CALIFORNIA REGULATORY NOTICE REGISTER 2020, VOLUME NUMBER 50-Z proposed Regulation 3702 is also available on the Areas. The proposed amendments clarify that the CDTFA's website at www.cdtfa.ca.gov. term "reservation," as used in the regulation, means Indian country as defined in section 1151 of title 18
PUBLIC HEARING of the United States Code. The proposed amendments make the regulation consistent with the State Board
The CDTF A has not scheduled a public hearing to of Equalization's (Board's) Legal Department's discuss the proposed regulatory action. However, any analysis based on the U.S. Supreme Court's holding interested person or his or her authorized representative in White Mountain Apache Tribe v. Bracker (1980) may submit a written request for a public hearing 448 U.S. 136 (Bracker), which concluded that federal no later than 15 days before the close of the written law preempts the imposition of state use tax on non- comment period, and the CDTFA will hold a public Indians' purchases of meals, food, and beverages from hearing if it receives a timely written request. on-reservation Indian retailers solely for consumption on the reservation where the purchases are made.
SUBSTANTIALLY RELATED CHANGES The proposed amendments make the regulation PURSUANT TO GC SECTION 11346.8 consistent with the Board's Legal Department's Bracker analyses, which concluded that federal law
The CDTFA may adopt the proposed regulation preempts the imposition of California's sales and with changes that are non-substantial or solely use taxes on sales and purchases of meals, food, and grammatical in nature, or sufficiently related to the beverages, when sold by a non-Indian operating an original proposed text that the public was adequately eating or drinking establishment, such as a restaurant placed on notice that the changes could result from the or bar, on an Indian reservation, pursuant to a lease originally proposed regulatory action. If a sufficiently or sublease, the sales are subject to an Indian tribe's related change is made, the CDTFA will make the sales or use tax, and the meals, food, and beverages full text of the proposed regulation, with the change are sold for consumption on the Indian reservation. clearly indicated, available to the public for at least The proposed amendments establish the presumption 15 days before adoption. The text of the resulting that all meals, food, and beverages sold or purchased regulation will be mailed to those interested parties from an eating or drinking establishment on an Indian who commented on the original proposed regulation reservation are for consumption on the reservation, orally or in writing or who asked to be informed of except meals, food, and beverages sold or purchased such changes. The text of the resulting regulation from a drive-through counter or window or for will also be available to the public from Ms. DeArte. delivery off the reservation, and the presumption that The CDTFA will consider written comments on the meals, food, and beverages sold or purchased from resulting regulation that are received prior to adoption. an eating or drinking establishment's drive-through counter or window are for consumption off the Indian
AVAILABILITY OF FINAL reservation. The proposed amendments clarify that STATEMENT OF REASONS federal preemption does not apply to meals, food, and beverages sold or purchased for delivery off
If the CDTFA adopts the proposed regulatory an Indian reservation and permit on-reservation action, the CDTF A will prepare a final statement of retailers making off-reservation deliveries to report reasons, which will be made available for inspection at their taxable sales for delivery off reservation using 450 N Street, Sacramento, California, and available on a percentage developed from a test period, which is the CDTFA's website at www.cdtfa.ca.gov. subject to audit. The proposed amendments also refer readers to Regulation 1603, Taxable Sales of Food
Products, because it prescribes the application of state TITLE 18. DEPARTMENT OF TAX AND sales and use tax to meals, food, and beverages when FEE ADMINISTRATION they are sold or purchased for consumption off an Indian reservation.
SECTION 1616, FEDERAL AREAS In addition, the proposed amendments to Regulation 1616 replace "Board" with "Department" due to the
NOTICE IS HEREBY GIVEN that the California changes in state government made by Assembly Department of Tax and Fee Administration Bill Number (AB) 102 (Stats. 2017, chapter 16). (Department), pursuant to the authority vested in it The proposed amendments also make a minor non- by Revenue and Taxation Code (RTC) section 7051, substantive clarification, make a minor grammatical proposes to amend California Code of Regulations, change, fix a minor typographical error, update the title 18, section (Regulation or Reg.) 1616, Federal name of Regulation 1668, delete the quotation marks 1547
CALIFORNIA REGULATORY NOTICE REGISTER 2020, VOLUME NUMBER 50-Z from around the names of Regulations 1521, 1667 bingo and card game operations of the Cabazon Band and 1668, and delete outdated language from the of Mission Indians and the Morongo Band of Cahuilla regulation's reference note. Mission Indians. (California v. Cabazon Band of Mission Indians (1987) 480 U.S. 202.) This Court
AUTHORITY ruling, known as the Cabazon decision, set in motion a series of federal and state actions, including two ballot RTC section 7051 measures, which dramatically expanded tribal casino operations in California as well as in other states.
REFERENCE
In response to the Cabazon decision, Congress
RTC sections 6017, 6021, and 6352, and Public Law passed the Indian Gaming Regulatory Act (IGRA) Number 817-76th Congress (Buck Act) (codified in 25 U.S.C. § 2701 et seq.) in 1988. The act makes specified types of gaming lawful on Indian lands
INFORMATIVE DIGEST/POLICY only if the state in which the lands are located and the Indian tribe having jurisdiction over the Indian lands
STATEMENT OVERVIEW
enter into a Tribal-State Compact governing gaming
activities on the Indian lands of the Indian tribe with Summary of Existing Laws and Regulations
the approval of the Secretary of the Interior. (25 U.S.C.
