BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                      



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          |SENATE RULES COMMITTEE            |                   SB 646|
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                                 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.

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          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 

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          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 

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          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

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          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

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