BILL ANALYSIS                                                                                                                                                                                                    






                             SENATE JUDICIARY COMMITTEE
                             Senator Noreen Evans, Chair
                              2013-2014 Regular Session


          AB 227 (Gatto)
          As Amended June 19, 2013
          Hearing Date: June 25, 2013
          Fiscal: Yes
          Urgency: Yes
          TH


                                        SUBJECT
                                           
                             Proposition 65: Enforcement

                                      DESCRIPTION  

          The Safe Drinking Water and Toxic Enforcement Act of 1986  
          (Proposition 65) 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, except as specified.   
          Failure to comply with the act exposes a business to civil  
          penalties of up to $2,500 per day.  The act can be enforced by  
          the Attorney General and other designated public prosecutors,  
          but it also contains a citizen suit provision allowing any  
          impacted person to bring an enforcement action in the public  
          interest.

          This bill would prohibit an enforcement action from being filed  
          by a person in the public interest, and would prohibit the  
          recovery of settlement payments or fee reimbursements, in cases  
          where a notice sent to an alleged violator of Proposition 65  
          alleges a failure to provide a clear and reasonable warning for  
          certain specified exposures and, within 14 days after receiving  
          the notice, the alleged violator corrects the alleged violation,  
          pays a civil penalty in the amount of $500 per facility or  
          premises, and serves on the person who sent the notice a  
          specified written statement, signed under penalty of perjury,  
          that fully describes the corrective action taken to address the  
          alleged violation.  This bill would limit the above prohibition  
          to:
                                                                (more)



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           an exposure to alcoholic beverages that are consumed on the  
            alleged violator's premises to the extent on-site consumption  
            is permitted by the law;
           an exposure to a chemical known to the state to cause cancer  
            or reproductive toxicity to the extent the chemical is formed  
            by necessary preparation of food or beverages which are sold  
            on the alleged violator's premises for immediate consumption  
            on or off the premises;
           an exposure to environmental tobacco smoke caused by the entry  
            of persons (other than employees) on premises owned or  
            operated by the alleged violator where smoking is permitted at  
            any location on the premises; or
           an exposure to chemicals known to the state to cause cancer or  
            reproductive toxicity in engine exhaust, to the extent the  
            exposure occurs inside a facility owned or operated by the  
            alleged violator and primarily intended for parking  
            noncommercial vehicles.

                                      BACKGROUND  

          The Safe Drinking Water and Toxic Enforcement Act of 1986,  
          enacted by California's voters as Proposition 65, is a "right to  
          know" statute that requires companies that "expose consumers to  
          carcinogens or reproductive toxins to provide a reasonable and  
          clear warning."  (Ctr. for Self-Improvement & Cmty. Dev. v.  
          Lennar Corp. (2009) 173 Cal.App.4th 1543, 1550.)  In general  
          terms, it 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 first giving a specified warning, or from  
          knowingly discharging or releasing these chemicals into the  
          water or any source of drinking water.  Pursuant to the act, the  
          state publishes an annual list of chemicals known to cause  
          cancer, birth defects, or other reproductive harm.  This list of  
          dangerous chemicals has grown to include approximately 800  
          entries since it was first published in 1987, and contains a  
          wide range of both naturally occurring and synthetic chemicals.   
          According to the California Office of Environmental Health  
          Hazard Assessment (OEHHA), the executive agency that administers  
          the act, listed chemicals include "additives or ingredients in  
          pesticides, common household products, food, drugs, dyes, or  
          solvents," as well as chemicals used in manufacturing and  
          construction, or that "may be byproducts of chemical processes,  
          such as motor vehicle exhaust."  (OEHHA, Proposition 65 in Plain  
          Language!   
          [as of June 17, 2013].)
                                                                      



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          Through Proposition 65's mandatory notification provision,  
          California residents are informed about the presence of  
          chemicals in the products they purchase, in their homes or  
          workplaces, or that are released into the environment.  OEHHA  
          reports:

               Since it was passed in 1986, Proposition 65 has provided  
               Californians with information they can use to reduce their  
               exposures to listed chemicals that may not have been  
               adequately controlled under other [s]tate or federal laws.   
               This law has also increased public awareness about the  
               adverse effects of exposures to listed chemicals.  For  
               example, Proposition 65 has resulted in greater awareness  
               of the dangers of alcoholic beverage consumption during  
               pregnancy.  Alcohol consumption warnings are perhaps the  
               most visible health warnings issued as a result of  
               Proposition 65.

