions Code from conducting a closed session to consider disciplinary action against an individual accountant prior to the filing of an accusation against the accountant pursuant to Section 11503. Nothing in this article shall be construed to prevent an examining committee established by the California Board of Accountancy pursuant to Section 5023 of the Business and Professions Code from conducting a closed hearing to interview an individual applicant or accountant regarding the applicant's qualifications. (4) Prevent a state body, as defined in Section 11121.2, from conducting a closed session to consider any matter that properly could be considered in closed session by the state body whose authority it exercises. (5) Prevent a state body, as defined in Section 11121.7, from conducting a closed session to consider any matter that properly could be considered in a closed session by the body defined as a state body pursuant to Section 11121 or 11121.2. (6) Prevent a state body, as defined in Section 11121.8, from conducting a closed session to consider any matter that properly could be considered in a closed session by the state body it advises. (7) Prevent the State Board of Equalization from holding closed sessions for either of the following: (A) When considering matters pertaining to the appointment or removal of the Executive Secretary of the State Board of Equalization. (B) For the purpose of hearing confidential taxpayer appeals or data, the public disclosure of which is prohibited by law. (8) Require the State Board of Equalization to disclose any action taken in closed session or documents executed in connection with that action, the public disclosure of which is prohibited by law pursuant to Sections 15619 and 15641 of this code and Sections 833, 7056, 8255, 9255, 11655, 30455, 32455, 38705, 38706, 43651, 45982, 46751, 50159, 55381, and 60609 of the Revenue and Taxation Code. (9) Prevent the California Earthquake Prediction Evaluation Council, or other body appointed to advise the Director of the Office of Emergency Services or the Governor concerning matters relating to volcanic or earthquake predictions, from holding closed sessions when considering the evaluation of possible predictions. (g) This article shall not prevent either of the following: (1) The Teachers' Retirement Board or the Board of Administration of the Public Employees' Retirement System from holding closed sessions when considering matters pertaining to the recruitment, appointment, employment, or removal of the chief executive officer or when considering matters pertaining to the recruitment or removal of the Chief Investment Officer of the State Teachers' Retirement System or the Public Employees' Retirement System. (2) The Commission on Teacher Credentialing from holding closed sessions when considering matters relating to the recruitment, appointment, or removal of its executive director. SEC. 31. Section 14998.4 of the Government Code is amended to read: 14998.4. (a) The commission shall meet at least quarterly and shall select a chairperson and a vice chairperson from among its members. The vice chairperson shall act as chairperson in the chairperson's absence. (b) Each commission member shall serve without compensation but shall be reimbursed for traveling outside the county in which he or she resides to attend meetings. (c) The commission shall work to encourage motion picture and television filming in California and to that end, shall exercise all of the powers provided in this chapter. (d) The commission shall make recommendations to the Legislature, the Governor, the Trade and Commerce Agency, and other state agencies on legislative or administrative actions that may be necessary or helpful to maintain and improve the position of the state's motion picture industry in the national and world markets. (e) In addition, the commission shall do all of the following: (1) Adopt guidelines for a standardized permit to be used by state agencies and the director. (2) Approve or modify the marketing and promotion plan developed by the director pursuant to subdivision (d) of Section 14998.9 to promote filmmaking in the state. (3) Conduct workshops and trade shows. (4) Provide expertise in promotional activities. (5) Hold hearings. (6) Adopt its own operational rules and procedures. (7) Counsel the Legislature and the Governor on issues relating to the motion picture industry. SEC. 32. The heading of Chapter 1 (commencing with Section 15310) of Part 6.7 of Division 3 of Title 2 of the Government Code is amended to read: CHAPTER 1. TRADE AND COMMERCE AGENCY SEC. 33. Section 15311 of the Government Code is amended to read: 15311. The Trade and Commerce Agency is administered by the Secretary of Trade and Commerce who shall be appointed by the Governor with the advice and consent of the Senate, and who shall be paid a salary at the amount prescribed under Section 11550. SEC. 34. Section 15363.6 of the Government Code is amended to read: 15363.6. The secretary shall have the following responsibilities: (a) Coordinating the various trade, investment, and tourism activities of the Trade and Commerce Agency to ensure that the resources that the state has invested in these programs are used effectively and efficiently and that they foster the state's reputation as a source of high quality, cost-effective goods and services including tourism destinations. (b) Coordinating, on behalf of the Governor, the use of the overseas trade offices by any state export program not under the California State World Trade Commission, such as those that are operated by the Department of Food and Agriculture and the California Energy Commission, and by any state agency which may have occasion to need the services of the overseas trade offices in carrying out that agency's official duties and responsibilities. (c) Reporting to the Governor and the Legislature on an annual basis about the policies, plans, budgeting, and accomplishments of the agency and its programs. (d) In his or her capacity as a member of the Governor's cabinet, coordinating the development of a state policy on economic development and trade, and advising the Governor and members of the cabinet of the potential impacts of regulations on the state's business, economy, and job base. The initial policy and implementation strategy shall be included as a part of the secretary' s first annual report to the Governor and the Legislature following enactment of this chapter. Each year thereafter, the secretary's annual report shall discuss economic development and trade policies including accomplishments and needed modifications. (e) Evaluating, at his or her discretion, the findings and determinations required of any state agency which proposes to adopt regulations under Article 5 (commencing with Section 11346) of Chapter 3.5 of Part 1, including economic and cost impacts, reporting requirements, and alternatives analyses. The secretary shall, during the written comment period specified pursuant to paragraph (9) of subdivision (a) of Section 11346.5, submit written comments into the record of the agency which proposes to adopt those regulations in those instances when the secretary determines that the contents of the notice of the proposed action or the supporting analysis and initial statement of reasons do not sufficiently support the findings and determinations of the agency. The secretary may, at his or her discretion, comment on other aspects of the proposed action that significantly impact the state's business, industry, economy, or job base, including the cumulative effects of the proposed action that significantly impact the state's business, industry, economy, or job base, including the cumulative impacts of the proposed action considered along with regulatory requirements in place at the federal, state, and local levels. SEC. 35. Section 26509 of the Government Code is amended to read: 26509. (a) Notwithstanding any other provision of law, including any provision making records confidential, and including Title 1.8 (commencing with Section 1798) of Part 4 of Division 3 of the Civil Code, the district attorney shall be given access to, and may make copies of, any complaint against a person subject to regulation by a consumer-oriented state agency and any investigation of the person made by the agency, where that person is being investigated by the district attorney regarding possible consumer fraud. (b) Where the district attorney does not take action with respect to the complaint or investigation, the material shall remain confidential. (c) Where the release of the material would jeopardize an investigation or other duties of a consumer-oriented state agency, the agency shall have discretion to delay the release of the information. (d) As used in this section, a consumer-oriented state agency is any state agency that regulates the licensure, certification, or qualification of persons to practice a profession or business within the state, where the regulation is for the protection of consumers who deal with the professionals or businesses. It includes, but is not limited to, all of the following: (1) The Dental Board of California. (2) The Medical Board of California. (3) The State Board of Optometry. (4) The California State Board of Pharmacy. (5) The Veterinary Medical Board. (6) The California Board of Accountancy. (7) The California Board of Architectural Examiners. (8) The State Board of Barbering and Cosmetology. (9) The Board for Professional Engineers and Land Surveyors. (10) The Contractors' State License Board. (11) The Funeral Directors and Embalmers Program. (12) The Structural Pest Control Board. (13) The Bureau of Home Furnishings and Thermal Insulation. (14) The Board of Registered Nursing. (15) The State Board of Fabric Care. (16) The State Board of Chiropractic Examiners. (17) The Board of Behavioral Science Examiners. (18) The State Athletic Commission. (19) The Cemetery Program. (20) The State Board of Guide Dogs for the Blind. (21) The Bureau of Security and Investigative Services. (22) The Court Reporters Board of California. (23) The Board of Vocational Nurse and Psychiatric Technician Examiners of the State of California. (24) The California State Board of Landscape Architects. (25) The Osteopathic Medical Board of California. (26) The Division of Investigation. (27) The Bureau of Automotive Repair. (28) The State Board of Registration for Geologists and Geophysicists. (29) The State Board of Nursing Home Administrators. (30) The Department of Alcoholic Beverage Control. (31) The Department of Insurance. (32) The Public Utilities Commission. (33) The State Department of Health Services. (34) The New Motor Vehicle Board. SEC. 36. Section 26915 of the Government Code is amended to read: 26915. (a) Any requirement that an audit be performed by the county auditor may, at the election of the board of supervisors, also be performed by a county employee or officer who meets both of the following qualifications: (1) The person possesses a valid certificate issued by the California Board of Accountancy and a permit authorizing the person to practice as a certified public accountant or as a public accountant. (2) The employee or officer is independent in accordance with Rule 101 of the American Institute of Certified Public Accountants' Code of Professional Conduct. (b) The election made by the board of supervisors pursuant to subdivision (a) may be in effect for no more than two years after the date that the vote is taken by the board, but the election may be renewed upon expiration. (c) This section shall only be applicable in the County of Orange. (d) Nothing in this section is intended to preclude a county auditor from performing his or her statutorily prescribed duties. SEC. 37. Section 26945 of the Government Code is amended to read: 26945. No person shall hereafter be elected or appointed to the office of county auditor of any county unless the person meets at least one of the following criteria: (a) The person possesses a valid certificate issued by the California Board of Accountancy under Chapter 1 (commencing with Section 5000) of Division 3 of the Business and Professions Code showing the person to be, and a permit authorizing the person to practice as, a certified public accountant or as a public accountant. (b) The person possesses a baccalaureate degree from an accredited university, college, or other four-year institution, with a major in accounting or its equivalent, as described in subdivision (a) of Section 5081.1 of the Business and Professions Code, and has served within the last five years in a senior fiscal management position in a county, city, or other public agency, a private firm, or a nonprofit organization, dealing with similar fiscal responsibilities, for a continuous period of not less than three years. (c) The person possesses a certificate issued by the Institute of Internal Auditors showing the person to be a designated professional internal auditor, with a minimum of 16 college semester units, or their equivalent, in accounting, auditing, or finance. (d) The person has served as county auditor, chief deputy county auditor, or chief assistant county auditor for a continuous period of not less than three years. SEC. 38. Section 27000.7 of the Government Code is amended to read: 27000.7. (a) No person shall be eligible for election or appointment to the office of county treasurer, county tax collector, or county treasurer-tax collector of any county unless that person meets at least one of the following criteria: (1) The person has served in a senior financial management position in a county, city, or other public agency dealing with similar financial responsibilities for a continuous period of not less than three years, including, but not limited to, treasurer, tax collector, auditor, auditor-controller, or the chief deputy or an assistant in those offices. (2) The person possesses a valid baccalaureate, masters, or doctoral degree from an accredited college or university in any of the following major fields of study: business administration, public administration, economics, finance, accounting, or a related field, with a minimum of 16 college semester units, or their equivalent, in accounting, auditing, or finance. (3) The person possesses a valid certificate issued by the California Board of Accountancy pursuant to Chapter 1 (commencing with Section 5000) of Division 3 of the Business and Professions Code, showing that person to be, and a permit authorizing that person to practice