(a) The determination of whether a proposed development is exempt or categorically excluded, or whether a decision on the proposal would be appealable to the Commission shall be made by the local government as soon as practicable after the application for development or the request for exemption or categorical exclusion within the coastal zone is submitted to the local government. This determination shall be made according to the provisions of the Coastal Act, the certified Local Coastal Program, and Sections 13240-13253 and 13300 et seq., including based upon applicable maps, coastal resources existing at the time of the application or request, categorical exclusions, land use designations, and zoning ordinances.

(b) The local government shall inform the applicant and the Commission district office with jurisdiction over the local government in writing of its determination as soon as practicable and at a minimum prior to providing the required notice for any potential permit action and prior to allowing any activity without a permit (for exemptions and exclusions), with reference to any notice and hearing requirements.

(c) The executive director may review the local government determination independently, or at the request of the applicant or an interested person(s). If the executive director reviews the local government determination, he or she shall inform the local government of said review, and the local government shall supply, at a minimum, a copy of the application or request and a copy of its determination to the executive director. Within 30 working days, unless extended by the executive director for good cause, the executive director shall notify the local government, the applicant, and the interested person(s) who requested review, if any, in writing of his or her determination regarding whether the proposed development or request qualifies for exemption or categorical exclusion, or whether local government decisions on a permit for the proposed development would be appealable to the Coastal Commission.

(d) If the executive director's determination regarding the appropriate permitting process for the proposed development or request is the same as the local government's, then that determination shall apply to that proposed development or request, and there is no further challenge available. If the executive director's determination conflicts with the local government's determination and the respective staffs are not able to resolve the conflict and reach agreement on the appropriate permitting process for the proposed development or request in a reasonable time, the executive director shall schedule a hearing as soon as practicable for the Commission to resolve the dispute. Only the local government, the applicant, and the interested person(s), if any, who made the request for review may testify at the hearing. Any person may submit written comments. The Commission shall make findings to support its decision, which shall be provided to the local government.