               Proposition 65's warning requirement has provided an  
               incentive for manufacturers to remove listed chemicals from  
               their products.  For example, trichloroethylene, which  
               causes cancer, is no longer used in most correction fluids;  
               reformulated paint strippers do not contain the carcinogen  
               methylene chloride; and toluene, which causes birth defects  
               or other reproductive harm, has been removed from many nail  
               care products.  In addition, a Proposition 65 enforcement  
               action prompted manufacturers to decrease the lead content  
               in ceramic tableware and wineries to eliminate the use of  
               lead-containing foil caps on wine bottles . . . Proposition  
               65 has also succeeded in spurring significant reductions in  
               California of air emissions of listed chemicals, such as  
               ethylene oxide, hexavalent chromium, and chloroform.   
               (OEHHA, Proposition 65 in Plain Language!  
                [as  
               of June 17, 2013].)

          Proposition 65 is enforced, in part, by a civil penalty  
          provision that allows the assessment of up to $2,500 per day  
          upon persons who violate its prohibitions.  The California  
          Attorney General acts as the primary enforcement agency under  
          the act, but other public prosecutors (like district attorneys)  
          can bring enforcement suits as well.  Additionally, the act has  
          a citizen suit provision that permits any person to bring a  
          civil action against an alleged violator in the public interest.

                                                                      



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          For the most part, the citizen suit provision has helped lower  
          the barriers and costs to implementing Proposition 65 by  
          allowing individuals, advocacy groups, and non-governmental  
          organizations to initiate enforcement actions without drawing  
          upon the time and resources of public prosecutors.  However,  
          private individuals could arguably use the citizen suit  
          provision to force businesses into unfavorable or unfair  
          monetary settlements.  The author has produced three examples  
          where private individuals secured settlements of several  
          thousand dollars from small businesses that committed minor  
          violations of the act.  In the first example, a Santa Monica bar  
          entered into a $5,500 settlement over an alleged failure to post  
          a Proposition 65 warning pertaining to the sale of alcoholic  
          beverages.  In the second example, a bar in Norwalk entered into  
          a $7,000 settlement, also over an alleged failure to post a  
          Proposition 65 warning pertaining to the sale of alcoholic  
          beverages.  Finally, in the third example, a supermarket in  
          Berkeley agreed to pay a $4,000 settlement plus $21,000 in  
          attorney's fees and costs over alleged failures to post  
          Proposition 65 warnings pertaining to "flame-cooked ground beef  
          products," also known as hamburgers.  In each case, the author  
          suggests that these businesses agreed to the settlements in  
          order to avoid the cost of litigation.

          This bill would restrict the ability of individuals to bring  
          citizen suit enforcement actions under Proposition 65 for  
          alleged failures to provide reasonable and clear warnings, when  
          the warning pertains to one of four situations commonly found in  
          retail establishments, and the alleged violator takes immediate  
          corrective action upon notice of the violation.  Specifically,  
          the bill would prohibit enforcement actions from being filed by  
          a person in the public interest, and would prohibit the recovery  
          of settlement payments or fee reimbursements, in cases where a  
          notice sent to an alleged violator of Proposition 65 alleges a  
          failure to provide a clear and reasonable warning for certain  
          specified exposures (see Comment 2) and, within 14 days after  
          receiving the notice, the alleged violator corrects the alleged  
          violation, pays a civil penalty in the amount of $500 per  
          facility or premises, and serves on the person who sent the  
          notice a specified written statement, signed under penalty of  
          perjury, that fully describes the corrective action taken to  
          address the alleged violation.

                                CHANGES TO EXISTING LAW
           
           Existing law  , the Safe Drinking Water and Toxic Enforcement Act  
                                                                      



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          of 1986 (Proposition 65), states that no person in the course of  
          doing business shall knowingly discharge or release a chemical  
          known to the state to cause cancer or reproductive toxicity into  
          water or onto or into land where such chemical passes or  
          probably will pass into any source of drinking water,  
          notwithstanding any other provision or authorization of law,  
          except as provided.  (Health & Saf. Code Sec. 25249.5.)

