BILL ANALYSIS Ó 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