as, a certified public accountant. (4) The person possesses a valid charter issued by the Institute of Chartered Financial Analysts showing the person to be designated a Chartered Financial Analyst, with a minimum of 16 college semester units, or their equivalent, in accounting, auditing, or finance. (5) The person possesses a valid certificate issued by the Treasury Management Association showing the person to be designated a Certified Cash Manager, with a minimum of 16 college semester units, or their equivalent, in accounting, auditing, or finance. (b) This section shall only apply to any person duly elected or appointed as a county treasurer, county tax collector, or county treasurer-tax collector on or after January 1, 1998. SEC. 39. Section 53131 of the Government Code is amended to read: 53131. As used in this article: (a) "Qualified state and local government auditors" means those auditors employed by state and local governments that meet the independence requirements set forth in the federal Standards for Audit of Governmental Organizations, Programs, Activities and Functions. (b) "Independent public accountants" means a certified public accountant, or a public accountant who is licensed by the California Board of Accountancy who holds a valid permit to practice accountancy. (c) "Local agency" means a city, county, city and county, special district, joint-powers agency, public corporation, nonprofit corporation, or any other agency that is eligible to receive federal block grant funds. (d) "State department" means that state organization designated by law or agreement that allocates block grant funds to local agencies or is otherwise responsible for administering block grant funds. (e) "Financial and compliance audit" means an audit that complies with the financial and compliance audit requirements of the Standards for Audit of Governmental Organizations, Programs, Activities and Functions published by the United States General Accounting Office. Organization wide financial and compliance audits required by Federal Office of Management and Budget Circulars A-102 and A-110 are acceptable for this purpose. SEC. 40. Section 68112 of the Government Code is amended to read: 68112. (a) On or before March 1, 1992, each superior and municipal court in each county, in consultation with the local bar, shall prepare and submit to the Judicial Council for review and approval a trial court coordination plan designed to achieve maximum utilization of judicial and other court resources and statewide cost reductions in court operations of at least 3 percent in the 1992-93 fiscal year, a further 2 percent in the 1993-94 fiscal year, and a further 2 percent in the 1994-95 fiscal year, as applicable. The cost reduction shall be based on the prior year actual expenditures, plus any amount reduced from the budget for court operations by a county as a result of any reduction in state funding made pursuant to Section 13308, increased by the percentage change in population for the prior calendar year and the Trade and Commerce Agency implicit price deflator for state and local government for the prior calendar year. The coordination plan for each court shall be reviewed and approved by the Judicial Council on or before July 1, 1992. Thereafter, commencing in 1995 and every two years thereafter, courts in each county shall prepare, in consultation with the local bar, and submit a trial court coordination plan to the Judicial Council on or before March 1, for review and approval by July 1. The plans shall comply with rules promulgated by the Judicial Council and shall be designed to achieve maximum utilization of judicial and other resources to accomplish increased efficiency in court operations and increased service to the public. Any plan disapproved by the Judicial Council shall be revised and resubmitted within 60 days of notification of disapproval. The Judicial Council may by rule exempt courts from the requirement of filing a new coordination plan for any year if all courts in the county have (1) totally consolidated administrative functions under a single administrative entity, and (2) adopted and implemented a coordination plan in which all courts share each other's work so that cases in all of the county's courts are substantially assigned without regard to whether a judge is on the superior court or the municipal court, and which provides for procedures that implement that sharing of work. (b) The coordination plan shall take into consideration the elements specified in standards and rules adopted by the Judicial Council and applicable case processing time standards adopted by the Judicial Council. The standards adopted by the Judicial Council shall include, but not be limited to, the following: (1) The use of blanket cross-assignments allowing judges to hear civil, criminal, or other types of cases within the jurisdiction of another court. (2) The coordinated or joint use of subordinate judicial officers to hear or try matters. (3) The coordinated, joint use, sharing or merger of court support staff among trial courts within a county or across counties. In a county with a population of less than 100,000 the coordination plan need not involve merger of superior and justice court staffs if the court can reasonably demonstrate that the maintenance of separate administrative staffs would be more cost-effective and provide better service. (4) The assignment of civil, criminal, or other types of cases for hearing or trial, regardless of jurisdictional boundaries, to any available judicial officer. (5) The assignment of any type of case to a judge for all purposes commencing with the filing of the case and regardless of jurisdictional boundaries. (6) The establishment of separate calendars or divisions to hear a particular type of case. (7) In rural counties, the use of all court facilities for hearings and trials of all types of cases and to accept for filing documents in any case before any court in the county participating in the coordination plan. (8) The coordinated or joint use of alternative dispute resolution programs such as arbitration. (9) The unification of the trial courts within a county to the maximum extent permitted by the California Constitution. (10) The joint development of automated accounting and case-processing systems, including joint use of moneys available under Section 68090.8. (c) In preparing coordination plans a court or courts in a county may petition the Judicial Council to permit division of the court or courts into smaller administrative units where a courtwide plan would impose an undue burden because of the number of judges or the physical location of the divisions of the court or courts. (d) In preparing coordination plans, the courts are strongly encouraged to develop a plan that includes all superior and municipal courts in the county. SEC. 41. Section 11998.1 of the Health and Safety Code is amended to read: 11998.1. It is the intent of the Legislature that the following long-term five-year goals be achieved: (a) With regard to education and prevention of drug and alcohol abuse programs, the following goals: (1) Drug and alcohol abuse education has been included within the mandatory curriculum in kindergarten and grades 1 to 12, inclusive, in every public school in California. (2) Basic training on how to recognize, and understand what to do about, drug and alcohol abuse has been provided to administrators and all teachers of kindergarten and grades 1 to 12, inclusive. (3) All school counselors and school nurses have received comprehensive drug and alcohol abuse training. (4) Each school district with kindergarten and grades 1 to 12, inclusive, has appointed a drug and alcohol abuse advisory team of school administrators, teachers, counselors, students, parents, community representatives, and health care professionals, all of whom have expertise in drug and alcohol abuse prevention. The team coordinates with and receives consultation from the county alcohol and drug program administrators. (5) Every school board member has received basic drug and alcohol abuse information. (6) Each school district has a drug and alcohol abuse specialist to assist the individual schools. (7) Each school in grades 7 to 12, inclusive, has student peer group drug and alcohol abuse programs. (8) Every school district with kindergarten and grades 1 to 12, inclusive, has updated written drug and alcohol abuse policies and procedures including disciplinary procedures which will be given to every school employee, every student, and every parent. (9) The California State University and the University of California have evaluated and, if feasible, established educational programs and degrees in the area of drug and alcohol abuse. (10) Every school district with kindergarten and grades 1 to 12, inclusive, has an established parent teachers group with drug and alcohol abuse prevention goals. (11) Every school district has instituted a drug and alcohol abuse education program for parents. (12) Drug and alcohol abuse training has been imposed as a condition for teacher credentialing and license renewal, and knowledge on the issue is measured on the California Basic Education Skills Test. (13) Drug and alcohol abuse knowledge has been established as a component on standardized competency tests as a requirement for graduation. (14) Every school district has established a parent support group. (15) Every school district has instituted policies that address the special needs of children who have been rehabilitated for drug or alcohol abuse problems and who are reentering school. These policies shall consider the loss of schooltime, the loss of academic credits, and the sociological problems associated with drug and alcohol abuse, its rehabilitation, and the educational delay it causes. (16) The number of drug and alcohol abuse related incidents on school grounds has decreased by 20 percent. (b) With regard to community programs, the following goals: (1) Every community-based social service organization that receives state and local financial assistance has drug and alcohol abuse information available for clients. (2) All neighborhood watch, business watch, and community conflict resolution programs have included drug and alcohol abuse prevention efforts. (3) All community-based programs that serve schoolaged children have staff trained in drug and alcohol abuse and give a clear, drug- and alcohol-free message. (c) With regard to drug and alcohol abuse programs of the media, the following goals: (1) The state has established a comprehensive media campaign that involves all facets of the drug and alcohol abuse problem, including treatment, education, prevention, and intervention that will result in increasing the public's knowledge and awareness of the detrimental effects of alcohol and drug use, reducing the use of alcohol and drugs, and increasing healthy lifestyle choices. (2) The department on a statewide basis, and the county board of supervisors or its designees at the local level, have: (A) Assisted the entertainment industry in identifying ways to use the entertainment industry effectively to encourage lifestyles free of substance abuse. (B) Assisted the manufacturers of drug and alcohol products in identifying ways to use product advertising effectively to discourage substance abuse. (C) Assisted television stations in identifying ways to use television programming effectively to encourage lifestyles free of substance abuse. (3) A statewide cooperative fundraising program with recording artists and the entertainment industry has been encouraged to fund drug and alcohol abuse prevention efforts in the state. (d) With regard to drug and alcohol abuse health care programs, the following goals: (1) The number of drug and alcohol abuse-related medical emergencies has decreased by 4 percent per year. (2) All general acute care hospitals and AIDS medical service providers have provided information to their patients on drug and alcohol abuse. (3) The Medical Board of California, the Psychology Examining Committee, the Board of Registered Nursing, and the Board of Behavioral Science Examiners have developed and implemented the guidelines or regulations requiring drug and alcohol abuse training for their licensees, and have developed methods of providing training for those professionals. (e) With regard to private sector drug and alcohol abuse programs, the following goals: (1) A significant percentage of businesses in the private sector have developed personnel policies that discourage drug and alcohol abuse and encourage supervision, training, and employee education. (2) Noteworthy and publicly recognized figures and private industry have been encouraged to sponsor fundraising events for drug and alcohol abuse prevention. (3) Every public or private athletic team has been encouraged to establish policies forbidding drug and alcohol abuse. (4) The private sector has established personnel policies that discourage drug and alcohol abuse but encourage treatment for those employees who require this assistance. (f) With regard to local government drug and alcohol abuse programs, the following goals: (1) Every county has a five-year master plan to eliminate drug and alcohol abuse developed jointly by the county-designated alcohol and drug program administrators, reviewed jointly by the advisory boards set forth in paragraph (2), and approved by the board of supervisors. For those counties in which the alcohol and drug programs are jointly administered, the administrator shall develop the five-year master plan. To the degree possible, all existing local plans relating to drug or alcohol abuse shall be incorporated into the master plan. (2) Every county has an advisory board on alcohol problems and an advisory board on drug programs. The membership of these advisory boards is representative of the county's population and is geographically balanced. To the maximum extent possible the county advisory board on alcohol problems and the county advisory board on drug programs will have representatives of the following: (A) Law enforcement. (B) Education. (C) The treatment and recovery community, including a representative with expertise in AIDS treatment services. (D) Judiciary. (E) Students. (F) Parents. (G) Private industry. (H) Other community organizations involved in drug and alcohol services. (I) A representative of organized labor responsible for the provision of Employee Assistance Program services. If any of these areas is not represented on the advisory