A color-coded, four-tier system will replace the state's current COVID-19 watchlist in an effort to create a "more stringent, but more steady" process that determines when, and to what extent, counties can move forward with indoor business operations, Gov. Gavin Newsom announced on Friday.

The new tiered system aims to simplify the criteria used down to two metrics — the seven-day daily average of the coronavirus case rate and the positive test rate in each county. It also adds a 21-day buffer period, when counties must remain in a specific tier before they're eligible to move to the next one.

For months, counties have been under the scrutiny of the watchlist (also known as the state's monitoring list) that tracks each region's rate of COVID-19 cases, positive tests, hospitalizations and intensive-care unit admissions. Under the monitoring list, if counties were able to keep these numbers under a certain threshold, e.g. record less than 100 COVID-19 cases per 100,000 county residents in the last 14 days, then the state would grant them the option to reopen more businesses and indoor operations.

Dr. Mark Ghaly, the state's health and human services secretary, who joined Newsom at a noon press conference, said that the state will now focus only on positive test rates and COVID-19 cases because the two statisics provide a more accurate picture of "early transmissions" of the disease, whereas hospitalizations can occur three or four weeks after someone is infected.

One of the biggest criticisms of the system was how quickly counties would be removed or put back on the watchlist from one day to the next, depending on whether they met the state's requirements. It was a source of much frustration and confusion among residents, and particularly business owners, who, at one point, learned they would need to halt indoor operations less than 24 hours after reopening their doors.

How does the new tier-system work?

Under the new system, the four color-coded tiers — purple, red, orange and yellow — allow businesses to slowly resume indoor operations at different levels of capacity based on the two metrics used in each county. (Amusements parks and performing arts or large sporting events with live audiences are the only sectors that are either unaddressed or remain restricted in all the tiers. Newsom suggested these will remain closed to people until further notice.)

For example, tier one — the most restrictive level that's labeled "widespread" and colored purple — represents counties that report a seven-day average of eight or more cases a day per 100,000 residents and/or a positivity rate of more than 8%. Under this tier, all retail stores besides standalone grocery markets can have indoor operations at 25% capacity, while museums and personal care services can only function outdoors. (Personal care services do not include hair salons and barbershops, which are allowed to have indoor operations with modifications under tier one.)

In tier two — colored red and labeled "substantial" — a county needs to report a weekly average of seven or less cases per day and a positivity rate of 5%-8%. By then, retail stores can operate indoors at 50% capacity, personal care services can reopen indoors and museums can open indoors at 25% capacity. (For more details on what businesses can reopen in each tier, go to cdph.ca.gov.)

Counties must stay in the red or orange level for at least 21 days before they are eligible to move to a lower tier. They are not allowed to skip through any tiers, regardless of their qualification. In addition to the three-week buffer period, counties also must report metrics that satisfy the lower tier for two consecutive weeks. These numbers will be assessed by the state every Tuesday, Newsom said.

Similarly, counties can return to a more restrictive tier if they report average cases and/or positive test rates that fall under that category for two weeks straight. Dr. Ghaly added that a concerning increase in hospitalizations will also cause counties to be moved into stricter tiers.

Where do Santa Clara and San Mateo counties stand?

Under the tier system, 38 counties, including Santa Clara and San Mateo counties, will fall under the purple tier, which represents 87% of the state's population, Newsom said.

According to the state's redesigned COVID-19 website, Santa Clara County has 8.6 cases per 100,000 residents, but only a 3.5% positivity rate. San Mateo County reported the same case rate per 100,000 residents, but a positive test rate of 4.8%. Despite having lower positive test rates, the two counties will still be placed in the first tier (purple).

(The conditions of the new system specify that if a county has metrics satisfying two different tiers, the state will place the county under the more restrictive tier.)

With the new state guidelines, both counties announced Friday evening that they will allow indoor malls to reopen at 25% capacity as well as hair salons and barbershops, which have been restricted from indoor operations.

Indoor malls and hair salons can reopen starting Monday, Aug. 31, said a news release from the Santa Clara County Public Health Department, adding that the county-specific modifications still apply to those businesses.

"We have repeatedly said that the spread of the virus in our community is not linked to businesses like hair salons," San Mateo County Manager Mike Callagy said in a statement responding to the new state's criteria. "We are very happy to see them reopen and with the effort of our residents to wear face coverings and avoid large gatherings, we hope to soon move to the next tier and loosen even more restrictions."

Newsom also noted that county health officials still have the authority to implement more stringent conditions for reopening, despite what the statewide tiers outline; however, they're not allowed to be less restrictive than the state.

"If you're a county representative (or) you're a county health officer ... the two things that you should pick up from this presentation that are most impactful is getting that positivity rate down and getting that case rate down," Newsom said. "Those are the two measurements that can move your community forward."

For more information on each county's progress report and which businesses can reopen, visit covid19.ca.gov.

Eviction moratoriums and COVID-19 numbers

The state's COVID-19 testing capacity recently dropped to just less than 100,000 daily tests over a seven-day average. Newsom attributed the decrease to the wildfires, which have impacted around 11 testing laboratories, including OptumServe and Verily.

California's overall positivity rate, however, still dropped slightly from 6.1% on Wednesday to 6% on Friday.

COVID-19 hospitalization and intensive-care unit admissions also decreased to 18% and 19%, respectively.

The governor also fielded a question from a reporter on the state's eviction moratorium bill, also known as the COVID-19 Tenant Relief Act of 2020, and was asked to specify who exactly the bill covers.

Newsom responded that his office is still in the midst of legislative talks and the details were not ironed out in print, but reported that lawmakers reached a compromise.

Find comprehensive coverage on the Midpeninsula's response to the new coronavirus by Palo Alto Online, the Mountain View Voice and the Almanac here.