Federal Law § 2710(d).) The act provides for a Tribal-State Gaming In Bracker, supra, 448 U.S. 136, the United States Compact to include provisions for "the assessment Supreme Court explained that federally recognized by the State of such activities in such amounts as Indian tribes retain attributes of sovereignty over both are necessary to defray the costs of regulating such their members and their territory, as a separate people, activity" and "taxation by the Indian tribe of such with the power of regulating their internal and social activity in amounts comparable to amounts assessed relations, and thus far are not brought under the laws by the State for comparable activities." (Ibid.) The of the United States or the states in which the tribes act authorizes Indian tribes to enter into management reside. The Court also held that: contracts for the operation and management of gaming • Federal law preempts a state's authority to tax an activities with the approval of the Chairman of the activity undertaken on a "reservation or by tribal National Indian Gaming Commission. (25 U.S.C. members" (id. at page 143) in circumstances § 2711) The act declares that its purpose is to advance where the tax unlawfully infringes on the right of three principal goals:
federally recognized Indian tribes "to make their
• Tribal economic development;
own laws and be ruled by them" (id. at page 142
[quoting from Williams v. Lee (1959) 358 U.S. 217, • Tribal self-sufficiency; and 220]; and • Strong tribal governments. (25 U.S.C. §2702.) "[T]here is no rigid rule by which to resolve The California Gambling Control Commission's the question whether a particular state law may (CGCC's) website at http://www.cgcc.ca.gov indicates be applied to an Indian Reservation or to tribal that the "State of California has signed and ratified members" (id. at page 142), and state taxation is Tribal-State Gaming Compacts with 74 Tribes and preempted when "a particularized inquiry into there are Secretarial Procedures in effect with three the nature of the state, federal, and tribal interests Tribes." In addition, "[t]here are currently 64 casinos at stake" indicates that, in a "specific context, the operated by 62 Tribes" in the state. The CGCC's exercise of state authority would violate federal website also contains links to California's current law" (id. at page 145) because it unlawfully Tribal-State Gaming Compacts, which generally require tribes operating casinos to pay the state a
Indian tribes "to make their own laws and be portion of their gaming revenues and make specified ruled by them." (Id. at page 142.) payments to be shared with non-gaming or limited Therefore, the Department must review the facts gaming tribes. and circumstances applicable to the imposition Further, federal law has generally provided for of California's sales and use taxes on activities Indian tribes to enter into contracts, including leases, conducted on Indian reservations or by tribal members concerning restricted Indian lands with the approval of to determine whether the state, federal, and tribal the Secretary of the Interior. (See, e.g., 25 U.S.C. §§ 81, interests at stake require federal preemption of the 85, 415.) However, the passage of the Helping Expedite taxes under a Bracker analysis. and Advance Responsible Tribal Home Ownership In addition, on February 25, 1987, the United Act (HEARTH Act) of 2012 amended the Indian States Supreme Court decided that neither the State Long-Term Leasing Act of 1955 (25 U.S.C. § 415) and of California nor Riverside County could regulate the created a voluntary alternative land leasing process for 1548
CALIFORNIA REGULATORY NOTICE REGISTER 2020, VOLUME NUMBER 50-Z restricted Indian lands under an Indian tribe's leasing Indian land and double-taxation factors supporting regulations that have been submitted to, and approved preemption under a Bracker analysis].) by, the Secretary of the Interior. Also, the Bureau of Administration and Enforcement of California's Sales Indian Affairs (BIA) issued its own leasing regulations and Use Taxes that interpret and explain the HEARTH Act. These
regulations are expressly intended to "promote leasing California's Sales and Use Tax Law (RTC, § 6001 et seq.) was administered and enforced by the Board.
on Indian land for housing, economic development,
and other purposes" (25 C.F.R. § 162.001(a)) and they However, on June 27, 2017, the Governor approved AB 102, which added part 8.7 (commencing with section
state that:
15570) to division 3 of title 2 of the Government
Subject only to applicable Federal law, activities Code (part 8.7). Part 8.7 established the Department under a lease conducted on the leased premises (Government Code, § 15570) and transferred most of are not subject to any fee, tax, assessment, levy, or the Board's former duties, powers and responsibilities other charge (e.g., business use, privilege, public to the Department, operative July 1, 2017, including utility, excise, gross revenue taxes) imposed the Board's former duties, powers, and responsibilities by any State or political subdivision of a State. related to the administration and enforcement of Activities may be subject to taxation by the Indian the Sales and Use Tax Law. (Government Code, tribe with jurisdiction. (25 C.F.R. § 162.017(b).) § 15570.22). Part 8.7 provides for the laws prescribing The BIA has previously explained that this the powers, duties and responsibilities transferred preemption provision does not preempt all state to the Department, including the Sales and Use Tax Law, and the regulations adopted under those laws
taxation on leased Indian land but expresses the
BIA's view that when determining whether a state tax to continue in force on and after July 1, 2017. (Ibid.) is preempted on leased Indian land, the federal and Part 8.7 further provides that "whenever any reference tribal interests to be weighed in a Bracker analysis are to the [Board] appears in any statute, regulation, or contract, or in any other code, with respect to any of
strong. Also, in Seminole Tribe of Florida v. Stranburg the functions transferred to the [Department], it shall (lith Cir. 2015) 799 F.3d 1324 (Stranburg), the court be deemed to refer to the [Department]." (Government of appeals explained that this preemption provision Code, § 15570.24). represents the BIA's conclusion regarding the ultimate
application of Bracker and the court of appeals held California's Sales and Use Taxes that it would be inappropriate for a federal court to California's Sales and Use Tax Law imposes sales defer to this provision without performing its own tax on retailers for the privilege of selling tangible "particularized inquiry" under Bracker. (Id. at page personal property at retail. (RTC, § 6051) Unless an 1338; accord, Desert Water Agency v. U.S. Department exemption or exclusion applies, the tax is measured by of the Interior (9th Cir. 2017) 849 F.3d 1250.) a retailer's gross receipts from the retail sale of tangible Furthermore, in Wagnon v. Prairie Band personal property in California. (RTC, §§ 6012, 6051) Potawatomi Nation (2005) 546 U.S. 95, 114 (Wagnon), The sales tax is imposed on retailers, but retailers may collect reimbursement from their customers if their
the United States Supreme Court recognized that
states and Indian tribes sometimes have concurrent contracts of sale so provide. (Civil Code, § 1656.1; jurisdiction to impose taxes and the Court held that a Reg. 1700, Reimbursement for Sales Tax.) state tax is not preempted merely because it decreases When sales tax does not apply, use tax applies to a tribe's revenue. Also, in Wagnon, Justice Ruth Bader the sales price of tangible personal property purchased Ginsburg expressed her view, which was joined in by from a retailer for storage, use, or other consumption Justice Anthony Kennedy, that "as a practical matter" in California, unless a specific exemption or exclusion the two taxes cannot generally coexist because a applies. (RTC, 88 6201, 6401) The use tax is imposed double-taxed venture operates at a disadvantage and on the person actually storing, using, or otherwise that double-taxation is an appropriate factor to consider consuming the property. (RTC, §6202.) However, in determining whether a state tax is preempted under retailers that are engaged in business in this state are a Bracker analysis. (Id. at pages 116-117) In addition, required to collect the use tax from their customers in Stranburg, the court indicated that, while double- and report and pay it to the state. (RTC, § 6203.) taxation is "insufficient to support preemption" alone, Taxation of Meals, Food, and Beverages it may be a factor supporting preemption when there California's Sales and Use Tax Law provides is "extensive and exclusive federal regulation of the an exemption from sales and use tax for sales and activities at issue." (Stranburg, supra, at page 1340; purchases of "food products" for human consumption, see, e.g., Agua Caliente Band of Cahuilla Indians as defined in RTC section 6359. However, as relevant v. Riverside County (C.D. Cal. 2016) 181 F.Supp.3d here, food products do not include carbonated or 725 [comprehensive federal regulation of leases of alcoholic beverages, meals served off or on the 1549
CALIFORNIA REGULATORY NOTICE REGISTER 2020, VOLUME NUMBER 50-Z retailer's premises, food products sold in a form the subdivision provides that on-reservation "Indian suitable for consumption on the seller's premises when retailers selling meals, food or beverages at eating and the 80-80 rule applies, and hot prepared food products, drinking establishments are not required to collect use including combinations of hot and cold items sold for tax on the sale of meals, food or beverages that are sold a single price. (RTC, § 6359, subdivisions (b)(3) and for consumption on an Indian reservation" because (d)(1), (6), (/).) Theretore, Regulation 1603, laxable the Board previously "determined that, since [the] Sales of food Products, implements, interprets, and adoption of Regulation 1616(d) in 1978, federal court makes specific RTC section 6359 by prescribing the decisions [footnote omitted] preclude the imposition application of California's sales and use taxes to sales of state tax collection obligations upon on-reservation and purchases of meals, food, and beverages. tribal retailers selling meals, food and beverages to Regulation 1616, Federal Areas non-Indians, when the meals, food and beverages RTC section 6352 provides that California's sales are sold for consumption at eating and drinking and use taxes do not apply to transactions that the establishments on the reservation." (Addendum to the state is prohibited from taxing under federal law or final statement of reasons for the 2003 amendments the California Constitution. Regulation 1616, Federal to Regulation 1616.) Therefore, under the current Areas, was originally adopted in 1945 as a restatement provisions of Regulation 1616, subdivision (d)(3), of previous sales and use tax rulings regarding California sales tax does not generally apply to and transactions that involved the United States military. California use tax is not collected from purchasers In 1978, subdivision (d) was added to the regulation on an Indian retailer's sales of meals, food, or to prescribe the application of tax to the sale and use beverages from an eating or drinking establishment of tangible personal property on Indian reservations. on a reservation for consumption on the reservation.