           Existing law  states that no person in the course of doing  
          business shall knowingly and intentionally expose any individual  
          to a chemical known to the state to cause cancer or reproductive  
          toxicity without first giving clear and reasonable warning to  
          such individual, except as provided.  (Health & Saf. Code Sec.  
          25249.6.)

           Existing law  exempts from the above warning requirements an  
          exposure for which the person responsible can show that the  
          exposure poses no significant risk assuming lifetime exposure at  
          the level in question for substances known to the state to cause  
          cancer, and that the exposure will have no observable effect  
          assuming exposure at one thousand (1,000) times the level in  
          question for substances known to the state to cause reproductive  
          toxicity.  (Health & Saf. Code Sec. 25249.10(c).)

           Existing law  provides that the Governor shall cause to be  
          published a list of those chemicals known to the state to cause  
          cancer or reproductive toxicity within the meaning of the act,  
          and shall cause such list to be revised and republished in light  
          of additional knowledge at least once per year.  (Health & Saf.  
          Code Sec. 25249.8(a).)

           Existing law  provides that any person who violates the above  
          provisions shall be liable for a civil penalty not to exceed  
          two-thousand five hundred dollars ($2,500) per day for each  
          violation in addition to any other penalty established by law.   
          In assessing the amount of a civil penalty, a court must  
          consider: the nature and extent of the violation; the number of,  
          and severity of, the violations; the economic effect of the  
          penalty on the violator; whether the violator took good faith  
          measures to comply with this chapter and the time these measures  
          were taken; the willfulness of the violator's misconduct; the  
          deterrent effect that the imposition of the penalty would have  
          on both the violator and the regulated community as a whole; and  
          any other factor that justice may require.  (Health & Saf. Code  
          Sec. 25249.6(a), (b).)

                                                                      



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           Existing law  provides that actions may be brought to enforce the  
          Safe Drinking Water and Toxic Enforcement Act of 1986  
          (Proposition 65) by the Attorney General in the name of the  
          people of the State of California, by certain specified public  
          prosecutors, and by any person in the public interest.  (Health  
          & Saf. Code Sec. 25249.6(c), (d).)

           Existing law  provides that, for actions brought by a person in  
          the public interest, the action shall be commenced at least 60  
          days from the date that the person has given notice of an  
          alleged violation that is the subject of the private action to  
          the Attorney General and the public prosecutor in whose  
          jurisdiction the violation is alleged to have occurred, and to  
          the alleged violator.  If the notice alleges a violation of the  
          required warning provisions of the act, the notice shall include  
          a certificate of merit executed by the noticing party or their  
          attorney.  The certificate of merit shall state that the person  
          executing the certificate has consulted with one or more persons  
          with relevant and appropriate experience or expertise who has  
          reviewed facts, studies, or other data regarding the exposure to  
          the listed chemical that is the subject of the action, and that,  
          based on that information, the person executing the certificate  
          believes there is a reasonable and meritorious case for the  
          private action.  An action may not be commenced by a person in  
          the public interest if the Attorney General or a specified  
          public prosecutor has commenced and is diligently prosecuting an  
          action against the alleged violator.  (Health & Saf. Code Sec.  
          25249.6(d).)

           Existing law  permits amendments to the Safe Drinking Water and  
          Toxic Enforcement Act of 1986 (Proposition 65) provided they are  
          passed in each house of the Legislature by a two-thirds vote and  
          further the act's purposes.  (Initiative Measure, Proposition  
          65, Sec. 7, Nov. 4, 1986.)