bodies, the administrator designated in paragraph (1) shall solicit input from a representative of the nonrepresented area prior to the development of a master plan pursuant to paragraph (1). (3) Every county public social service agency has established policies that discourage drug and alcohol abuse and encourage treatment and recovery services when necessary. (4) Every local unit of government has an employee assistance program that addresses drug and alcohol abuse problems. (5) Every local unit of government has considered the potential for drug and alcohol abuse problems when developing zoning ordinances and issuing conditional use permits. (6) Every county master plan includes treatment and recovery services. (6.5) Every county master plan includes specialized provisions to ensure optimum alcohol and drug abuse service delivery for handicapped and disabled persons. (7) Every local unit of government has been encouraged to establish an employee assistance program that includes the treatment of drug and alcohol abuse-related programs. (8) Every local governmental social service provider has established a referral system under which clients with drug and alcohol abuse problems can be referred for treatment. (9) Every county drug and alcohol abuse treatment or recovery program that serves women gives priority for services to pregnant women. (10) Every alcohol and drug abuse program provides acquired immune deficiency syndrome (AIDS) information to all program participants. (g) With regard to state and federal government drug and alcohol abuse programs, the following goals: (1) The Department of Alcoholic Beverage Control has informed all alcohol retailers of the laws governing liquor sales and has provided training available to all personnel selling alcoholic beverages, on identifying and handling minors attempting to purchase alcohol. (2) The Office of Criminal Justice Planning has required all applicants for crime prevention and juvenile justice and delinquency prevention funds to include drug and alcohol abuse prevention efforts in their programs. (3) All county applications for direct or indirect drug and alcohol services funding from the department include a prevention component. (4) The Superintendent of Public Instruction has employed drug and alcohol abuse school prevention specialists and assisted school districts with the implementation of prevention programs. (5) The State Department of Mental Health has staff trained in drug and alcohol abuse prevention who can assist local mental health programs with prevention efforts. (6) The Department of the California Highway Patrol, as permitted by the United States Constitution, has established routine statewide sobriety checkpoints for driving while under the influence. (7) The Department of Corrections and the Department of the Youth Authority have provided drug and alcohol abuse education and prevention services for all inmates, wards, and parolees. Both departments have provided drug and alcohol abuse treatment services for any inmate, ward, or parolee determined to be in need of these services, or who personally requests these services. (8) The Department of Motor Vehicles has distributed prevention materials with each driver's license or certificate of renewal and each vehicle registration renewal mailed by the Department of Motor Vehicles. (9) Federal prevention programs have been encouraged to follow the master plan. (10) State licensing and program regulations for drug and alcohol abuse treatment programs have been consolidated and administered by one state agency. (11) State treatment funding priorities have been included to specially recognize the multiple diagnosed client who would be eligible for services from more than one state agency. (12) Every state agency has formalized employee assistance programs that include the treatment of drug and alcohol abuse-related problems. (13) The state master plan includes specialized provisions to ensure optimum drug and alcohol abuse service delivery for handicapped and disabled persons. (14) The Trade and Commerce Agency, in coordination with private industry, encourages the creation of employee alcohol and drug abuse prevention programs in the workplace or provides information to employees on treatment or recovery programs that are available to them. (h) With regard to private sector direct service providers, the following goals: (1) Drinking drivers programs have provided clear measurements of successful completion of the program to the courts for each court-ordered client. (2) Sufficient drug and alcohol treatment and recovery services exist throughout the state to meet all clients' immediate and long-range needs. (3) Each county to the extent possible provides localized alcohol and drug treatment and recovery services designed for individuals seeking assistance for polydrug abuse. (4) Adequate nonresidential and residential services are available statewide for juveniles in need of alcohol or drug abuse services. (5) Each provider of alcohol or drug services has been certified by the state. (6) Drug and alcohol abuse treatment providers provide general acquired immune deficiency syndrome (AIDS) information during treatment. (i) With regard to supply regulation and reduction in conjunction with drug and alcohol abuse, the following goals: (1) The California National Guard supports federal, state, and local drug enforcement agencies in counternarcotic operations as permitted by applicable laws and regulations. (2) Each county has a drug and alcohol abuse enforcement team, designated by the board of supervisors. This team includes all components of the criminal justice system. This team shall be responsible to the board of supervisors, shall coordinate with the drug and alcohol abuse advisory board and the county on all criminal justice matters relating to drug and alcohol abuse, and shall coordinate, and actively participate, with the county alcohol and drug program administrators throughout the development and implementation of the five-year master plan. (3) The Office of Criminal Justice Planning, the Youth and Adult Correctional Agency, the Department of the California Highway Patrol, the Office of Traffic Safety, and the Department of Justice have established a state level drug and alcohol abuse enforcement team that includes representatives from all facets of criminal justice. The lead agency for the enforcement team has been designated by the Governor. This team advises the state and assists the local teams. (4) The Office of Criminal Justice Planning, the Youth and Adult Correctional Agency, and the Department of Justice have, as a priority when determining training subjects, prevention seminars on drug and alcohol abuse. The Commission on Peace Officer Standards and Training has, as a priority when determining training subjects, drug and alcohol enforcement. (5) The Department of the California Highway Patrol, as permitted by the United States Constitution, will in conjunction with establishing sobriety checkpoints statewide, assist local law enforcement agencies with the establishment of local programs. (6) Counties with more than 10 superior court judgeships have established programs under which drug cases receive swift prosecution by well-trained prosecutors before judges who are experienced in the handling of drug cases. (7) The courts, when determining bail eligibility and the amount of bail for persons suspected of a crime involving a controlled substance, shall consider the quantity of the substance involved when measuring the danger to society if the suspect is released. (8) Drunk driving jails have been established that provide offender education and treatment during incarceration. (9) All probation and parole officers have received drug and alcohol abuse training, including particular training on drug recognition. (10) All parolees and persons on probation with a criminal history that involves drug or alcohol abuse have conditions of parole or probation that prohibit drug and alcohol abuse. (11) The Judicial Council has provided training on drug and alcohol abuse for the judges. (12) The courts, when sentencing offenders convicted of selling drugs, consider "street value" of the drugs involved in the underlying crime. (13) Judges have been encouraged to include drug and alcohol abuse treatment and prevention services in sentences for all offenders. Judges are requiring, as a condition of sentencing, drug and alcohol abuse education and treatment services for all persons convicted of driving under the influence of alcohol or drugs. (14) Juvenile halls and jails provide clients with information on drug and alcohol abuse. (15) The estimated number of clandestine labs operating in California has decreased by 10 percent per year. (16) Each local law enforcement agency has developed, with the schools, protocol on responding to school drug and alcohol abuse problems. (17) Every county has instituted a mandatory driving while under the influence presentence offender evaluation program. SEC. 42. Section 33492.71 of the Health and Safety Code is amended to read: 33492.71. (a) This section shall apply to each redevelopment project area created pursuant to this article with a redevelopment plan that contains the provisions required by Section 33670. All amounts calculated pursuant to this section shall be calculated after the amount required to be deposited in the Low and Moderate Income Housing Fund pursuant to Sections 33334.2, 33334.3, 33334.6, and 33492.76, and the amounts required to be paid by school and community college districts pursuant to Section 33492.78 have been deducted from the local tax increment funds received by the agency in the applicable fiscal year. (b) The payments made pursuant to this section shall be in addition to any amounts the affected taxing entities receive pursuant to subdivision (a) of Section 33670. The agency shall reduce its payments pursuant to this section to the authority or an affected taxing entity by any amount the agency has paid, directly or indirectly, pursuant to Section 33445 and with the agreement of the authority or the affected taxing entity, or pursuant to any other provision of law other than this section for, or in connection with a public facility owned or leased by the authority or that affected taxing entity and with the agreement of the authority or that affected taxing entity. (c) Commencing in the first fiscal year in which a redevelopment agency receives tax-increment revenue from a project area created pursuant to this article, the agency shall pay the following amounts to the following entities, and the agency shall not be obligated to pay any additional sums to any taxing entities pursuant to Section 33607.5 and subdivision (b) of Section 33676: (1) (A) Thirty-five percent of the tax-increment revenue received by the agency after the amount required to be deposited in the Low and Moderate Income Housing Fund pursuant to Sections 33334.2, 33334.3, and 33334.6, as modified by Section 33492.76, has been deducted each fiscal year shall be paid to the authority to finance in whole or in part, its responsibilities in providing for the reuse of Fort Ord. (B) Thirty-five percent of the tax-increment revenue received by the agency after the amount required to be deposited in the Low and Moderate Income Housing Fund pursuant to Sections 33334.2, 33334.3, and 33334.6 of, as modified by Section 33492.76, has been deducted each fiscal year shall be paid to or retained by the redevelopment agency of the city or county in which the project area is located, to finance, in whole or in part, its responsibilities in providing for the reuse of Fort Ord. (C) Of the amount referenced in subparagraph (B), each city may elect to receive from its agency, and the agency shall pay, an amount not to exceed 25 percent of the tax-increment revenue generated from a project area established pursuant to this article, to alleviate the financial burden and detriment incurred as a result of the adoption of the redevelopment plan in each year until the sixth fiscal year after the year in which the agency is first allocated one hundred thousand dollars ($100,000) or more in tax-increment revenues. (D) Upon dissolution of the authority, the amount allocated pursuant to this section shall continue to be paid to the accounts of the authority insofar as needed to pay principal and interest or other amounts on debt that was incurred by the authority. Funds that would be allocated pursuant to this section that exceed the amounts necessary to pay debt service on authority debt shall be divided as follows: 54 percent shall be allocated to the city or county redevelopment agency that establishes the project area; 38 percent shall be allocated to the county; and 8 percent shall be allocated to other affected taxing entities. (2) Twenty-five percent of the tax-increment revenue received by the agency after the amount required to be deposited in the Low and Moderate Income Housing Fund pursuant to Sections 33334.2, 33334.3, and 33334.6, as modified by Section 33492.76, has been deducted each fiscal year shall be paid to the county to alleviate the financial burden and detriment to the county incurred because of the establishment of the project area. (3) Not to exceed 5 percent of the tax-increment revenue received by the agency after the amount required to be deposited in the Low and Moderate Income Housing Fund pursuant to Sections 33334.2, 33334.3, and 33334.6, as modified by Section 33492.76, has been deducted each fiscal year shall be paid to other affected taxing entities as defined in Section 33492.27, but excluding the entities specified in paragraphs (1) and (2), and excluding school and community college districts, in order to alleviate the financial burden and detriment incurred by those affected taxing entities because of the establishment of the project area. If the total payments made pursuant to this paragraph are less than 5 percent of the tax increment revenue received by the agency pursuant to this article, the remaining portion of the revenue available as a result of this paragraph shall be allocated as follows: 37 percent to the agency, 37 percent to the authority, and 26 percent to the county. (d) Notwithstanding subdivision (c), through and including the second fiscal year after the certification date established pursuant to Section 33492.9, the amount of tax increment revenue the redevelopment agencies of the Cities of Marina and Seaside or the County of Monterey are required to pay to other