As relevant here, Regulation 1616, subdivision (d)(2), However, tax generally applies to such sales by non- currently provides that the term reservation "includes Indian retailers, unless the sales are to Indians residing reservations, rancherias, and any land held by the on the same reservation where the sales are made.
United States in trust for any Indian tribe or individual Effects, Objectives, and Benefits of the Proposed Indian." And, the Department's Legal Division agrees Amendments with the August 26, 1996, memorandum supporting Indian casinos located in California commonly offer Sales and Use Tax Annotation 305.0024.250 (8/26/96), food and beverage services to their customers, and the in which the Board's Legal Department concluded food and beverage services are sometimes operated that even though Regulation 1616 uses the term by non-Indian retailers who are leasing space in the "reservation," it is clear that its provisions that apply casinos, in accordance with federal law, including the to reservations "should apply to all Indian country" as HEARTH Act, and are required to pay a tribal sales tax defined in section 1151 of title 18 of the United States with regard to their sales of meals, food, and beverages Code. (Annotations are summaries of the conclusions in the casinos. The Board's Legal Department reached in selected legal rulings of counsel and do not performed a Bracker analysis to determine whether have the force and effect of law (Reg. 35101).) federal law preempts the imposition of California sales Also, based upon past analyses of how federal law tax on sales of meals, food, and beverages by, and preempts California's sales and use taxes, Regulation use tax on purchases of meals, food, and beverages from, such a non-Indian lessee operating an eating
or drinking establishment within an Indian casino.
retailers to non-Indians and Indians not residing on The Board's Legal Department concluded that the the reservation. The subdivision provides that sales tax federal and tribal interests in preempting California's does not apply to non-Indian retailers' on-reservation sales and use taxes outweighed the state's interest in sales to Indians residing on the reservation, and the imposing such taxes when a Tribal casino, operated Indian purchaser is required to pay use tax only if, under a Tribal-State Gaming Compact entered into within the first 12 months following delivery, the in accordance with the IGRA, leases an eating or property is used off a reservation more than it is used drinking establishment, such as a restaurant or bar, on a reservation. The subdivision further provides that to a non-Indian who makes sales of meals, food and sales tax does not apply to any on-reservation sales beverages on site for consumption in the tribal casino, made by Indian retailers, whether to Indians who and the sales are subject to a tribal sales tax. reside on the reservation, non-Indians, or Indians As a result, Board staff determined that there was an who do not reside on the reservation. However, an on- issue (or problem within the meaning of Government reservation Indian retailer is generally responsible for § 11346.2, subdivision (b)(1)) because collecting use tax from non-Indians and Indians not Regulation 1616 is not consistent with the Board's residing on the reservation, unless the on-reservation Legal Department's opinion regarding on-reservation retail sale is otherwise not subject to tax. Furthermore, sales of meals, food, and beverages by non-Indians 1550
CALIFORNIA REGULATORY NOTICE REGISTER 2020, VOLUME NUMBER 50-Z operating eating and drinking establishments, in leased space leased under a written agreement authorized space, in Indian casinos. Board staff determined that under federal law under which an Indian tribe grants it was necessary to amend Regulation 1616 to make a non-Indian the right to operate an establishment on the regulation consistent with the Legal Department's the tribe's reservation, including leases approved by opinion regarding on-reservation sales of meals, food, a tribe pursuant to tribal leasing regulations adopted and beverages by non-Indians operating eating and under the HEARTH Act, leases approved by the drinking establishments, in leased space, in Indian BIA pursuant to 25 Code of Federal Regulations part casinos to have the effect and accomplish the objective 162, and contracts and agreements authorized under of addressing the issue (or problem). Therefore, 25 United States Code section 81 et seg. (contracts Board staff drafted proposed amendments to add new generally) and section 2701 et seq. (gaming contracts). subdivision (d)(3)(B)3 to Regulation 1616 to make it In addition, Board staff received a question from the consistent with the Legal Department's opinion and interested parties about whether Board staff intended Board staff held interested parties meetings in January for the proposed amendments adding subdivision and March of 2016 and March of 2017 to discuss the (d)(3)(B)3 to apply to a non-Indian who leases proposed amendments. property on a reservation, but does not necessarily Scope of Federal Preemption on Indian Reservations lease an existing building or a space in an existing Based on the interested parties' comments and building, for example, where a non-Indian enters discussions at the 2016 and 2017 interested parties into a ground-lease and constructs a building on the meetings, the Board's Legal Department agreed that, leased land. The Board's Legal Department concluded under a Bracker analysis, federal preemption on that it was not aware of any difference between leases Indian reservations goes beyond the boundaries of of a building, space in a building, or property on a Indian casinos. The Board's Legal Department found reservation that would have a significant effect on a that the facts that sales of meals, food, and beverages Bracker analysis. Therefore, Board staff determined are made from leased space on a reservation and for that there was another issue (or problem within the consumption on the reservation where the sales take meaning of Government Code, § 11346.2, subdivision place are both factors supporting a finding of federal (b)(1)) with the scope of the proposed amendments preemption of state sales and use tax on such sales. The adding new subdivision (d)(3)(B)3 to Regulation Board's Legal Department also found that the facts 1616 and Board staff agreed that it was necessary to that such sales are made from and for consumption revise the proposed amendments adding subdivision in a casino operated under IGRA provides further (d)(3)(B)3 to clarify that they apply to a non-Indian support for federal preemption, but that the application operating an establishment in leased space or on ofIGRA is not critical to federal preemption when the leased property on a reservation, to have the effect and sales of meals, food, or beverages are made from leased accomplish the objective of addressing the issue (or space on an Indian reservation and the meals, food, problem). or beverages are for consumption on the reservation. Furthermore, Board staff received a letter dated April Therefore, Board staff determined that there was an 14, 2017, from Mr. Lester J. Marston who represents issue (or problem within the meaning of Government the Chemehuevi Indian Tribe and the Chicken Ranch Code, § 11346.2, subdivision (b)(1) with the scope of Rancheria of Me-Wuk Indians of California, seeking the proposed amendments adding new subdivision further clarification about how to determine whether (d)(3)(B)3 to Regulation 1616 and that it was necessary space or property is "on a reservation" and whether to revise the proposed amendments so that they apply a sublease or revocable permit qualifies as a "lease" to sales of meals, food, and beverages by a non-Indian within the meaning of the proposed amendments. operating an eating or drinking establishment, in The Board's Legal Department discussed these issues leased space, on an Indian reservation, to have the (or problems within the meaning of Government effect and accomplish the objective of addressing the Code, § 11346.2, subdivision (b)(1)) with Mr. Marston issue (or problem). and agreed that it was necessary to make further Types of Federally Authorized Leases on Indian amendments to Regulation 1616 to have the effect and Reservations accomplish the objective of addressing the issues (or Based on the interested parties' comments and problems). Therefore, to help clarify whether space discussions at the 2016 and 2017 interested parties or property is on a reservation, Board staff proposed meetings, the Board's Legal Department concluded to amend subdivision (d)(2) of Regulation 1616, that it was not aware of any difference between which defines "reservation," to provide that the term HEARTH Act leases and other types of federally "reservation" means "Indian country as defined in authorized Indian leases that would have a significant section 1151 of title 18 of the United States Code," effect on a Bracker analysis. Therefore, Board staff so that the definition will now be consistent with the agreed that the amendments should apply to any August 26, 1996, memorandum supporting Sales and 1551
CALIFORNIA REGULATORY NOTICE REGISTER 2020, VOLUME NUMBER 50-Z Use Tax Annotation 305.0024.250 (8/26/96) (discussed because Regulation 1616 is not consistent with the above). Board staff also proposed to add a sentence Board's Legal Department's opinion regarding non- to subdivision (d)(2) to clarify that the phrases "on Indians' purchases of meals, food, and beverages from a reservation" and "on an Indian reservation" mean on-reservation Indian retailers solely for consumption "within the boundaries of a reservation." on the reservation where the purchases are made.