           This bill  would prohibit any person who serves a notice of an  
          alleged violation of Proposition 65 from filing an action in the  
          public interest against an alleged violator, or from recovering  
          from the alleged violator in a settlement any payment in lieu of  
          penalties or any reimbursement for costs and attorney's fees,  
          when the following conditions are met:
           the notice of alleged violation was served on or after the  
            effective date of the statute adding this provision;
           the notice alleges that the alleged violator failed to provide  
            a clear and reasonable warning regarding one or more of the  
            following:
                                                                      



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             o    an exposure to alcoholic beverages that are consumed on  
               the alleged violator's premises to the extent on-site  
               consumption is permitted by the law;
             o    an exposure to a chemical known to the state to cause  
               cancer or reproductive toxicity to the extent the chemical  
               is formed by necessary preparation of food or beverages  
               which are sold on the alleged violator's premises for  
               immediate consumption on or off the premises;
             o    an exposure to environmental tobacco smoke caused by the  
               entry of persons (other than employees) on premises owned  
               or operated by the alleged violator where smoking is  
               permitted at any location on the premises; or
             o    an exposure to chemicals known to the state to cause  
               cancer or reproductive toxicity in engine exhaust, to the  
               extent the exposure occurs inside a facility owned or  
               operated by the alleged violator and primarily intended for  
               parking noncommercial vehicles;
           within 14 days after service of the notice, the alleged  
            violator has done all of the following:
             o    corrected the alleged violation;
             o    agreed to pay a civil penalty for the alleged violation  
               in the amount of five hundred dollars ($500), per facility  
               or premises where the alleged violation occurred, of which  
               75 percent shall be deposited in the Safe Drinking Water  
               and Toxic Enforcement Fund, and 25 percent shall be paid to  
               the person that served the notice;
             o    notified, in writing, the person that served the notice  
               of the alleged violation, that the violation has been  
               corrected.  The written notice shall include a notice of  
               compliance approved by the Judicial Council and a  
               photograph or photocopy of the true and correct warning;  
               and
           within 30 days of the receipt of that notice, the alleged  
            violator delivers the civil penalty to the person that served  
            the notice.  The person that served the notice of violation  
            shall remit the portion of the penalty due to the Safe  
            Drinking Water and Toxic Enforcement Fund within 30 days of  
            receipt of the funds from the alleged violator.

           This bill  would require a notice of alleged violation subject to  
          these provisions to prominently include both of the following:
           a clear and reasonable description of the terms of this bill,  
            including a notification that an alleged violator may not be  
            liable if the business has fewer than 10 employees; and
           a notice of compliance, approved by the Judicial Council, that  
            states "I hereby swear, under penalty of perjury, that I have  
                                                                      



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            received a notice of violation of Section 25249.6 and have  
            taken the following steps to comply with Section 25249.7."

           This bill  states that it shall not prevent the Attorney General  
          or specified public prosecutors from filing an action against an  
          alleged violator of this act.

                                        COMMENT
           
          1.  Stated need for the bill  
          
          The author writes:
          
               Prop. 65, the Safe Drinking Water and Toxic Enforcement  
               Act, was enacted by ballot initiative in 1986.  It was  
               intended to protect Californians and their drinking water  
               from chemicals known to cause cancer, birth defects or  
               other reproductive harm, and to inform citizens about  
               exposure to such chemicals.

               Since its enactment, Prop. 65 has been an effective tool to  
               keep toxic chemicals out of the state's water supplies and  
               has raised awareness about possible exposure to  
               carcinogens.  Unfortunately, there have been some who have  
               taken advantage of provisions in the proposition to ensnare  
               businesses in lawsuits, with the hope of obtaining  
               settlement payments that were never contemplated by the  
               voters when they passed Prop. 65.

               These lawsuits are instigated by parties who target  
               businesses that, for various reasons, have neglected to  
               display the proper Prop. 65 warning sign.  Prop. 65 was  
               motivated by voters' laudable wish to inform and protect  
               Californians from the potential exposure to dangerous  
               chemicals, not as a money-making venture.  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 happen to  
               contain substances deemed to pose some health risks --  
               should be helped to comply with the intent of the law.

               Many of these lawsuits never get to a courtroom.  They are  
               settled out of court, sometimes for tens of thousands of  
               dollars, because business owners do not have the means to  
               hire attorneys, and fear becoming entangled in protracted  
               legal proceedings that could result in significant damages  
                                                                      



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               and attorney's fees.

               AB 227 will return Prop. 65 to what voters intended it to  
               do: punish violators who pollute our state's waterways or  
               expose workers to dangerous carcinogens and to inform  
               consumers of the risks in products they may purchase.

