BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 227
                                                                  Page  1

          Date of Hearing:   May 15, 2013

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                  Mike Gatto, Chair

                      AB 227 (Gatto) - As Amended:  May 8, 2013 

          Policy Committee:                              E.S.&T.M.Vote:   
          7-0
                        Judiciary                             10-0

          Urgency:     Yes                  State Mandated Local Program:  
          Yes    Reimbursable:              No

           SUMMARY  

          This bill provides, in specified circumstances, an alternative  
          to avoid litigation regarding alleged violations of the Safe  
          Drinking Water and Toxic Enforcement Act (Prop. 65).  
          Specifically, this bill:

          1)Prohibits a person serving a notice of an alleged Prop. 65  
            violation-specifically the failure of a person or entity to  
            provide a required exposure warning-from bringing an action or  
            recovering any settlement, if all of the following conditions  
            are met:

             a)   The alleged violation involves exposure to any of the  
               following: 

               i)     Alcoholic beverages, or a toxic chemical necessary  
                 for the preparation of food or beverages sold for  
                 immediate consumption.

               ii)    Tobacco smoke, where smoking is permitted on the  
                 premises.

               iii)   Chemicals in engine exhaust inside a facility intend  
                 for parking noncommercial vehicles.

             b)   Within 14 days of receiving the notice, the alleged  
               violator has:

               i)     Corrected the violation.









                                                                  AB 227
                                                                  Page  2

               ii)    Paid a civil penalty of $500, to be adjusted  
                 annually for inflation.

               iii)   Served to the person filing the original notice a  
                 statement, signed under penalty of perjury, describing  
                 the actions taken to correct the violation.

             c)   The alleged violator has not been served a notice in the  
               previous five years regarding lack of warning regarding the  
               same exposures in the same facilities.

           FISCAL EFFECT  

          1)Minor nonreimbursable costs to the extent bill leads to  
            allegations and convictions of perjury.

          2)Minor GF savings from a reduction in court caseloads, and  
            minor revenue from civil penalties, 75% of which would go to  
            the Prop. 65 enforcement fund.

           COMMENTS  

           1)Background  . Proposition 65, approved by the voters in 1986,  
            prohibits any person, in the course of doing business, from  
            knowingly and intentionally exposing any individual to a  
            chemical known to the state to cause cancer or reproductive  
            toxicity without giving a specified warning, or from knowingly  
            discharging or releasing such a chemical into water or any  
            source of drinking water. The act imposes civil penalties upon  
            persons who violate those prohibitions, and provides for the  
            enforcement of those prohibitions by the Attorney General, a  
            district attorney, or specified city attorneys or prosecutors,  
            and by any person in the public interest.

           2)Purpose  . According to the author, some parties have taken  
            advantage of provisions in the proposition to ensnare  
            businesses in lawsuits, with the hope of obtaining settlement  
            payments. 

            The author states, "These lawsuits are instigated by parties  
            who target businesses that, for various reasons, have  
            neglected to display the proper Prop. 65 warning sign?  
            Businesses such as restaurants or coffee shops or bars -  
            places that must provide Prop. 65 warnings for serving baked  
            goods, beer, wine, or coffee, because these everyday things  








                                                                  AB 227
                                                                  Page  3

            happen to contain substances deemed to pose some health risks  
            - should be helped to comply with the intent of the law."

            AB 227 precludes litigation as well as the payment of money in  
            settlement for specified alleged violations relating to  
            exposure to alcohol and food-related chemicals, tobacco smoke,  
            and vehicle exhaust, if the alleged violator has taken  
            appropriate remedial measures and has not committed other  
            prior offenses.  The measure further provides that prescribed  
            notices must advise the alleged violators of the law in a  
            clear and reasonable fashion, and sets forth a mechanism for  
            resolution of disputes regarding the application of these  
            provisions and potential sanctions against the plaintiff.

           Analysis Prepared by  :    Chuck Nicol / APPR. / (916) 319-2081