Also, to help clarify whether a sublease or revocable Board staff also proposed to replace the unnumbered permit qualifies as a lease, Board staff revised the paragraph at the end of subdivision (d)(3)(A) of proposed amendments adding new subdivision Regulation 1616 with a new subdivision (d)(3)(A)3 to (d) (3)(B)3 to Regulation 1616 to clarify that they apply provide that "Use tax does not apply to meals, food, to "a non-Indian operating an establishment ... on a and beverages purchased from an Indian retailer at an reservation, pursuant to a lease or sublease" because cating or drinking establishment, such as a restaurant federally authorized leases and subleases both convey or bar, on an Indian reservation when the meals, food, a legal interest in and the right to possess Indian land. and beverages are purchased for consumption on the (25 C.F.R. §8 162.003 and 162.007.) However, Board Indian reservation," to have the effect and accomplish staff did not add a reference to revocable permits to the objective of addressing the issue (or problem). The the proposed amendments. This is because the BIA's new language was based upon Board staff's proposed regulations concluded that federal law preempts the amendments adding new subdivision (d)(3)(B)3 to imposition of state taxes on "activities under a lease maintain consistency. conducted on the leased premises" and the term Reference to Regulation 1603 "lease," as used in the BIA's regulations, does not Board staff's proposed amendments adding new include a revocable permit. (25 C.E.R. §§ 162.003 and subdivision (d)(3)(B)3 to Regulation 1616 originally 162.017.) This is also because the BIA's regulations provided that "tax will apply if the meals, food and indicate that revocable permits do not convey a legal beverages are sold for consumption off" an Indian interest in and the right to possess Indian land. (25 reservation. However, Board staff realized that C.F.R. § 162.003.) there was an issue (or problem within the meaning Indian Retailers of Government Code, §11346.2, subdivision (b)(1)) During the January 26, 2016, interested parties regarding the accuracy of this statement because RTC meeting, Mr. Craig Houghton of Baker Manock & section 6359 provides an exemption from sales and use Jensen indicated that the unnumbered paragraph at tax for sales and purchases of food products for human the end of subdivision (d)(3)(A) of Regulation 1616, consumption. Therefore, Board staff determined that regarding sales of meals, food, and beverages by Indian it was necessary to add a new provision to subdivision retailers, was inconsistent with Board staff's new (d)(3)(B) providing that "Regulation 1603, Taxable proposed amendments regarding non-Indian retailers. Sales of Food Products, prescribes the application Mr. Houghton stated that the proposed wording for of tax to meals, food, and beverages when they are new subdivision (d)(3)(B)3 indicated that both sales sold or purchased for consumption off an Indian and use tax do not apply to non-Indian retailers' sales reservation," to have the effect and accomplish the of meals, food, and beverages for consumption on an objective of addressing the issue (or problem). This is Indian reservation. However, when the unnumbered because Regulation 1603 explains when the exemption paragraph in subdivision (d)(3)(A) is read together in RTC section 6359 applies and there is no need to with subdivision (d)(3)(A)2 of Regulation 1616, the restate the applicable provisions of Regulation 1603 in paragraph indicates that use tax applies to non- Regulation 1616.
Indians' purchases of meals, food, and beverages from Initial Presumption on-reservation Indian retailers for consumption on the Board staff's proposed amendments to Regulation reservation, but the Indian retailers are not required to 1616 were scheduled for discussion during the Board's collect the use tax. June 2016 Business Taxes Committee (B TC) meeting.