          2.  Enforcement process created by this bill  

          This bill would create a new citizen suit enforcement process  
          for alleged Proposition 65 violations where a business is  
          alleged to have failed to provide a clear and reasonable warning  
          to patrons regarding one or more of the following:
           an exposure to alcoholic beverages that are consumed on the  
            alleged violator's premises to the extent on-site consumption  
            is permitted by the law;
           an exposure to a chemical known to the state to cause cancer  
            or reproductive toxicity to the extent the chemical is formed  
            by necessary preparation of food or beverages which are sold  
            on the alleged violator's premises for immediate consumption  
            on or off the premises;
           an exposure to environmental tobacco smoke caused by the entry  
            of persons (other than employees) on premises owned or  
            operated by the alleged violator where smoking is permitted at  
            any location on the premises; or
           an exposure to chemicals known to the state to cause cancer or  
            reproductive toxicity in engine exhaust, to the extent the  
            exposure occurs inside a facility owned or operated by the  
            alleged violator and primarily intended for parking  
            noncommercial vehicles.

          If this bill were chaptered, a private person who serves a  
          notice of an alleged violation within one of the four categories  
          listed above would be precluded from commencing an enforcement  
          action in court, or from recovering any settlement payments,  
          penalties, costs, or attorney's fees, so long as the alleged  
          violator performs the following three tasks within 14 days of  
          receiving the notice:
           corrects the alleged violation;
           agrees to pay a civil penalty for the alleged violation in the  
            amount of five hundred dollars ($500), per facility or  
            premises where the alleged violation occurred; and
           notifies, in writing, the person that served the notice of the  
            alleged violation, that the violation had been corrected.  

          Recent amendments to the bill would not require the $500 penalty  
                                                                      



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          to be paid right away.  Rather, the alleged violator need only  
          agree to pay the amount and then, within 30 days of the receipt  
          of the notice of violation, deliver the civil penalty to the  
          person that served the notice.  This bill would then require the  
          recipient of the penalty to remit 75 percent of the penalty to  
          the Safe Drinking Water and Toxic Enforcement Fund within 30  
          days of receipt of the funds from the alleged violator.  The  
          remaining 25 percent (or $125) may be retained by the person  
          that served the notice of violation.

          The bill is structured to incentivize participants to settle  
          minor Proposition 65 violations through this new citizen suit  
          enforcement process.  A person who serves a notice of an alleged  
          violation within one of the four categories would automatically  
          find themselves within the new process, and once a business  
          receives a copy of that notice, it becomes the business's  
          responsibility to ensure that it takes all the necessary steps  
          and corrective measures within the window provided to stay  
          within the process.  If it fails to do so, the business would  
          lose the protections offered by this bill and find itself once  
          again faced with the possibility of civil litigation and/or  
          settlement demands.  As the Family Winemakers of California  
          state in their letter of support:

               AB 227 is a sensible alternative to prosecution because it  
               contains a clear incentive to fix potential violations and  
               reduces the court system workload.  It does not interfere  
               with Prop. 65's compliance mechanisms since it just  
               fast-tracks a solution.

          If enacted, businesses would still have an incentive to comply  
          with Proposition 65's warning requirements since, even with the  
          protections offered by this bill, non-compliant businesses would  
          still be assessed a civil penalty of $500, and would be required  
          to undertake the same corrective action that would have  
          prevented the violation in the first place.

          3.   Limitations on citizen suits under Proposition 65  

          The creation of a new citizen suit enforcement process as  
          contemplated in this bill would have the effect of precluding  
          some civil litigation brought by individuals in the public  
          interest.  For Proposition 65 reasonable warning violations  
          falling within one of the four categories described in Comment  
          2, a private plaintiff would be barred from filing an action  
          against the alleged violator, and would be barred from  
                                                                      



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          recovering any settlement or payment in lieu of penalties or any  
          reimbursement for costs and attorney's fees, if the alleged  
          violator meets all of the conditions and takes all of the  
          corrective action specified in the bill.  If an alleged violator  
          failed to follow the required procedure or failed to take all of  
          the required actions, a private plaintiff could still bring a  
          civil action or enter into a settlement agreement as permitted  
          by existing law.