entities as prescribed in paragraph (1) shall be modified as follows: (1) For each of those fiscal years, the board shall determine an amount equal to 100 percent of the revenue payable to the city or county establishing the project area from all ad valorem property taxes, including allocations of property tax increment revenues pursuant to subdivision (c), sales taxes, utility users taxes, business license taxes, real property transfer taxes, franchise taxes, transient occupancy taxes, and payments received as a result of vehicle and trailer coach registration, and cigarette and gasoline taxes except for payments received as a result of vehicle registrations because of military personnel occupying Fort Ord, attributable to the property, population, and economic activity that is within the jurisdiction of each local entity that has established a redevelopment project area pursuant to this subdivision and is also within the area of Fort Ord. (2) If the amount determined pursuant to paragraph (1) for a fiscal year is less than four hundred thousand dollars ($400,000), the redevelopment agency of the local entity that established the project area shall retain tax-increment revenue received because of the project area so that the sum of the retained tax-increment revenue, exclusive of required deposits to the Low and Moderate Income Housing Fund and the amount of revenue determined pursuant to paragraph (1), equals four hundred thousand dollars ($400,000), but in no event exceeding 100 percent of the tax-increment revenue received for the project area for that fiscal year. Any tax-increment revenue received by the redevelopment agency that established the project area which exceeds the amount necessary to bring the total of the amount calculated pursuant to paragraph (1), plus the tax increment retained by the agency pursuant to this subdivision to four hundred thousand dollars ($400,000) shall be distributed pursuant to subdivision (c). (e) The board may increase or decrease the qualified minimum level of increment funding set in paragraph (2) of subdivision (d) above four hundred thousand dollars ($400,000), if the board determines, based on substantial evidence, that the costs of providing police and fire protection services to the area of Fort Ord within the local agency's redevelopment agency's project area exceed or are less than this amount. In the event that any city which does not now have jurisdiction over territory within the area of Fort Ord subsequently annexes territory within the area of Fort Ord, the board may provide for a qualified minimum level of increment funding at a level that it determines, based on substantial evidence as to the cost of providing police and fire protection services to the area of Fort Ord within the local agency's redevelopment agency's project area is appropriate for a period not to exceed three years, but is under no obligation to do so. (f) Because this article provides for an allocation of tax-increment revenue arising from the redevelopment of the area of Fort Ord among the affected taxing entities for the purpose of alleviating any financial burden or detriment that is caused by the redevelopment plan, the consultations with the affected taxing entities shall not include the payment of supplemental moneys, but may only include the discussion of possible modifications in the redevelopment plan, including, but not limited to, the timing of projects, selection of projects, scope of projects, and the type of financing that is being considered for the projects. (g) (1) All moneys received by the authority from a redevelopment agency shall be deposited in a separate fund from all other moneys of the authority. (2) The authority shall annually report on the total amount of moneys deposited into the fund during the year; the specific project and programs which were financed with the moneys, including amounts expended per project and program; and the beginning and ending balance of the fund. (3) The moneys in the fund shall be exclusively expended for the purpose of financing the development and redevelopment of basewide facilities as identified in the basewide public capital facilities plan adopted pursuant to Section 67675 of the Government Code. (4) The authority shall have an independent financial audit annually prepared on the fund in accordance with generally accepted auditing standards and rules of governing auditing reports promulgated by the California Board of Accountancy. (h) Notwithstanding any other provision of law, no tax increment moneys, including moneys paid from a redevelopment agency to Fort Ord Reuse Authority or any affected taxing entity, shall finance the development or redevelopment of buildings owned or operated by the California State University or the University of California. SEC. 43. Section 34053 of the Health and Safety Code is amended to read: 34053. For the purpose of providing disaster relief to farmworkers in communities subject to a natural disaster, the department shall give priority to awarding grants in communities participating in the Special Housing Program for Migratory Workers (Chapter 8.5 (commencing with Section 50710) of Part 2 of Division 33) and the Trade and Commerce Agency shall give priority to funding those purposes authorized by the Rural Emergency Assistance Housing Infrastructure Program (Article 6 (commencing with Section 15373.96) of Chapter 2.5 of Part 6.7 of Division 3 of Title 2 of the Government Code). SEC. 44. Section 34327.6 of the Health and Safety Code is amended to read: 34327.6. All funds of housing authorities not subject to audit by a federal agency shall be audited at least once each year at the expense of the housing authority by a certified public accountant or a public accountant holding a valid permit issued by the California Board of Accountancy. Audits made by a certified public accountant, or a public accountant, together with a final balance sheet and operations statement for the year for all authority funds, shall be filed for record purposes with the Department of Housing and Community Development. The authority shall prepare and file with the Department of Housing and Community Development a budget for the year for which the audit is taken with each audit prepared or submitted pursuant to this section. SEC. 45. Section 41503.6 of the Health and Safety Code is amended to read: 41503.6. (a) The Legislature finds and declares that the California Pollution Control Financing Authority and the Trade and Commerce Agency, working with the south coast district, have established successful programs to assist small businesses in complying with district rules and financing the purchase of pollution control equipment. (b) The Treasurer, the California Pollution Control Financing Authority, and the Trade and Commerce Agency shall work with, and provide all feasible assistance to, districts to increase opportunities for small businesses to comply with the rules and regulations of the district. That assistance may include loans, loan guarantees, and other forms of financial assistance. SEC. 46. Section 41865 of the Health and Safety Code is amended to read: 41865. (a) This section shall be known, and may be cited, as the Connelly-Areias-Chandler Rice Straw Burning Reduction Act of 1991. (b) As used in this section: (1) "Sacramento Valley Air Basin" means the area designated by the state board pursuant to Section 39606. (2) "Air pollution control council" means the Sacramento Valley Basinwide Air Pollution Control Council authorized pursuant to Section 40900. (3) "Conditional rice straw burning permit" means a permit to burn granted pursuant to subdivisions (f) and (h). (4) "Allowable acres to be burned" means the number of acres that may be burned pursuant to subdivision (c). (5) "Department" means the Department of Food and Agriculture. (6) "Maximum fall burn acres" means the maximum amount of rice acreage that may be burned from September 1 to December 31, inclusive, of each year. (7) "Maximum spring burn acres" means the maximum amount of rice acreage that may be burned from January 1 to May 31 of the following year, inclusive. (c) Notwithstanding Section 41850, rice straw burning in counties in the Sacramento Valley Air Basin shall be phased down, as follows: (1) From 1998 to 2000, the maximum spring and fall burn acres shall be the following number of acres planted prior to September 1 of each year: Maximum Fall Burn Maximum Spring Burn Year Acres Acres 1998 90,000 110,000 1999 90,000 110,000 2000 90,000 110,000 (2) Notwithstanding paragraph (1), any of the 90,000 acres allocated in the fall that are not burned may be added to the maximum spring burn acres, provided that the maximum spring burn acres does not exceed 160,000 acres. (3) Notwithstanding paragraph (1), the maximum acres burned between January 1, 1998, and August 31, 1998, shall be limited so that the total acres burned between September 1, 1997, and August 31, 1998, do not exceed 38 percent of the total acres planted prior to September 1, 1997. (4) In 2001 and thereafter, the maximum annual burn acres shall be the number of acres prescribed in subdivision (i), subject to subdivisions (f) and (h). (d) The number of allowable acres to be burned each day shall be determined by the state board and the air pollution control officers in the Sacramento Valley Air Basin and equitably allocated among rice growers in accordance with the annual agricultural burning plan adopted by the air pollution control council and approved by the state board. (e) On or before September 1, 2000, the state board, in consultation with the department and the air pollution control council, shall adopt regulations consistent with the criteria provided in subdivisions (f) and (h). On or before September 1, 1996, an advisory group shall be established by the state board and the department to assist in the adoption of those regulations. (f) Commencing September 1, 2001, the county air pollution control officers in the Sacramento Valley Air Basin may grant conditional rice straw burning permits once the county agricultural commissioner has determined that the applicant has met the conditions specified in subdivision (h). The county agricultural commissioner shall be responsible for all field inspections associated with the issuance of conditional rice straw burning permits. A conditional rice straw burning permit shall be valid for only one burn, per field, per year. (g) The county agricultural commissioner may charge the applicant a fee not to exceed the costs incurred by the county agricultural commissioner in making the determination specified in subdivision (f). This subdivision shall be operative only until January 1, 2009. (h) If the terms and conditions for issuing conditional rice straw burning permits specified in paragraphs (1) to (4), inclusive, are met, a conditional rice straw burning permit may be issued unless the state board and the department have jointly determined, based upon an annual review process, that there are other economically and technically feasible alternative means of eliminating the disease that are not substantially more costly to the applicant. The terms and conditions for issuing the conditional rice straw burning permits are: (1) The fields to be burned are specifically described. (2) The applicant has not violated any provision of this section within the previous three years. (3) During the growing season, the county agricultural commissioner has independently determined the significant presence of a pathogen in an amount sufficient to constitute a rice disease such as stem rot. (4) The county agricultural commissioner makes a finding that the existence of the pathogen as identified in paragraph (3) will likely cause a significant, quantifiable reduction in yield in the field to be burned during the current or next growing season. The findings of the county agricultural commissioner shall be based on recommendations adopted by the advisory group established pursuant to subdivision (e). (i) (1) The maximum annual number of acres burned in the Sacramento Valley Air Basin pursuant to paragraph (4) of subdivision (c) shall be the lesser of: (A) The total of 25 percent of each individual applicant's planted acres that year. (B) A total of 125,000 acres planted in the Sacramento Valley Air Basin. (2) Each grower shall be eligible to burn up to 25 percent of the grower's planted acres, as determined by the air pollution control officers in the Sacramento Valley Air Basin and subject to the maximum annual number of acres burned set forth in paragraph (1), if the grower has met the criteria for a conditional rice straw burning permit. (3) The air pollution control council shall annually determine which is the lesser of subparagraphs (A) and (B) of paragraph (1), and shall determine the maximum percentage applicable to all growers subject to the conditions set forth in subdivisions (f) and (h). (4) A grower who owns or operates 400 acres or less who has met the criteria for the issuance of a conditional rice straw burning permit may burn his or her entire acreage once every four years, provided that the limit prescribed in paragraph (1) is not exceeded. (5) Nothing in this subdivision shall permit an applicant to transfer, sell, or trade any permission to burn granted pursuant to this subdivision to another applicant or individual. (j) The state board and the department shall jointly determine if the allowable acres to be burned, as provided in subdivisions (c), (f), and (h), may be exceeded due to extraordinary circumstances, such as an act of God, that have an impact over a continuing duration and make alternatives other than burning unusable. (k) "Administrative burning" means burning of vegetative materials along roads, in ditches, and on levees adjacent to or within a rice field, or the burning of vegetative materials on rice research facilities authorized by the county agricultural commissioner, not to exceed 2,000 acres. Administrative burning conducted in accordance with Section 41852 is not subject to this section. (l) (1) On or before September 1, 1992, the state board and the department shall jointly establish an advisory committee composed of 10 members to assist with the identification and implementation of alternatives to rice straw burning. Members of the committee shall be from the Sacramento Valley Air Basin, and the committee shall consist of two rice growers, two representatives from the environmental community, two health officials, two county supervisors or their