Due to Mr. Houghton's comments, the Board's A corresponding 2016 Issue Paper was distributed Legal Department performed a Bracker analysis which detailed staff's position on a number of issues regarding on-reservation purchases of meals, food, raised by interested parties, including the issue (or and beverages from Indian retailers, and concluded problem within the meaning of Government Code, that federal law preempts the imposition of use tax on § 11346.2, subdivision (b)(1)) of how to determine non-Indians' purchases of meals, food, and beverages whether meals, food, and beverages are sold or from on-reservation Indian retailers solely for purchased for consumption on or off a reservation. consumption on the reservation where the purchases The 2016 Issue Paper first proposed that the regulation are made. Therefore, Board staff determined that there establish a rebuttable presumption "that meals, food, was another issue (or problem within the meaning and beverages sold or purchased from an eating or of Government Code, § 11346.2, subdivision (b)(1)) drinking establishment on an Indian reservation in a 1552
CALIFORNIA REGULATORY NOTICE REGISTER 2020, VOLUME NUMBER 50-Z form suitable for immediate consumption are sold or retailers at a competitive disadvantage versus off- purchased for consumption on an Indian reservation," reservation retailers. to have the effect and accomplish the objective of June 2017 B TC Meeting addressing the issue (or problem). The issue paper also In January 2017, Board staff received a letter from noted differences of opinion by a number of Indian the Tribal Alliance of Sovereign Indian Nations tribes and included suggested language from one tribe (TASIN) that generally supported staft's efforts up as an alternative to staff's proposal, which preempted to that point. TASIN is comprised of several tribes state tax on all meals, food, and beverages "furnished who had submitted comments that were noted in the for consumption" on a reservation, regardless of where 2016 Issue Paper. Discussions with TASIN at the time they were consumed. However, just prior to the BTC indicated that all TASIN tribes had withdrawn their meeting, the topic was postponed. previously suggested language noted in the 2016 Issue In addition, the 2016 Issue Paper noted that some
tribes recommended changing "meals, food, and Board staff held a third interested parties meeting on beverages" to "items" in the proposed amendments. March 23, 2017, to discuss its proposed amendments However, Board staff opposed the change. Staff was which largely remained unchanged from those not aware of any federal law or precedent (including presented in the 2016 Issue Paper. Comments made 25 C.F.R. § 162.017(b) as interpreted in Stranburg, by interested parties during the third interested parties supra) that preempts the application of state tax to meeting, like the TASIN letter previously discussed, a non-Indian's sale of an item to a non-Indian for appeared to support staff's proposed amendments, storage, use, or other consumption outside of an including the rebuttable presumption proposed in the Indian reservation and concluded that replacing the 2016 Issue Paper. phrase "meals, food, and beverages" with "items" The proposed amendments to Regulation 1616 were would create confusion rather than provide clarity rescheduled to be discussed with the Board Members to the majority of retailers. Staff did not agree that at the Board's June 20, 2017, BTC Meeting and staff current federal law preempts the imposition of state prepared a 2017 Issue Paper. However, prior to posting tax on all on-reservation sales by non-Indian lessees. the issue paper, a potential issue (or problem within the Staff also determined that the proposed amendments meaning of Government Code, § 11346.2, subdivision were consistent with the regulation's current language (b)(I)) was brought to Board staff's attention regarding clarifying the application of tax to sales of meals, how the rebuttable presumption could be misread by food, and beverages by Indian retailers, which was some non-Indian retailers as exempting all of their unanimously approved by the Board and received a sales from drive-through windows and for off- great deal of support from a number of Indian tribes reservation delivery. As a result, staff reevaluated and their representatives, with some tribes indicating their proposed language and determined that the that the reference to meals, food, and beverages was presumption should be further clarified to eliminate consistent with federal law. any potential confusion and ensure retailers collect Furthermore, the 2016 Issue Paper noted that the taxes that they will be liable for in future audits some tribes contended that Board staff's proposed of such sales. Therefore, Board staff added a second requirement that a tribal tax be imposed on sales by presumption, which provided that "meals, food, and and purchases from non-Indian retailers for California beverages sold or purchased from a drive-through sales and use tax to be preempted was unwarranted window or delivered off a reservation are presumed and that state tax is preempted in all cases, even when to be sold or purchased for consumption off an Indian the tribal government elects not to impose a sales tax reservation," to have the effect and accomplish the or to impose a "0%" tax. Citing Bracker, they asserted objective of addressing the potential issue (or problem) that federal preemption from state tax should apply and presented the modified presumptions to the Board regardless of whether a tribal government imposes as Alternative 2, while the presumption quoted above, its own tax on a sale. They also recommended that which staff no longer supported without the additional the reference to a tribal tax be deleted from the clarification, was presented as Alternative 1. However, proposed amendments. However, the Board's Legal the Board did not agree with Board staff's Alternative Department concluded that it is necessary for a tribe 2 and authorized the Alternative 1 amendments to to impose a tax on transactions between non-Indian Regulation 1616. retailers and non-Indian consumers which occur on Department's Proposed Amendments an Indian reservation, in order for the transactions to Department staff reevaluated the amendments be preempted from state tax under a Bracker analysis. authorized by the Board, but not yet formally proposed This is because when there is no tribal tax imposed, under the Administrative Procedure Act (Government the imposition of a state tax does not result in double Code, § 11340 et seq.), after the authority to administer taxation and does not put on-reservation non-Indian and enforce the Sales and Use Tax Law was transferred 1553
CALIFORNIA REGULATORY NOTICE REGISTER 2020, VOLUME NUMBER 50-Z to the Department on July 1, 2017. Department staff presumption from the year before. They thought the determined that the rebuttable presumption the Board presumptions ignored consumer behavior with regards approved over its staff's objections at the Board's June to "to go" orders, would negatively impact businesses, 2017 BTC meeting is too broad and could confuse and maximized State revenues. some readers. Therefore, the Department decided to Some tribes also disagreed with other aspects of the postpone the formal rulemaking process and continue proposed amendments. A few tribes stated that the to work to clarify the proposed amendments, including State essentially does not have the authority to assess the rebuttable presumption. tax on meals, food, and beverages sold within Indian On July 10, 2018, the Department distributed the territory and that the location of a business should fourth discussion paper regarding the amendments control the determination of whether a state or tribal to Regulation 1616 and held the last interested parties tax applies. Some, including DCR, disagreed with meeting to discuss the amendments on July 25, the requirement that a tribal tax be imposed on the 2018. The paper indicated that Department staff did sale of meals, food and beverages for state tax to be not support the Board-approved presumption. Staff preempted. They saw it as the State encroaching upon recommended revising the presumption so sales or tribal sovereignty. Also, PBLI disagreed with limiting purchases of meals, food, and beverages for delivery the proposed amendments to sales of meals, food, and off an Indian reservation are conclusively presumed beverages, and argued that federal preemption applies to be for off reservation consumption. Additionally, to on-reservation sales of items intended for local staff recommended revising the presumption so that consumption and/or use." meals, food, and beverages sold or purchased on a "to In response to the interested parties concerns, go" basis from a drive-through window or counter Department staff revised its 2018 presumptions, and are rebuttably presumed to be for consumption off reformatted the revised presumptions as subdivision an Indian reservation. Several responses to the 2018 (d)(3)(B)4 of the proposed amendments to Regulation discussion paper and comments made during the 1616. In general, Department staff developed a bright- July 25, 2018, meeting indicated the varying degrees line approach that clarifies that the Department will of disagreement the tribes had with the new revised presume that all meals, food, and beverages sold or presumptions. purchased from an eating or drinking establishment from the Federated Indians of the on an Indian reservation are for consumption on the Graton Rancheria (FIGR), Dry Creek Rancheria, reservation, except meals, food, and beverages sold or Band of Pomo Indians (DCR), and Santa Ynez Band purchased from a drive-through counter or window or of Chumash Indians (SYBCI) primarily disagreed for