BILL ANALYSIS Ó ------------------------------------------------------------ |SENATE RULES COMMITTEE | SB 646| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ THIRD READING Bill No: SB 646 Author: Pavley (D) Amended: 4/6/11 Vote: 21 SENATE ENVIRONMENTAL QUALITY COMMITTEE : 7-0, 4/4/11 AYES: Simitian, Strickland, Blakeslee, Hancock, Kehoe, Lowenthal, Pavley SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8 SUBJECT : Toxics: enforcement: lead jewelry SOURCE : Author DIGEST : This bill has the effect of parties who were signatories to an amended consent judgment, or parties to a consent payment entitled People vs. Burlington Coat Factory Warehouse Corporation, et al. , to comply with the provisions of the Lead-Containing Jewelry Law. ANALYSIS : Existing federal law : 1. Under the Consumer Product Safety Act, provides protection of the public against unreasonable risks of injury associated with consumer products, largely by developing uniform safety standards for those products. CONTINUED SB 646 Page 2 2. Under the Consumer Product Safety Improvement Act of 2008, enhances safety standards for consumer products, including new specified levels for lead content and increases enforcement and penalty provisions under the authority of the Consumer Product Safety Commission (CPSC). Existing California law : 1. Under Proposition 65 (the Safe Drinking Water and Toxic Enforcement Act of 1986), lists toxins that are known to the state to cause cancer and reproductive damage. Lead is listed on the Proposition 65 list as both a carcinogen and a reproductive toxin. 2. Under the Lead-Containing Jewelry Law: A. Prohibits the manufacture, shipping, sale, or offering for sale of jewelry, children's jewelry, or jewelry used in body piercing that is not made entirely from certain specified materials and specifically restricts the amount of lead that may be contained in jewelry intended for use by both children and adults. The Department of Toxic Substances Control (DTSC) is responsible for enforcement of these provisions. B. Provides that violators of these prohibitions are liable for a civil penalty not to exceed $2,500 a day for each violation to be deposited into the Hazardous Waste Control account to be used to implement and enforce these provisions. C. Specifies that a party that is a signatory to an amended consent judgment, or a party to a consent judgment entered in a specified consolidation action that contains certain terms is deemed to be in compliance with those provisions. This bill deletes those provisions specifying that party that is a signatory to the above-described amended consent judgment, or consent judgment enacted in a specified consolidation action is deemed to be in compliance with CONTINUED SB 646 Page 3 those provisions. Background In June 2004, the California Attorney General (AG) filed a lawsuit against numerous California-based retailers alleging they violated Proposition 65 by failing to warn consumers about the health risks of exposure to the lead contained in certain jewelry. The state's testing found high levels of lead in both the metallic and nonmetallic components of the jewelry targeted in the case. The amounts were well above the level that triggers the requirement to provide a Proposition 65 warning to consumers. In December 2004 the retailers agreed to mediate. The settlement was reached in January 2006. Shortly after the original parties settled the lawsuit, the California Legislature enacted the Lead-Containing Jewelry Law (AB 1681 ÝPavley] Chapter 415, Statues of 2006). The law restricted lead in jewelry for children and adults. In 2008, the Legislature amended the Lead-Containing Jewelry Law (AB 2901 ÝBrownley] Chapter 575, Statutes of 2008). Among other things, AB 2901 amended the definition of jewelry, extended the restrictions to promotional items, required manufacturers to provide compliance certifications, and enhanced DTSC's enforcement authority. According to the Senate Environment Quality Committee analysis, the California Lead-Containing Jewelry Law provides for civil penalties of $2500 a day per violation, intentional violations by manufacturers or suppliers can result in a fine of $5,000 to $100,000 and/or imprisonment, and intentional document falsification can result in a fine of up to $50,000 and/or imprisonment. The provisions of the law are enforced by DTSC. However, parties to the original amended consent judgment or to a subsequent agreement with significantly similar terms are not subject to enforcement under the statute, but rather subject to enforcement per the amended consent judgment which states that the AG enforces the provisions of the consent judgment. The consent judgment provides that the AG may issue a Notice of Violation (NOV) and that the violator must respond within 30 days with a Notice of Election of CONTINUED SB 646 Page 4 Response (NOR). If the NOR is submitted by the violator within 15 days, does not contest the NOV, and a corrective action plan is included, no fine is assessed. If there is failure to comply then there are potential actions to be taken by the AG. There is no penalty for receiving multiple NOVs as long as the violator complies with the consent judgment as specified above. Since enforced, the AG has issue approximately 96 NOVs of which 77 or 80 percent went to 22 repeat offenders. In just the first 3 months on 2011, the AG reports that there have been 16 NOVs issued, all to repeat offenders. Additionally, the original consent judgment stipulates that subsequent agreements may be entered and provide violators with the same protections from penalties as the original consent judgment. There were originally 113 signatories to the original consent judgment. An additional 125 parties have subsequently signed similar agreements. A loophole was created in the original consent judgment by not stipulating a date by which violators could no longer sign on to this type of agreement. Therefore, there continue to be new agreements signed that model the original consent judgment and thereby provide perpetual protection for often repeat violators from enforcement under the statute. Since enactment of the California Lead-Containing Jewelry Law, enforcement has resulted in over 100 documented violations of the lead concentration limit standards involving 150-200 pieces of jewelry. Of these violations, well over two-thirds of them have been settled by the violators with no penalties due. New offenders bypass the statute by signing agreements similar to the original consent judgment and many repeat offenders continue to violate without penalty of fine by simply responding with the required NOR, taking corrective action on that violation and then violating again. FISCAL EFFECT : Appropriation: No Fiscal Com.: No Local: No SUPPORT : (Verified 4/12/11) California Safe Schools CONTINUED SB 646 Page 5 Center for Environmental Health Clean Water Action (called for amendment) Consumer Union (as amended) Environmental Working Group Planning and Conservation League Sierra Club California ARGUMENTS IN SUPPORT : According to the author's office, lead has long been known to be a toxic substance with no biological benefits. It is a powerful neurotoxin, but can affect virtually every organ and system of the body. While lead remains in wide-spread use, it has been removed from many products in order to protect human health. Children are particularly susceptible. In California, concentrations of lead in jewelry were sharply limited with the passage of the California Lead-Jewelry Law. Enforcement of this law began in 2007. The author's office states that review of the enforcement data reveals a significant loophole. Existing law allows an increasing number of businesses to bypass much of the statutory enforcement provisions and avoid financial penalties for violations. DLW:do 4/13/11 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END **** CONTINUED