designees, one member from the air pollution control council, and one member from the business community with expertise in market or product development. The committee shall meet at least annually. General Fund moneys shall not be used to support the committee. (2) The committee shall develop a list of priority goals for the development of alternative uses of rice straw for the purpose of developing feasible and cost-effective alternatives to rice straw burning. These goals shall include, but not be limited to, research on alternatives, economic incentives to encourage alternative uses, and new product development. (m) On or before September 1, 1998, the state board, in consultation with the department, the advisory committee, and the Trade and Commerce Agency, shall develop an implementation plan and a schedule to achieve diversion of not less than 50 percent of rice straw produced toward off-field uses by 2000. Off-field uses may include, but are not limited to, the production of energy and fuels, construction materials, pulp and paper, and livestock feed. (n) On or before September 1, 1999, the state board and the department shall jointly report to the Legislature on the progress of the phasedown of, and the identification and implementation of alternatives to, rice straw burning. This report shall include an economic and environmental assessment, the status of feasible and cost-effective alternatives to rice straw burning, recommendations from the advisory committee on the development of alternatives to rice straw burning, the status of the implementation plan and the schedule required by subdivision (m), progress toward achieving the 50 percent diversion goal, any recommended changes to this section, and other issues related to this section. The report shall be updated biennially and transmitted to the Legislature not later than September 1 of each odd-numbered year. The state board may adjust the district burn permit fees specified in subdivision (s) to pay for the preparation of the report and its updates. The districts shall collect and remit the adjustment to the state board, which shall deposit the fees in the Motor Vehicle Account in the State Transportation Fund. It shall be the goal of the state board and the department that the cost of the report and its updates shall not exceed fifty thousand dollars ($50,000). (o) The state board and the Department of Food and Agriculture shall jointly collect and analyze all available data relevant to the air quality and public health impacts and, to the extent feasible, the economic impacts, that may be associated with the burning of rice straw pursuant to the schedule provided in paragraph (1) of subdivision (c). On or before July 1, 2001, the state board shall submit a report to the Legislature presenting its findings regarding the air quality, public health, and economic impacts associated with the burning of rice straw pursuant to the schedule provided in paragraph (1) of subdivision (c). (p) The Legislature hereby finds and declares as follows: (1) Because of the requirements imposed by this section, rice straw that was previously burned may present, as solid waste, a new disposal problem. (2) The state should assist local governments and growers in diverting rice straw from landfills by researching and developing diversion options. (q) It is the intent of the Legislature that all feasible alternatives to rice straw burning and options for diverting rice straw from landfills be encouraged. (r) This subdivision confirms that reductions in emissions from rice straw burning qualify for air quality offsets, in accordance with paragraphs (1) and (2). (1) These credits shall meet the requirements specified in state law and district rules and regulations, and shall comply with applicable district banking rules established pursuant to Sections 40709 to 40713, inclusive. Districts are urged to establish banking systems in accordance with Sections 40709 to 40713, inclusive. The state board may adopt regulations to implement this subdivision, including, but not limited to, consideration of the seasonal and intermittent nature of rice straw burning emissions. In developing the regulations, the state board shall consult with all concerned parties. However, emission reduction credits that would otherwise accrue from reductions in emissions from rice straw burning shall not be affected or negated by the phasedown of burning, as specified in subdivision (c). (2) Reductions in emissions achieved in compliance with subdivision (c) that are banked or used as credits shall not be credited for purposes of attainment planning and progress towards the attainment of any state or national ambient air quality standard as required by state and federal law. (s) (1) Any person who negligently or intentionally violates any provision of this article is guilty of a misdemeanor and is subject to a fine of not more than ten thousand dollars ($10,000), imprisonment in the county jail for not more than nine months, or by both that fine and imprisonment. This subdivision applies only to agricultural burning in the Sacramento Valley Air Basin. (2) Any person who negligently or intentionally violates any provision in this article is liable for a civil penalty of not more than ten thousand dollars ($10,000). This subdivision applies only to agricultural burning in the Sacramento Valley Air Basin. (t) Districts in the Sacramento Valley Air Basin shall impose fees on growers to cover the cost of implementing this section pursuant to Section 42311. (u) To the extent that resources are available, the state board and the agencies with jurisdiction over air quality within the Sacramento Valley Air Basin shall do both of the following: (1) Improve responses to citizen complaints, and, to the extent feasible, immediately investigate and analyze smoke complaints from the public to identify factors that contribute to complaints and to develop better smoke control measures to be included in the agricultural burning plan, keep a record of all complaints, coordinate among other agencies on citizens' complaints, and investigate the source of the pollution causing the complaint. (2) Respond more quickly to requests for update from county air pollution control officers to help maximize burning days when meteorological conditions are best suited for smoke dispersion. SEC. 46.5. Section 41865 of the Health and Safety Code is amended to read: 41865. (a) This section shall be known, and may be cited, as the Connelly-Areias-Chandler Rice Straw Burning Reduction Act of 1991. (b) As used in this section: (1) "Sacramento Valley Air Basin" means the area designated by the state board pursuant to Section 39606. (2) "Air pollution control council" means the Sacramento Valley Basinwide Air Pollution Control Council authorized pursuant to Section 40900. (3) "Conditional rice straw burning permit" means a permit to burn granted pursuant to subdivisions (f) and (h). (4) "Allowable acres to be burned" means the number of acres that may be burned pursuant to subdivision (c). (5) "Department" means the Department of Food and Agriculture. (6) "Maximum fall burn acres" means the maximum amount of rice acreage that may be burned from September 1 to December 31, inclusive, of each year. (7) "Maximum spring burn acres" means the maximum amount of rice acreage that may be burned from January 1 to May 31 of the following year, inclusive. (c) Notwithstanding Section 41850, rice straw burning in counties in the Sacramento Valley Air Basin shall be phased down, as follows: (1) From 1998 to 2000, the maximum spring and fall burn acres shall be the following number of acres planted prior to September 1 of each year: Maximum Fall Burn Maximum Spring Burn Year Acres Acres 1998 90,000 110,000 1999 90,000 110,000 2000 90,000 110,000 (2) Notwithstanding paragraph (1), any of the 90,000 acres allocated in the fall that are not burned may be added to the maximum spring burn acres, provided that the maximum spring burn acres does not exceed 160,000 acres. (3) Notwithstanding paragraph (1), the maximum acres burned between January 1, 1998, and August 31, 1998, shall be limited so that the total acres burned between September 1, 1997, and August 31, 1998, do not exceed 38 percent of the total acres planted prior to September 1, 1997. (4) In 2001 and thereafter, the maximum annual burn acres shall be the number of acres prescribed in subdivision (i), subject to subdivisions (f) and (h). (d) The number of allowable acres to be burned each day shall be determined by the state board and the air pollution control officers in the Sacramento Valley Air Basin and equitably allocated among rice growers in accordance with the annual agricultural burning plan adopted by the air pollution control council and approved by the state board. (e) On or before September 1, 2000, the state board, in consultation with the department and the air pollution control council, shall adopt regulations consistent with the criteria provided in subdivisions (f) and (h). On or before September 1, 1996, an advisory group shall be established by the state board and the department to assist in the adoption of those regulations. (f) Commencing September 1, 2001, the county air pollution control officers in the Sacramento Valley Air Basin may grant conditional rice straw burning permits once the county agricultural commissioner has determined that the applicant has met the conditions specified in subdivision (h). The county agricultural commissioner shall be responsible for all field inspections associated with the issuance of conditional rice straw burning permits. A conditional rice straw burning permit shall be valid for only one burn, per field, per year. (g) The county agricultural commissioner may charge the applicant a fee not to exceed the costs incurred by the county agricultural commissioner in making the determination specified in subdivision (f). This subdivision shall be operative only until January 1, 2009. (h) If the terms and conditions for issuing conditional rice straw burning permits specified in paragraphs (1) to (4), inclusive, are met, a conditional rice straw burning permit may be issued unless the state board and the department have jointly determined, based upon an annual review process, that there are other economically and technically feasible alternative means of eliminating the disease that are not substantially more costly to the applicant. The terms and conditions for issuing the conditional rice straw burning permits are: (1) The fields to be burned are specifically described. (2) The applicant has not violated any provision of this section within the previous three years. (3) During the growing season, the county agricultural commissioner has independently determined the significant presence of a pathogen in an amount sufficient to constitute a rice disease such as stem rot. (4) The county agricultural commissioner makes a finding that the existence of the pathogen as identified in paragraph (3) will likely cause a significant, quantifiable reduction in yield in the field to be burned during the current or next growing season. The findings of the county agricultural commissioner shall be based on recommendations adopted by the advisory group established pursuant to subdivision (e). (i) (1) The maximum annual number of acres burned in the Sacramento Valley Air Basin pursuant to paragraph (4) of subdivision (c) shall be the lesser of: (A) The total of 25 percent of each individual applicant's planted acres that year. (B) A total of 125,000 acres planted in the Sacramento Valley Air Basin. (2) Each grower shall be eligible to burn up to 25 percent of the grower's planted acres, as determined by the air pollution control officers in the Sacramento Valley Air Basin and subject to the maximum annual number of acres burned set forth in paragraph (1), if the grower has met the criteria for a conditional rice straw burning permit. (3) The air pollution control council shall annually determine which is the lesser of subparagraphs (A) and (B) of paragraph (1), and shall determine the maximum percentage applicable to all growers subject to the conditions set forth in subdivisions (f) and (h). (4) A grower who owns or operates 400 acres or less who has met the criteria for the issuance of a conditional rice straw burning permit may burn his or her entire acreage once every four years, provided that the limit prescribed in paragraph (1) is not exceeded. (5) Nothing in this subdivision shall permit an applicant to transfer, sell, or trade any permission to burn granted pursuant to this subdivision to another applicant or individual. (j) The state board and the department shall jointly determine if the allowable acres to be burned, as provided in subdivisions (c), (f), and (h), may be exceeded due to extraordinary circumstances, such as an act of God, that have an impact over a continuing duration and make alternatives other than burning unusable. (k) "Administrative burning" means burning of vegetative materials along roads, in ditches, and on levees adjacent to or within a rice field, or the burning of vegetative materials on rice research facilities authorized by the county agricultural commissioner, not to exceed 2,000 acres. Administrative burning conducted in accordance with Section 41852 is not subject to this section. (l) (1) On or before September 1, 1992, the state board and the department shall jointly establish an advisory committee composed of 10 members to assist with the identification and implementation of alternatives to rice straw burning. Members of the committee shall be from the Sacramento Valley Air Basin, and the committee shall consist of two rice growers, two representatives from the environmental community, two health officials, two county supervisors or their designees, one member from the air pollution control council, and one member from the business community with expertise in market or product development. The committee shall meet at least annually. General Fund moneys shall not be used to support the committee. (2) The committee shall develop a list of priority goals for the development of alternative uses of rice straw for the purpose of developing feasible and cost-effective alternatives to rice straw burning. These goals shall include, but not be limited to, research on alternatives, economic incentives to encourage alternative uses, and new product development. (m) On or before September 1, 1998, the state board, in consultation with the department, the advisory