delivery off the reservation. The Department will with staff's proposed presumptions. They either also presume that meals, food, and beverages sold or wanted certain presumption language to be deleted purchased from an eating or drinking establishment's or suggested alternate presumptions or language. drive-through counter or window are for consumption FIGR recommended removing the presumption for off the Indian reservation. "to go" counter sales or changing the presumption Originally, it was Board staff's position that so "to go" counter sales are generally presumed to meals, food, and beverages sold at an eating be for on-reservation consumption. DCR suggested drinking establishment within a casino on an Indian that the location of delivery should determine where reservation should be presumed to be sold for consumption occurs, Therefore, DCR recommended consumption on an Indian reservation. However, it deleting the presumption for "to go" sales altogether eventually became clear that some casino resorts had and replacing it with a presumption that all meals, restaurants that made "to go" sales, including to go food and beverages sold for delivery on a reservation, sales from drive-through windows. Also, after the whether to a customer seated in a restaurant or proposed amendments were expanded to apply to otherwise, are for on-reservation consumption. on-reservation sales of meals, food, and beverages at SYBCI argued that the presumption for "to go" establishments outside of Indian casinos, it became sales was too broad and burdensome and therefore clear the amendments would apply to several different suggested that there be a presumption that all meals, types of establishments that make "to go" sales, food, and beverages sold on an Indian reservation in including to go sales from drive-through windows, or a form suitable for immediate consumption are for make sales for delivery off reservation. However, staff consumption on an Indian reservation. continued to recognize that some eating and drinking Comments from TASIN, the Agua Caliente Band establishments are located within a larger business on of Cahuilla Indians (ACBCI), and the Pechanga an Indian reservation, such as a casino, casino resort, Band of Luiseño Indians (PBLI) were similar. These zipline course, or golf course, and staff believes that tribes were "troubled" by the revised presumptions customers of these establishments would more likely staff proposed in comparison to the Board-approved than not consume a portion of or their entire to go 1554
CALIFORNIA REGULATORY NOTICE REGISTER 2020, VOLUME NUMBER 50-Z orders within the larger business's food court/guest • The Department amend Regulation 1616, dining areas or within another on-premises location, subdivision (d)(2), to clarify that the term such as a hotel pool or guest room. "reservation" means Indian country as defined Therefore, the revised presumptions in subdivision in section 1151 of title 18 of the United States (d)(3)(B)4 of the proposed amendments to Regulation Code and make the regulation consistent with 1616 presume that most on-reservation sales of meals, the memorandum supporting Sales and Use Tax dan casino, time ours., Annotation 305.0024.250;
The Department add language to Regulation
and golf courses, are for consumption on an Indian 1616, subdivision (d)(2), to clarify that "on a reservation. reservation" and "on an Indian reservation" mean Also, Department staff looked at aerial views and within the boundaries of a reservation; maps showing the boundaries of Indian reservations • The Department replace the unnumbered and the locations of on-reservation businesses that
sell meals, food, and beverages, including Indian sentence at the end of Regulation 1616, subdivision (d)(3)(A), with new subdivision (d)(3)(A)3 to make
casinos. Staff noted that it is typical for a drive-
the regulation consistent with the Board's Legal
through establishment to be located in close proximity Department's Bracker analysis, which concluded to the boundary of a reservation and near city or
that federal law preempts the imposition of state
county streets and roads and major highways which use tax on non-Indians' purchases of meals, are located off-reservation. The review of existing
food, and beverages from on-reservation Indian
businesses and the placement of establishments
retailers solely for consumption on the reservation
with drive-through windows or counters close to or
where the purchases are made;
near the boundaries of Indian reservations led staff
to presume that meals, food, and beverages sold at The Department amend Regulation establishments' drive-through windows or counters subdivision (d)(3)(B)2, and add new subdivision would be consumed off-reservation. (d)(3)(B)3 to Regulation 1616 to make the In addition, the Department's Legal Division regulation consistent with the Board's Legal determined that federal law, including Bracker, does Department's Bracker analyses, which concluded not generally preempt the imposition of state tax on that federal law preempts the imposition of a sale of tangible personal property, including meals, state sales and use taxes on sales and purchases food, and beverages, for delivery off-reservation. of meals, food, and beverages, when sold by Therefore, Department staff did not include a non-Indian operating an eating or drinking presumption regarding off-reservation deliveries in establishment, such as a restaurant or bar, on an the Department's presumptions subdivision. Instead, Indian reservation, pursuant to a lease or sublease, Department staff added language to new subdivision the sales are subject to an Indian tribe's sales or (d)(3)(B)5 of Regulation 1616 to clarify that the use tax, and the meals, food, and beverages are amendments to subdivisions (d)(3)(A)3 and (d)(3)(B)3 sold for consumption on the Indian reservation; of the regulation do not apply to sales for delivery The Department add new subdivision (d)(3)(B) 4 to off an Indian reservation. Also, interested parties Regulation 1616 to establish the presumption that informed Department staff that it is difficult in some all meals, food, and beverages sold or purchased circumstances for retailers to determine if a delivery from an eating or drinking establishment on an location is within Indian territory or not. To specifically Indian reservation are for consumption on the address this issue (or problem within the meaning of reservation, except meals, food, and beverages Government Code, §11346.2, subdivision (b)(1)) and sold or purchased from a drive-through counter case the administrative burden in reporting tax on or window or for delivery off the reservation, and off-reservation deliveries, Department staff included the presumption that meals, food, and beverages provisions in new subdivision (d)(3)(B)5 that permit sold or purchased from an eating or drinking retailers to report their taxable sales for delivery off establishment's drive-through counter or window eservation using a percentage they developed from a are for consumption off the Indian reservation; est period. but also provide that the "test is subject to • new subdivision The Department add
audit, and it is the retailer's responsibility to maintain (d)(3)(B)5 to Regulation 1616 to clarify that records to support that their percentage accurately new subdivisions (d)(3)(A)3 and (d)(3)(B)3 do reflects the taxable percentage." not apply to meals, food, and beverages sold or Memorandum to the Director purchased for delivery off an Indian reservation Department staff subsequently prepared an October and permit on-reservation retailers making off- 25, 2019, memorandum to the Department's Director. reservation deliveries to report their taxable sales The Memorandum recommended that: for delivery off reservation using a percentage 1555
CALIFORNIA REGULATORY NOTICE REGISTER 2020, VOLUME NUMBER 50-Z developed from a test period, which is subject to amendments adding new subdivision (d)(3)(B)3 to audit; and Regulation 1616 are reasonably necessary to have The Department add new subdivision (d)(3)(B)6 the effect and accomplish the objective of addressing to Regulation 1616 to refer readers to Regulation the issue (or problem) created by Regulation 1616 not 1603 because it prescribes the application of state being consistent with the Board's Legal Department's tax to meals, food, and beverages when they are Bracker analyses, which concluded that federal law sold or purchased for consumption off an Indian preempts the imposition of California's sales and use taxes on sales and purchases of meals, food, and
beverages, when sold by a non-Indian operating an
The memorandum recommended that the
eating or drinking establishment, such as a restaurant
Department change "a Indians" to "an Indian" in or bar, on an Indian reservation, pursuant to a lease the first sentence in Regulation 1616, subdivision or sublease, the sales are subject to an Indian tribe's (d)(2), to make the sentence grammatically sales or use tax, and the meals, food, and beverages correct, replace "Board" with "Department" in are sold for consumption on the Indian reservation. the last sentence in Regulation 1616, subdivision The Department determined that stall's recommended (d)(3)(A)2, due to the changes in state government amendments adding new subdivision (d)(3)(B)4 and 5 made by AB 102, and clarify that the first sentence to Regulation 1616 are reasonably necessary to have in Regulation 1616, subdivision (d)(3)(B)I currently the effect and accomplish the objective of addressing refers to sales made to Indians "who reside on a
the issue (or problem of how to determine whether
reservation " The memorandum recommended that the
meals, food, and beverages are sold or purchased for