          Importantly, this bill provides that it would not prevent the  
          Attorney General, a district attorney, a city attorney, or a  
          prosecutor in whose jurisdiction the violation is alleged to  
          have occurred from filing an enforcement action against an  
          alleged violator.  It does, however, state that in any such  
          action, the amount of any civil penalty assessed for a violation  
          shall be reduced to reflect any payment made by the alleged  
          violator for the same alleged violation under the new citizen  
          suit enforcement process.
          
          4.  In furtherance of Proposition 65  

          When Proposition 65 was passed by California's voters in 1986,  
          it included a section permitting the Legislature to amend the  
          initiative by statute if such an amendment passed in each house  
          by a two-thirds vote, and if the amendment was undertaken "[t]o  
          further its [the initiative's] purposes."  (Initiative Measure,  
          Proposition 65, Sec. 7, Nov. 4, 1986.)  California courts have  
          construed "[t]he declared purpose of Proposition 65's warning  
          requirements" as being "to protect the public's right to be  
          informed about exposures to chemicals that cause cancer, birth  
          defects, or other reproductive harm."  Am. Meat Inst. v. Leeman  
          (2009) 180 Cal.App.4th 728, 760 [citations and internal  
          quotation marks omitted].)

          This bill arguably furthers Proposition 65's purposes by  
          creating a streamlined process for quickly bringing minor  
          violations of the initiative's warning provisions into  
          compliance.  Instead of entering into protracted litigation or  
          settlement discussions, businesses that receive notices alleging  
          violations of the initiative's warning provisions are given an  
          incentive to quickly remedy the alleged defect.  In addition to  
          any other benefits businesses might receive in avoiding private  
          lawsuits, this bill entices alleged violators to provide the  
          required warnings about exposure to chemicals that cause cancer,  
          birth defects, or other reproductive harm, and in so doing  
          upholds the public's right to be informed about these hazards.
                                                                      



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          5. Notice of compliance

           Recent amendments to this bill direct the Judicial Council to  
          approve a "notice of compliance" to be executed by alleged  
          violators who find themselves within the bill's new citizen suit  
          enforcement process.  Staff at the Judicial Council has stated  
          that preparation of such a notice would be a time-intensive  
          endeavor that may require the Council to seek multiple rounds of  
          public comment and feedback.  As this is an urgency measure, the  
          author has committed to continue to work with Committee staff to  
          amend the bill to include a statutory form for the contemplated  
          "notice of compliance," and to strike those provisions tasking  
          the approval of this notice to Judicial Council.

          6.   Statutory adjustment of civil penalty  

          The $500 civil penalty provision in this bill includes a clause  
          designed to protect the value of the penalty from inflationary  
          pressure.  It states that the penalty is "to be adjusted every 5  
          years to reflect any increases in the cost of living in  
          California, as indicated by the annual average of the California  
          Consumer Price Index."  However, it does not specify when the  
          annual adjustment would take effect, or what entity would be  
          responsible for making the necessary calculations and publishing  
          the results.  The author offers the following amendments to  
          address these concerns.

                Author's amendments 
                
               On page 7, line 39, after "to be adjusted" add  
               "quinquennially as provided in this paragraph"
               On page 7, line 39, strike "every 5 years to reflect any  
               increases in"
               On page 7, strike line 40 in its entirety
               On page 8, line 1, strike "of the California Consumer Price  
               Index"
               On page 8, line 5, after the period add the following:

                    On January 1, 2019, and at each five-year interval  
                    thereafter, the dollar amount of the civil penalty  
                    provided in this section shall be adjusted by the  
                    Judicial Council based on the change in the annual  
                    California Consumer Price Index for All Urban  
                    Consumers, published by the Department of Industrial  
                    Relations, Division of Labor Statistics, for the most  
                                                                      



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                    recent five-year period ending on December 31  
                    preceding the adjustment, rounded to the nearest five  
                    dollars ($5).  The Judicial Council shall  
                    quinquennially publish the dollar amount of the  
                    adjusted civil penalty provided in this section,  
                    together with the date of the next scheduled  
                    adjustment.