committee, and the Trade and Commerce Agency, shall develop an implementation plan and a schedule to achieve diversion of not less than 50 percent of rice straw produced toward off-field uses by 2000. Off-field uses may include, but are not limited to, the production of energy and fuels, construction materials, pulp and paper, and livestock feed. (n) On or before September 1, 1999, the state board and the department shall jointly report to the Legislature on the progress of the phasedown of, and the identification and implementation of alternatives to, rice straw burning. This report shall include an economic and environmental assessment, the status of feasible and cost-effective alternatives to rice straw burning, recommendations from the advisory committee on the development of alternatives to rice straw burning, the status of the implementation plan and the schedule required by subdivision (m), progress toward achieving the 50 percent diversion goal, any recommended changes to this section, and other issues related to this section. The report shall be updated biennially and transmitted to the Legislature not later than September 1 of each odd-numbered year. The state board may adjust the district burn permit fees specified in subdivision (s) to pay for the preparation of the report and its updates. The districts shall collect and remit the adjustment to the state board, which shall deposit the fees in the Motor Vehicle Account in the State Transportation Fund. It shall be the goal of the state board and the department that the cost of the report and its updates shall not exceed fifty thousand dollars ($50,000). (o) The state board and the Department of Food and Agriculture shall jointly collect and analyze all available data relevant to the air quality and public health impacts and, to the extent feasible, the economic impacts, that may be associated with the burning of rice straw pursuant to the schedule provided in paragraph (1) of subdivision (c). On or before July 1, 2001, the state board shall submit a report to the Legislature presenting its findings regarding the air quality, public health, and economic impacts associated with the burning of rice straw pursuant to the schedule provided in paragraph (1) of subdivision (c). (p) The Legislature hereby finds and declares as follows: (1) Because of the requirements imposed by this section, rice straw that was previously burned may present, as solid waste, a new disposal problem. (2) The state should assist local governments and growers in diverting rice straw from landfills by researching and developing diversion options. (q) It is the intent of the Legislature that all feasible alternatives to rice straw burning and options for diverting rice straw from landfills be encouraged. (r) This subdivision confirms that reductions in emissions from rice straw burning qualify for air quality offsets, in accordance with paragraphs (1) and (2). (1) These credits shall meet the requirements specified in state law and district rules and regulations, and shall comply with applicable district banking rules established pursuant to Sections 40709 to 40713, inclusive. Districts are urged to establish banking systems in accordance with Sections 40709 to 40713, inclusive. The state board may adopt regulations to implement this subdivision, including, but not limited to, consideration of the seasonal and intermittent nature of rice straw burning emissions. In developing the regulations, the state board shall consult with all concerned parties. However, emission reduction credits that would otherwise accrue from reductions in emissions from rice straw burning shall not be affected or negated by the phasedown of burning, as specified in subdivision (c). (2) Reductions in emissions achieved in compliance with subdivision (c) that are banked or used as credits shall not be credited for purposes of attainment planning and progress towards the attainment of any state or national ambient air quality standard as required by state and federal law. (s) (1) Any person who negligently or intentionally violates any provision of this article is guilty of a misdemeanor and is subject to a fine of not more than ten thousand dollars ($10,000), imprisonment in the county jail for not more than nine months, or by both that fine and imprisonment. This subdivision applies only to agricultural burning in the Sacramento Valley Air Basin. (2) Any person who negligently or intentionally violates any provision in this article is liable for a civil penalty of not more than ten thousand dollars ($10,000). This subdivision applies only to agricultural burning in the Sacramento Valley Air Basin. (t) Districts in the Sacramento Valley Air Basin shall impose fees on growers to cover the cost of implementing this section pursuant to Section 42311. (u) To the extent that resources are available, the state board and the agencies with jurisdiction over air quality within the Sacramento Valley Air Basin shall do both of the following: (1) Improve responses to citizen complaints, and, to the extent feasible, immediately investigate and analyze smoke complaints from the public to identify factors that contribute to complaints and to develop better smoke control measures to be included in the agricultural burning plan, keep a record of all complaints, coordinate among other agencies on citizens' complaints, and investigate the source of the pollution causing the complaint. (2) Respond more quickly to requests for update from county air pollution control officers to help maximize burning days when meteorological conditions are best suited for smoke dispersion. SEC. 47. Section 50887.5 of the Health and Safety Code is amended to read: 50887.5. The department is encouraged, as appropriate, to enter into interagency agreements with the Trade and Commerce Agency or any other state department or agency to ensure close coordination and cooperation in using the funds of the other departments or agencies for the jobs component, child care component, or other components of the housing developments. SEC. 48. Section 124850 of the Health and Safety Code is amended to read: 124850. The department shall provide expert technical assistance to strategically located, high-risk rural hospitals to assist the hospitals in carrying out an assessment of potential business and diversification of service opportunities. In providing the technical assistance on business opportunities, the department shall consult with the Trade and Commerce Agency and other appropriate agencies. The high-risk rural hospital, in cooperation with the department, may develop a short-term plan of action if, in its opinion, the results of the assessment so indicate. The department, in consultation with an organization of interest, shall do all of the following: (a) Establish a process for identifying strategically located, high-risk rural hospitals and reviewing requests from the hospitals for assistance. (b) Develop a standard format for the strategic assessment. (c) Develop a model action plan. (d) Establish criteria for review of action plans. (e) Request input and assistance from organizations of interest. (f) Make the strategic assessment format and model action plan available to all small and rural hospitals. SEC. 49. Section 10821.5 of the Insurance Code is amended to read: 10821.5. (a) The purchasing alliance shall furnish an annual financial audit to the commissioner on the forms provided by the commissioner. The annual financial audit may be filed either on a calendar year basis on or before March 31, or, if approved in writing by the commissioner in respect to any individual purchasing alliance, on a fiscal year basis on or before 90 days after the end of the fiscal year. The deadline for filing the annual audit may be extended by the commissioner for good cause, as determined by the commissioner for a period not to exceed 60 days. Failure to submit an audit on time, or within any extended time that the commissioner may grant, shall be grounds for an order by the commissioner to prohibiting the alliance from accepting any new business pursuant to this section. The audits shall be private, except that a synopsis of the balance sheet on a form prescribed by the commissioner may be made available to the public upon request. The audits shall be conducted and prepared in accordance with generally accepted auditing standards by an independent certified public accountant or independent licensed public accountant whose certification or license is in good standing at the time of the preparation. The fee for filing of the audit shall be three hundred thirteen dollars ($313). Any purchasing alliance that fails to file any audit or other report on or before the date it is due shall pay to the commissioner a penalty fee of one hundred eighteen dollars ($118) payable within 30 days of the due date of the audit and on failure to pay that fine or any fee or file the audit required by this section, shall forfeit the privilege of accepting new business until the delinquency is corrected. The commissioner may refuse to accept an audit or order a new audit for any of the following reasons: (1) Adverse result in any proceeding before the California Board of Accountancy affecting the auditor's license. (2) The auditor has an affiliation with the purchasing alliance or any of its officers or directors that could prevent his or her reports on the purchasing alliance from being reasonably objective. (3) The auditor has been convicted of any misdemeanor or felony based on his or her activities as an accountant. (4) Judgment adverse to the auditor in any civil action finding him or her guilty of fraud, deceit, or misrepresentation in the practice of his or her profession. (b) Financial and performance audits or examinations of the purchasing alliance shall be conducted by the commissioner once every two years. The cost of the examinations or audits are to be paid by the purchasing alliance. The commissioner may impose conditions on registration, or continued registration to remedy compliance or performance problems. (c) At any time the commissioner determines, after notice and hearing, that a purchasing alliance registered under this article has willfully failed to comply with any of the provisions of this section, the commissioner shall make his or her order prohibiting the purchasing alliance from conducting its business for a period not to exceed one year. Any purchasing alliance violating an order made under this subdivision is subject to seizure under Article 14 (commencing with Section 1010) of Chapter 1 of Part 2 of Division 1, is guilty of a misdemeanor, and may have its certificate of registration revoked by the commissioner. Any person aiding and abetting any purchasing alliance in violation of that order is guilty of a misdemeanor. The purpose of this section is to maintain the solvency of the purchasing alliance subject to this article and to protect the public by preventing fraud and requiring fair dealing. The audit shall be designed to ensure that the purchasing alliance is not a risk-bearing entity, to ensure sound financial controls and money management, and to prevent mismanagement or misappropriation of funds either through neglect or malfeasance. In order to carry out those purposes the commissioner shall make reasonable rules and regulations to govern the conduct of the business of the purchasing alliance subject to this chapter. (d) The commissioner shall establish fees for initial registration of a purchasing alliance and for renewal of registration of a purchasing alliance in an amount sufficient to cover the costs of administering this chapter. A purchasing alliance shall pay the initial registration fee at the time of application for registration, and the renewal fee at the time of application for renewal. SEC. 50. Section 12389 of the Insurance Code is amended to read: 12389. (a) An underwritten title company as defined in Section 12340.5, which shall be a stock corporation, may engage in the business of preparing title searches, title reports, title examinations, certificates or abstracts of title, upon the basis of which a title insurer writes title policies, provided that: (1) Only domestic corporations may be licensed under this section and no underwritten title company, as defined in Section 12340.5, shall become licensed under this section, or change the name under which it is licensed or operates, unless it has first complied with Section 881. (2) Depending upon the county or counties in which the company is licensed to transact business, it shall maintain required minimum net worth as follows: Aggregate number of documents recorded and documents filed in the offices of the county recorders in the preceding calendar year in all counties where the company is licensed to transact business. Amount of required Number of documents minimum net worth Less than 50,000 ........................ $ 75,000 50,000 to 100,000 ....................... 120,000 100,000 to 500,000 ...................... 200,000 500,000 to 1,000,000 .................... 300,000 1,000,000 or more ....................... 