Department update the name of Regulation 1668 and consumption on or off a reservation, and addressing delete the quotation marks from around the name of the issue (or problem) of determining whether a Regulation 1668 in the second sentence in Regulation delivery location is within Indian territory or not. The 1616, subdivision (d)(3)(C), delete the quotation Department determined that staff's recommended marks from around the name of Regulation 1667 in amendments adding new subdivision (d)(3)(B)6 to the third sentence in Regulation 1616, subdivision Regulation 1616 are reasonably necessary to have the (d)(4)(B), change "ales" to "sales" in the first sentence effect and accomplish the objective of addressing the in Regulation 1616, subdivision (d)(4)(C)1 to correct issue (or problem) of determining whether California's a typographical error, and delete the quotation sales or use taxes apply to meals, food, and beverages marks from around the name of Regulation 1521 in when they are sold or purchased for consumption on an the third sentence in Regulation 1616, subdivision Indian reservation. The Department also determined (d)(4)(C)I. The memorandum also recommended that staff's other recommended amendments to that the Department delete outdated language stating Regulation 1616 are reasonably necessary to have "Items dispensed for 10é or less, see Regulation 1574" the effect and accomplish the objective of updating from Regulation 1616's reference note. the regulation, clarifying the regulation's current Determinations provisions and making them grammatically correct, The Department subsequently decided to propose to and correcting a typographical error. adopt Department stafi's recommended amendments The Department anticipates that the proposed to Regulation 1616. The Department determined that amendments to Regulation 1616 will promote fairness staff's recommended amendments to Regulation 1616, and benefit Indian tribes, on-reservation retailers subdivision (d)(2), are reasonably necessary to have that sell meals, food, and beverages, non-Indians and the effect and accomplish the objective of addressing Indians that do not reside on a reservation that purchase the issue (or problem) about how to determine meals, food, and beverages from on-reservation whether space or property is "on a reservation." The retailers, and the Department by clarifying that:
Department determined that staff's recommended • The term "reservation" means Indian country as amendments adding new subdivision (d)(3)(A)3 to defined in section 1151 of title 18 of the United Regulation 1616 are reasonably necessary to have States Code when used in Regulation 1616; the effect and accomplish the objective of addressing
the issue (or problem) created by Regulation 1616 not Federal law preempts the imposition of state use being consistent with the Board's Legal Department's tax on purchases of meals, food, and beverages on-reservation eating and drinking
Bracker analysis, which concluded that federal law
preempts the imposition of California's use tax on non- establishments operated by Indian retailers solely Indians' purchases of meals, food, and beverages from for consumption on the reservation where the on-reservation Indian retailers solely for consumption purchases are made; and on the reservation where the purchases are made. The • Federal law preempts the imposition of state sales Department determined that staff's recommended and use taxes on sales and purchases of meals, 1556
CALIFORNIA REGULATORY NOTICE REGISTER 2020, VOLUME NUMBER 50-Z food, and beverages, when sold by a non-Indian result in an absorbable $436 one-time cost for the operating an eating or drinking establishment, Department to update its website after the proposed such as a restaurant or bar, on an Indian regulatory action is completed. The Department has reservation, pursuant to a lease or sublease, the also determined that the adoption of the proposed sales are subject to an Indian tribe's sales or use amendments to Regulation 1616 will result in no other tax, and the meals, food, and beverages are sold direct or indirect cost or savings to any state agency, for consumption on the Indian reservation. no cost to any local agency or school district that is In addition, the Department anticipates that the required to be reimbursed under part 7 (commencing proposed amendments to Regulation 1616 with section 17500) of division 4 of title 2 of the benefit Indian tribes by providing opportunities for Government Code, no other non-discretionary cost the Indian tribes to increase their sales and use tax or savings imposed on local agencies, and no cost or revenue, and any additional revenue will likely benefit savings in federal funding to the state. individual tribal members and other individuals
that rely on Indian tribes for governmental services. NO SIGNIFICANT STATEWIDE The Department also anticipates that the proposed ADVERSE ECONOMIC IMPACT DIRECTLY amendments may benefit non-Indian retailers and AFFECTING BUSINESS individual consumers that are non-Indians or Indians
that do not reside on a reservation by reducing the The Department has made an initial determination overall tax burden on their on-reservation sales and that the adoption of the proposed amendments to purchases of meals, food, and beverages. However, Regulation 1616 will not have a significant, statewide the Department does not anticipate that the proposed adverse economic impact directly affecting business, amendments will substantially change the overall including the ability of California businesses to sales and use tax burden on most on-reservation sales compete with businesses in other states. and purchases of meals, food, and beverages and The adoption of the proposed amendments to there is insufficient data to measure the benefits of the Regulation 1616 may affect small business. proposed amendments in dollars.
Furthermore, the Department has determined NO QUANTIFIABLE COST IMPACTS TO that there are no comparable federal regulations PRIVATE PERSONS OR BUSINESSES or statutes to the amendments to Regulation 1616.
Also, the Department has performed an evaluation The Department is not aware of any direct cost of whether the proposed amendments to Regulation impacts that a representative private person would 1616 are inconsistent or incompatible with existing necessarily incur in reasonable compliance with the state regulations and determined that the proposed proposed action. amendments are not inconsistent or incompatible with The Department has determined that the proposed existing state regulations because Regulation 1616 amendments to Regulation 1616 will have some cost is the only regulation that specifies the application impact on eating and drinking establishments, such as of state sales and use tax to sales and purchases of restaurants and bars, operated by non-Indian lessees tangible personal property on Indian reservations. that are located on Indian reservations. However, the Department could not reliably estimate the cost in
NO MANDATE ON LOCAL dollars because the Department could not find any AGENCIES AND SCHOOL DISTRICTS data regarding the number of on-reservation eating and drinking establishments that are operated by non-
The Department has determined that the adoption of Indian lessees or the number of such establishments the proposed amendments to Regulation 1616 will not that are small businesses or data that segregates on- impose a mandate on local agencies or school districts, reservation sales of meals, food, and beverages made including a mandate that requires state reimbursement by Indians from sales made by non-Indians. under part 7 (commencing with section 17500) of Under the proposed amendments, the state's division 4 of title 2 of the Government Code. sales and use taxes will continue to apply to these establishments' sales of taxable meals, food, or
ONE-TIME COST TO THE DEPARTMENT, beverages to a non-Indian or an Indian that does not BUT NO OTHER COST OR SAVINGS TO reside on a reservation from a drive-through counter STATE AGENCIES, LOCAL AGENCIES, AND or window or for delivery off reservation. Therefore, SCHOOL DISTRICTS these establishments will be required to incur some costs to separately track such sales, but the costs
The Department has determined that the adoption should be minimal since the establishments should be of the proposed amendments to Regulation 1616 will tracking these sales already, although not necessarily 1557
CALIFORNIA REGULATORY NOTICE REGISTER 2020, VOLUME NUMBER 50-Z tracking them separately from the establishments' which the action is proposed, would be as effective and less burdensome to affected private persons than
Also, the Department was informed that in some the proposed action, or would be more cost-effective situations it may be difficult for retailers to determine to affected private persons and equally effective in if a delivery location is on or off a reservation. To implementing the statutory policy or other provision reduce the difficulty, the Department proposed that of law than the proposed action. retailers may report their taxable sales for delivery off reservation using a percentage they developed from a
test period without preapproval from the Department. CONTACT PERSONS Therefore, some of the impacted businesses that make
deliveries may incur costs to develop a reporting
percentage from a test period, but the Department Questions regarding the substance of the proposed does not believe the costs are material. amendments to Regulation 1616 should be directed to Mr. Bradley Heller, Tax Counsel IV, by telephone
RESULTS OF THE ECONOMIC at (916) 323-3091, by e-mail at Bradley. Heller@ IMPACT ASSESSMENT REQUIRED BY cdtfa.ca.gov, or by mail at California Department of GOVERNMENT CODE SECTION 11346.3, Tax and Fee Administration, Attn: Bradley Heller, SUBDIVISION (b) MIC:82, 450 N Street, P.O. Box 942879, Sacramento, CA 94279-0082.