400,000 "Net worth" is defined as the excess of assets over all liabilities and required reserves. It may carry as an asset the actual cost of its title plant provided the value ascribed to that asset shall not exceed the aggregate value of all other assets. Where a title plant of an underwritten title company is not being currently maintained, the asset value of the plant shall not exceed its asset value as determined in the preceding paragraph as of the date to which that plant is currently maintained, less 1/10th thereof for each succeeding year or part of the succeeding year that the plant is not being currently maintained. For the purposes of this section, a title plant shall be deemed currently maintained so long as it is used in the normal conduct of the business of title insurance, and (1) the owner of the plant continues regularly to obtain and index title record data to the plant or to a continuation thereof in a format other than that previously used, including, but not limited to, computerization of the data, or (2) the owner of the plant is a participant, in an arrangement for joint use of a title plant system regularly maintained in any format, provided the owner is contractually entitled to receive a copy of the title record data contained in the jointly used title plant system during the period of the owner's participation therein, either periodically or upon termination of that participation, at a cost not to exceed the actual cost of duplication of the title record data. An underwritten title company at all times shall maintain current assets of at least ten thousand dollars ($10,000) in excess of its current liabilities, as current assets and liabilities may be defined pursuant to regulations made by the commissioner. In making the regulations, the commissioner shall be guided by generally accepted accounting principles followed by certified public accountants in this state. (3) An underwritten title company shall obtain from the commissioner a license to transact its business. The license shall not be granted until the applicant conforms to the requirements of this section and all other provisions of this code specifically applicable to applicant. After issuance the holder shall continue to comply with the requirements as to its business set forth in this code, in the applicable rules and regulations of the commissioner and in the laws of this state. Any underwritten title company who possesses, or is required to possess, a license pursuant to this section shall be subject as if an insurer to the provisions of Article 8 (commencing with Section 820) of Chapter 1 of Part 2 of Division 1 of this code and shall be deemed to be subject to authorization by the Insurance Commissioner within the meaning of subdivision (e) of Section 25100 of the Corporations Code. The license may be obtained by filing an application on a form prescribed by the commissioner accompanied by a filing fee of three hundred fifty-four dollars ($354). The license when issued shall be for an indefinite term and shall expire with the termination of the existence of the holder, subject to the annual renewal fee imposed under Sections 12415 and 12416. An underwritten title company seeking to extend its license to an additional county shall pay a two hundred seven dollar ($207) fee for each additional county, and shall furnish to the commissioner evidence, at least sufficient to meet the minimum net worth requirements of paragraph (2), of its financial ability to expand its business operation to include the additional county or counties. (4) (A) An underwritten title company shall furnish an audit to the commissioner on the forms provided by the commissioner annually, either on a calendar year basis on or before March 31st or, if approved in writing by the commissioner in respect to any individual company, on a fiscal year basis on or before 90 days after the end of the fiscal year. The time for furnishing any audit required by this paragraph may be extended, for good cause shown, on written approval of the commissioner for a period, not to exceed 60 days. Failure to submit an audit on time, or within the extended time that the commissioner may grant, shall be grounds for an order by the commissioner to accept no new business pursuant to subdivision (d). The audits shall be private, except that a synopsis of the balance sheet on a form prescribed by the commissioner may be made available to the public. (B) The audits shall be made in accordance with generally accepted auditing standards by an independent certified public accountant or independent licensed public accountant whose certification or license is in good standing at the time of the preparation. The fee for filing the audit shall be three hundred thirteen dollars ($313). (C) The commissioner may refuse to accept an audit or order a new audit for any of the following reasons: (i) Adverse result in any proceeding before the California Board of Accountancy affecting the auditor's license. (ii) The auditor has an affiliation with the underwritten title company or any of its officers or directors that would prevent his or her reports on the company from being reasonably objective. (iii) The auditor has suffered conviction of any misdemeanor or felony based on his or her activities as an accountant. (iv) Judgment adverse to the auditor in any civil action finding him or her guilty of fraud, deceit, or misrepresentation in the practice of his or her profession. Any company that fails to file any audit or other report on or before the date it is due shall pay to the commissioner a penalty fee of one hundred eighteen dollars ($118) and on failure to pay that or any other fee or file the audit required by this section shall forfeit the privilege of accepting new business until the delinquency is corrected. (b) An underwritten title company may engage in the escrow business and act as escrow agent provided that: (1) It shall maintain record of all receipts and disbursements of escrow funds. (2) It shall deposit seven thousand five hundred dollars ($7,500) for each county in which it transacts business in some form permitted by Section 12351 with the commissioner who shall immediately make a special deposit of that amount in the State Treasury and that deposit shall be subject to Sections 12353, 12356, 12357, and 12358 and as long as there are no claims against the deposit all interest and dividends thereon shall be paid to the depositor. The deposit shall be for the security and protection of persons having lawful claims against the depositor growing out of escrow transactions with it. The deposit shall be maintained until four years after all escrows handled by the depositor have been closed. (A) The commissioner may release the deposits prior to the passage of the four-year period upon presentation of evidence satisfactory to the commissioner of either a statutory merger of the depositor into a licensee or certificate holder subject to the jurisdiction of the commissioner, or a valid assumption agreement under which all liability of the depositor stemming from escrow transactions handled by it is assumed by a licensee or certificate holder subject to the jurisdiction of the commissioner. (B) With the foregoing exceptions, the deposit shall be returned to the depositor or lawful successor in interest following the four-year period, upon presentation of evidence satisfactory to the commissioner that there are no claims against the deposit stemming from escrow transactions handled by the depositor. If the commissioner has evidence of one or more claims against the depositor, and the depositor is not in conservatorship or liquidation, the commissioner may interplead the deposit by special endorsement to a court of competent jurisdiction for distribution on the basis that claims against the depositor stemming from escrow transactions handled by it have priority in the distribution over other claims against the depositor. (c) The commissioner shall, whenever it appears necessary, examine the business and affairs of a company licensed under this section. All of these examinations shall be at the expense of the company. (d) At any time that the commissioner determines, after notice and hearing, that a company licensed under this section has willfully failed to comply with any of the provisions of this section, the commissioner shall make his or her order prohibiting the company from conducting its business for a period of not more than one year. Any company violating the commissioner's order is subject to seizure under Article 14 (commencing with Section 1010) of Chapter 1 of Part 2 of Division 1, is guilty of a misdemeanor, and may have its license revoked by the commissioner. Any person aiding and abetting any company in a violation of the commissioner's order is guilty of a misdemeanor. The purpose of this section is to maintain the solvency of the companies subject to this section and to protect the public by preventing fraud and requiring fair dealing. In order to carry out these purposes, the commissioner may make reasonable rules and regulations to govern the conduct of its business of companies subject to this section. The name under which each underwritten title company is licensed shall at all times be an approved name. The fee for filing an application for a change of name shall be one hundred eighteen dollars ($118). Each such company shall be subject to the provisions of Article 14 (commencing with Section 1010) and Article 14.5 (commencing with Section 1065.1) of Chapter 1 of Part 2 of Division 1. The rules and regulations shall be adopted, amended or repealed in accordance with the procedure provided in Chapter 3.5 (commencing with Section 11350) of Part 1 of Division 3 of Title 2 of the Government Code. SEC. 51. Section 25696 of the Public Resources Code is amended to read: 25696. The commission, in cooperation with the California State World Trade Commission and the Trade and Commerce Agency, may assist California-based energy technology and energy conservation firms to export their technologies, products, and services to international markets. The commission may, in coordination with the California State World Trade Commission, do all of the following: (a) Conduct a technical assistance program to help California energy companies improve export opportunities and enhance foreign buyers' awareness of and access to energy technologies and services offered by California-based companies. Technical assistance activities may include, but are not limited to, an energy technology export information clearinghouse, a referral service, a trade lead service consulting services for financing, market evaluation, and legal counseling, and information seminars. (b) Perform research studies and solicit technical advice to identify international market opportunities. (c) Assist California energy companies to evaluate project or site-specific energy needs of international markets. (d) Assist California energy companies to identify and address international trade barriers restricting energy technology exports, including unfair trade practices and discriminatory trade laws. (e) Develop promotional materials in conjunction with California energy companies to expand energy technology exports. (f) Establish technical exchange programs to increase foreign buyers' awareness of suitable energy technology uses. (g) Prepare equipment performance information to enhance potential export opportunities. (h) Coordinate activities with state, federal, and international donor agencies to take advantage of trade promotion and financial assistance efforts offered. SEC. 52. Section 31306 of the Public Resources Code is amended to read: 31306. (a) The conservancy shall propose capital projects and capital programs, generated by the conservancy, local public agencies, or state agencies for grants available under Section 306A of the federal Coastal Zone Management Improvement Act ( Public Law 96-464). The commission shall forward the proposed projects and programs to the Trade and Commerce Agency as applications recommended for funding under Section 306A. The commission shall not forward any application unless it has been proposed by the conservancy. (b) Nothing in this chapter shall diminish the commission's authority pursuant to Section 30330 of the Public Resources Code, which shall include determination of the allocation of federal financial assistance among the coastal management activities, coastal research activities, coastal energy impact activities, living marine resource activities, and natural resources enhancement and management activities, eligible for federal financial assistance under the Coastal Zone Management Improvement Act, or any amendment thereto, or any other federal act enacted up to this time or in the future, that relates to the planning and management of the coastal zone, except as provided in this section. (c) (1) Prior to the commission's determination of allocations under subdivision (b), the commission and the conservancy shall concur on the allocation for capital projects and capital programs generated by the conservancy, local public agencies, or state agencies for public access, agricultural preservation, enhancement of coastal resources, coastal restoration, urban waterfront restoration, reservation of significant coastal resource areas, and commercial fishing facilities. No allocation for these capital projects and capital programs shall be made unless they are proposed by the conservancy. (2) Prior to the commission's determination of allocations under subdivision (b), the commission and the San Francisco Bay Conservation and Development Commission shall concur on the allocation for the San Francisco Bay Conservation and Development Commission to carry out its responsibilities under the federally approved California Coastal Management Program. (3) In determining the allocations under subdivision (b), the commission shall consult with the conservancy, the San Francisco Bay Conservation and Development Commission, and the Department of Finance, and shall ensure that agencies eligible for federal financial assistance under the Coastal Zone Management Improvement Act are allocated sufficient assistance to carry out their required responsibilities under the federally approved California Coastal Management Program. SEC. 53. Section 42021 of the Public Resources Code is amended to read: 42021. Nothing in this chapter prohibits an applicant from seeking designation of an enterprise zone by the Trade and Commerce Agency and receiving economic incentives as defined in Section 7073 of the Government Code. SEC. 54. Section 42022 of the Public Resources Code is amended to read: 42022. In evaluating an application for designation of a recycling market development zone, the board shall consult with the Trade and Commerce Agency. SEC. 55. Section 10525 of the Unemployment Insurance Code is amended to read: 10525. The coordination and special services plan shall also include a dislocated workers assistance plan to provide services to eligible workers pursuant to Chapter 7.5 (commencing with Section 15075) of Division 8. The dislocated workers assistance plan shall meet the requirements of Title III of the federal Job Training Partnership Act (Public Law 97-300), as amended, and include all of the following: (a) The specific responsibilities of each of the state agencies administering dislocated workers assistance programs. (b) Procedures for the exchange of information and coordination between the Employment Development Department and the Trade and Commerce Agency for the purpose of developing strategies to avert plant closings or mass layoffs and to accelerate the reemployment of affected individuals. (c) Provide that services to a substantial number of members of a labor organization shall be established only after full consultation with the labor organization. (d) Prescribe program standards, including, but not limited to, standards based on job placement and job retention. (e) Integration of displaced worker services with services and payments made available under the federal Trade Act of 1974, as amended (19 U.S.C. Sec. 2101 and following), unemployment insurance benefits, the Job Service, vocational education programs, and other programs provided under this division. (f) Coordination of local dislocated worker rapid response assistance planning with the federal Worker Adjustment and Retraining Notification Act, Public Law 100-379, by designation of local service delivery area grant administrators as local governmental entities that will also formally receive the 60-day notice required under the federal act. SEC. 56. Section 12112 of the Unemployment Insurance Code is amended to read: 12112. A procedure for applying for grants shall be developed by a panel consisting of the Directors of the Employment Development Department, the Department of Industrial Relations, and the Trade and Commerce Agency, who shall also make the final decision on the awarding of grants. SEC. 57. Section 12151 of the Unemployment Insurance Code is amended to read: 12151. It is the intent of the Legislature that the Employment Development Department, with the assistance of the Department of Industrial Relations and the Trade and Commerce Agency, seek and apply for funds from the federal government and other potential sources to implement the program established under this division. SEC. 58. Section 15076 of the Unemployment Insurance Code is amended to read: 15076. The private industry councils in each service delivery area shall recommend and approve an employment and training plan for displaced workers, which shall meet the requirements of the federal Job Training Partnership Act, and in addition provide for each of the following: (a) Identification, in conjunction with the Employment Development Department, of individuals eligible for assistance due to any of the following facts: (1) The individuals have been terminated or laid off or have received a notice of termination or layoff from employment, are eligible for or have exhausted their entitlement to unemployment compensation, and are unlikely to return to their previous industry or occupation. (2) The individuals have been terminated from employment, or have received a notice of termination of employment, as a result of any permanent closure of, or substantial layoff at, a plant, facility, or enterprise. (3) The individuals are long-term unemployed and have limited opportunities for employment or reemployment in the same or a similar occupation in the area in which they reside, including older individuals who have had substantial barriers to employment by reason of age. (4) The individuals were self-employed (including farmers and ranchers) and are unemployed as a result of general economic conditions in the community in which they reside or because of natural disasters. (5) The individuals are displaced homemakers who may be provided services as additional dislocated workers without adversely affecting the delivery of services to eligible dislocated workers. (b) Determination of job opportunities that exist within the local labor market area or outside the labor market area for which displaced workers could be retrained, and determination of what training for identified employment opportunities exists or could be provided within the local area. This determination shall be undertaken by use of both of the following: (1) The State-Local Cooperative Labor Market Information Program established in Section 15074. (2) As appropriate, representatives of the Employment Training Panel in accordance with its functions pursuant to Chapter 3.5 (commencing with Section 10200) of Part 1 of Division 3, and representatives of the Trade and Commerce Agency as provided in Article 3.5 (commencing with Section 15340) of Chapter 1 of Part 6.7 of Division 3 of the Government Code. (c) Informing eligible displaced workers of training opportunities. This process shall be undertaken in conjunction with the Employment Development Department. (d) A program for dislocated workers assistance drawing, as appropriate, upon existing facilities and resources, which may include, but not be limited to, all of the following: (1) Dislocated worker employment services and related assistance, provided that employment-related services are coordinated with, and do not duplicate, those available and accessible services of the Employment Development Department, including all of the following: (A) Job search assistance. (B) Job development. (C) Support services, such as financial and personal counseling, child care and related children's services, and assistance in obtaining equipment and supplies necessary for retraining or new employment. (D) Relocation assistance, if it is determined that an eligible individual cannot obtain employment in the commuting area and has secured suitable long duration employment or a bona fide job offer. (E) Prelayoff assistance. (F) Programs conducted in cooperation with employers or labor organizations to provide early intervention in the event of closures of plants or facilities. (2) Training in job skills for which demand exceeds supply, including, where feasible, job training administered by the Employment Training Panel pursuant to Chapter 3.5 (commencing with Section 10200) of Part 1 of Division 3. (3) Commuting assistance, consistent with the Displaced Worker Transportation Program established pursuant to Section 14002.5 of the Government Code. (e) Consultation with affected labor organizations, in the case of any assistance program that will provide services to a substantial number of members of these labor organizations. (f) Involvement of displaced workers in program delivery, including, as appropriate, paid employment for these individuals in providing services under the program. (g) Utilization of services and resources from other sources, public and private, and specific procedures for coordination with other programs, in order to maximize services for displaced workers and their families and increase employment and training opportunities. Examples of programs to be included are the following: (1) Other employment and training and education programs. (2) Social services, including child care and related children's services. (3) Housing programs, including low-income weatherization and home energy conservation programs. (4) Transportation related programs, including highway, bridge, and mass transit construction and repair. (5) Other programs related to infrastructure development and repair. (6) Economic development programs deemed applicable. (h) Contracting with the Employment Development Department in order to provide funding for special services the department is to provide under the local displaced worker assistance program. (i) Coordination with neighboring jurisdictions, in cases of plant closings or mass layoffs that cross service delivery areas. (j) A system of program and fiscal accountability to ensure maximum benefit from the expenditure of federal and state funds and that is consistent with procedures established in the state's job training plan pursuant to Section 121 of the federal Job Training Partnership Act (Public Law 93-700), as amended, including all of the following: (1) Performance goals and standards, established by the State Job Training Coordinating Council, including standards for both of the following: (A) Placement and retention in unsubsidized employment. (B) Earnings and wages. (2) Procedures for reporting on the outcome of the program, which include all of the following: (A) A description of activities conducted. (B) Characteristics of participants. (C) The extent to which the activities conducted achieved relevant performance goals. (3) Fiscal control, accounting, audit, and related provisions. (k) Identification of the administrative entity of the local service delivery area or consortium that shall also receive the 60-day notification required to be given to units of local government pursuant to the federal Worker Adjustment and Retraining Notification Act (Public Law 100-379). (l) Integration of services and benefits available under Chapter 2 of Title II of the federal Trade Act of 1974 (19 U.S.C. Sec. 2101 and following) and Article 1.5 (commencing with Section 1266) of Chapter 5 of Part 1 of Division 1. The plan shall be reviewed and approved according to Sections 15045 and 15046. SEC. 59. Section 15076.5 of the Unemployment Insurance Code is amended to read: 15076.5. The State Job Training Coordinating Council shall do all of the following: (a) Be the lead state agency to establish policies for: (1) Alleviating adverse conditions that might cause plant closures and, where closures are unavoidable, assisting local efforts to secure alternative employment and retraining opportunities for displaced workers. (2) Marshaling available state and federal resources to aid workers and communities affected by major plant closures and to foster long-term economic vitality, industrial growth, and job opportunities. (3) Integrating appropriate activities of the Trade and Commerce Agency, the Employment Development Department, the Employment Training Panel, the Department of Industrial Relations, the State Department of Education, the Chancellor's Office of the California Community Colleges, and the Governor's Office of Planning and Research with the State Dislocated Worker Unit. (4) Collection of data and preparation of economic analyses and reporting, intended to provide better and more detailed assessments of future trends within the industrial, commercial, and agricultural sectors of the economy. (b) Review and comment on the plans for displaced worker assistance programs submitted pursuant to Section 15076. (c) Recommend to the Governor necessary components of state plans under the jurisdiction of other state offices, departments, or agencies that administer programs appropriate for coordination with dislocated worker assistance programs authorized by this chapter. (d) Review and make recommendations to the Governor and the Legislature regarding changes needed in current federal and state statutes and programs in order to minimize adverse consequences of plant closures and promote rapid reemployment of workers and revitalization of communities. SEC. 60. Section 15077 of the Unemployment Insurance Code is amended to read: 15077. The Employment Development Department shall do all of the following: (a) Review and approve the plans for displaced workers' assistance submitted pursuant to Section 15076. (b) According to policies established by the State Job Training Coordinating Council and state law, coordinate displaced workers assistance efforts in situations where plant closures or layoffs within an industry have a significant statewide impact. (c) Encourage and coordinate early identification of situations of potential plant closures, and provide any assistance that may be necessary to alleviate economic dislocation. (d) Provide assistance to the Trade and Commerce Agency in active recruitment of replacement industries or establishments. (e) Cooperate with the Employment Training Panel in the coordination of training and services for displaced workers eligible under Chapter 3.5 (commencing with Section 10200) of Part 1 of Division 3. (f) Serve as the state agency providing any information and procedural activities that may be required by the federal government to ensure federal funding for dislocated workers assistance. (g) Provide for the submission of applications to the United States Secretary of Labor for additional federal funding to the state in accordance with Title III of the federal Job Training Partnership Act (Public Law 93-700), as amended. (h) Operate a monitoring, reporting, and management system that provides an adequate information base for effective program planning, management, review, and evaluation. (i) Administer federal and state funds appropriated for the support of demonstration and special assistance programs for dislocated workers. (j) Provide specific periodic notification to employers of 100 or more employees of their potential responsibilities under the federal Worker Adjustment and Retraining Notification Act (P.L. 100-379), the availability of services to employees and employers under this and other state laws, and instructions on how to comply with those laws and obtain appropriate services. SEC. 61. Section 2.5 of this bill incorporates amendments to Section 149 of the Business and Professions Code proposed by both this bill and SB 1863. It shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2001, but this bill becomes operative first, (2) each bill amends Section 149 of the Business and Professions Code, and (3) this bill is enacted after SB 1863, in which case Section 149 of the Business and Professions Code, as amended by Section 2 of this bill, shall remain operative only until the operative date of SB 1863, at which time Section 2.5 of this bill shall become operative. SEC. 62. Section 15.5 of this bill incorporates amendments to Section 84040 of the Education Code proposed by both this bill and AB 2388. It shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2001, but this bill becomes operative first, (2) each bill amends Section 84040 of the Education Code, and (3) this bill is enacted after AB 2388, in which case Section 84040 of the Education Code, as amended by Section 15 of this bill, shall remain operative only until the operative date of AB 2388, at which time Section 15.5 of this bill shall become operative. SEC. 63. Section 46.5 of this bill incorporates amendments to Section 41865 of the Health and Safety Code proposed by both this bill and AB 2939. It shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2001, but this bill becomes operative first, (2) each bill amends Section 41865 of the Health and Safety Code, and (3) this bill is enacted after AB 2939, in which case Section 41865 of the Health and Safety Code, as amended by Section 46 of this bill, shall remain operative only until the operative date of AB 2939, at which time Section 46.5 of this bill shall become operative. SEC. 64. This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the Constitution and shall go into immediate effect. The facts constituting the necessity are: In order to provide for the protection of consumers, to promote the health and safety of the public, and to promote the efficiency of state government it is necessary that this act go into immediate effect.