The Department assessed the economic impact
of the proposed amendments to Regulation 1616 on Written comments for the Department's California businesses and individuals and determined consideration, written requests to hold a public hearing, that the proposed regulatory action is not a major notices of intent to present testimony or witnesses at regulation, as defined in Government Code section the public hearing, and other inquiries concerning the 11342.548 and California Code of Regulations, title 1, proposed administrative action should be directed section 2000. Therefore, the Department has prepared to Ms. Kim DeArte, Regulations Coordinator, by the economic impact assessment (EIA) required by telephone at (916) 309-5227, by fax at (916) 322-2958, Government Code section 11346.3, subdivision (b)(1), by e-mail at [email protected],or and included it in the initial statement of reasons. In by mail at California Department of Tax and Fee the EIA, the Department determined that the adoption Administration, Attn: Kim DeArte, MIC:50, 450 N of the proposed amendments to Regulation 1616 will Street, P.O. Box 942879, Sacramento, CA 94279- neither create nor eliminate jobs in the state nor result 0050. Ms. DeArte is the designated backup contact in the creation of new businesses or the elimination of person to Mr. Heller.
existing businesses in the state and will not affect the expansion of businesses currently doing business in
the state. WRITTEN COMMENT PERIOD
Furthermore, the Department determined that the
adoption of the proposed amendments to Regulation
1616 will not affect the benefits of the regulation to The written comment period ends at 11:59 pm (PDT) the health and welfare of California residents, worker on January 25, 2021. The Department will consider the safety, or the state's environment. statements, arguments, and/or contentions contained in written comments received by Ms. DeArte at the
NO SIGNIFICANT EFFECT ON postal address, email address, or fax number provided HOUSING COSTS above, prior to the close of the written comment period, before the Department decides whether to
The adoption of the proposed amendments to adopt the proposed amendments to Regulation 1616.
Regulation 1616 will not have a significant effect on The Department will only consider written comments housing costs. received by that time.
DETERMINATION REGARDING However, if a public hearing is held, written ALTERNATIVES comments may also be submitted at the public hearing and the Department will consider the statements,
The Department must determine that no reasonable arguments, and/or contentions contained in written alternative considered by it or that has otherwise
comments submitted at the public hearing before the
been identified and brought to its attention would
Department decides whether to adopt the proposed
be more effective in carrying out the purpose for
amendments to Regulation 1616.
1558
CALIFORNIA REGULATORY NOTICE REGISTER 2020, VOLUME NUMBER 50-Z
AVAILABILITY OF INITIAL AVAILABILITY OF FINAL
STATEMENT OF REASONS AND TEXT OF STATEMENT OF REASONS
PROPOSED AMENDMENTS
If the Department adopts the proposed amendments
The Department has prepared a copy of the text of the
proposed amendments to Regulation 1616 illustrating
its express terms in underline and strikeout format. The Department has also prepared an initial statement of
reasons for the adoption of the proposed amendments to
Regulation 1616, which includes the economic impact
assessment required by Government Code section SUMMARY OF REGULATORY 11346.3, subdivision (b)(1). These documents and all
the information on which the proposed amendments ACTIONS are based are available to the public upon request.
The rulemaking file is available for public inspection
at 450 N Street, Sacramento, California. The express REGULATIONS FILED WITH THE terms of the proposed amendments to Regulation 1616 SECRETARY OF STATE and the initial statement of reasons are also available on the Department's website at www.cdtfa.ca.gov. This Summary of Regulatory Actions lists regula- tions filed with the Secretary of State on the dates in- PUBLIC HEARING dicated. Copies of the regulations may be obtained by contacting the agency or from the Secretary of State,
Archives, 1020 O Street, Sacramento, CA 95814, (916)
The Department has not scheduled a public hearing 653-7715. Please have the agency name and the date to discuss the proposed amendments to Regulation filed (see below) when making a request. 1616. However, any interested person or his or her
authorized representative may submit a written California Horse Racing Board request for an oral hearing no later than 15 days before File # 2020-0928-03 the close of the written comment period, and the Shock Wave Therapy Restricted Department will hold a public hearing if it receives a This rulemaking action by the California Horse timely written request.
Racing Board (Board) adopts procedures for the
possession and use of Extracorporeal Shock Wave
SUBSTANTIALLY RELATED CHANGES Therapy (ESWT) machines within Board racing or PURSUANT TO GOVERNMENT CODE training inclosures.
SECTION 11346.8 Title 04
Adopt: 1866.2
Filed 12/02/2020
The Department may adopt the proposed
Effective 04/01/2021
amendments to Regulation 1616 with changes that
are non-substantial or solely grammatical in nature, Agency Contact: Zachary Voss (916) 263-6036 or sufficiently related to the original proposed text
Department of Health Care Services
that the public was adequately placed on notice that
File # 2020-1019-03
the changes could result from the originally proposed
Adult Residential Treatment Services Provider
regulatory action. If a sufficiently related change is
made, the Department will make the full text of the Requirements proposed regulation, with the change clearly indicated, This action by the Department of Health Care available to the public for at least 15 days before Services (Department) eliminates the requirement that adoption. The text of the resulting regulation will be Mental Health Rehabilitation Centers (MHR Cs), that mailed to those interested parties who commented on also provide Adult Residential Treatment Services, the original proposed regulation orally or in writing obtain and maintain Social Rehabilitation Program or who asked to be informed of such changes. The (SRP) certification in addition to their MHRC licens- text of the resulting regulation will also be available es, because SRP certification is duplicative of MHRO to the public from Ms. DeArte. The Department will licensing requirements and, therefore, unnecessarily consider written comments on the resulting regulation burdensome on MHRCs to obtain and maintain and that are received prior to adoption. on the Department to regulate. 1559