          7.  Findings and declarations

           A number of supporters of this bill have expressed concerns over  
          its stated findings and declarations.  Specifically, they  
          suggest that Section 3 and Section 4, as drafted, could lead to  
          confusion in certain Proposition 65 enforcement actions not  
          within the scope of this bill.  As these two sections are  
          unnecessary to articulate a legislative finding that this bill  
          furthers the purposes of the Safe Drinking Water and Toxic  
          Enforcement Act of 1986, the following amendments are suggested  
          to strike these sections from the bill.

                Author's amendments 
                
               On page 9, strike lines 35-40
               On page 10, strike lines 1-12


          8.  Clarifying amendments  

          The author offers the following additional clarifying  
          amendments:

                Author's amendments 
           
               On page 4, line 21, strike "(j)" and replace it with "(k)"
               On page 5, line 33, strike "(j)" and replace it with "(k)"
               On page 7, line 23, strike "or (C)" and replace it with  
               "(C), or (D)"
               On page 8, line 23, strike "receipt" and replace it with  
               "service"
               On page 8, line 34, strike "The"
               On page 8, strike line 35 in its entirety
               On page 8, line 36, strike "notice that meets this  
               requirement."
               On page 9, line 20, strike "my" and replace it with "may"
          

                                                                      



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           Support  :  Air Conditioning Trade Association; American Chemistry  
          Council; American Coatings Association; Apartment Association,  
          California Southern Cities; Association of Home Appliance  
          Manufacturers; BIOCOM; California Apartment Association;  
          California Assisted Living Association; California Association  
          of Health Facilities; California Association of Winegrape  
          Growers; California Automotive Business Coalition; California  
          Bus Association; California Business Properties Association;  
          California Chamber of Commerce; California Citizens Against  
          Lawsuit Abuse; California Construction & Industrial Materials  
          Association; California Craft Brewers Association; California  
          Framing Contractors Association; California Grocers Association;  
          California Hotel and Lodging Association; California Independent  
          Grocers Association; California Independent Oil Marketers  
          Association; California Independent Petroleum Association;  
          California League of Food Processors; California Manufacturers  
          and Technology Association; California Metals Coalition;  
          California Restaurant Association; California Retailers  
          Association; California Service Station & Automotive Repair  
          Association; California Travel Association; Camarillo Chamber of  
          Commerce; Carpentaria Valley Chamber of Commerce; Carson Chamber  
          of Commerce; Chambers of Commerce Alliance of Ventura and Santa  
          Barbara Counties; Civil Justice Association of California;  
          Clovis Chamber of Commerce; Consumer Attorneys of California;  
          Consumer Healthcare Products Association; Consumer Specialty  
          Products Association; Culver City Chamber of Commerce; Duarte  
          Chamber of Commerce; East Bay Rental Housing Association; El  
          Segundo Chamber of Commerce; Family Winemakers of California;  
          Fresno Chamber of Commerce; Fullerton Chamber of Commerce;  
          Garden Grove Chamber of Commerce; Gardena Chamber of Commerce;  
          Goleta Valley Chamber of Commerce; Greater Conejo Valley Chamber  
          of Commerce; Greater Riverside Chamber of Commerce; Harbor  
          City/Harbor Gateway Chamber of Commerce; Hawthorne Chamber of  
          Commerce; Hermosa Beach Chamber of Commerce; Irwindale Chamber  
          of Commerce; Lawndale Chamber of Commerce; LAX Coastal Chamber  
          of Commerce; Lomita Chamber of Commerce; Manhattan Beach Chamber  
          of Commerce; Moorpark Chamber of Commerce; National Association  
          of Theatre Owners of CA/NV; National Federation of Independent  
          Business; NOR CAL Rental Property Association; Palm Desert  
          Chamber of Commerce; Plumbing-Heating-Cooling Contractors  
          Association of California; Ojai Chamber of Commerce; Orange  
          County Business Council; Oxnard Chamber of Commerce; Palos  
          Verdes Peninsula Chamber of Commerce; Personal Care Products  
          Council; Port Hueneme Chamber of Commerce; Rancho Cordova  
          Chamber of Commerce; Redondo Beach Chamber of Commerce; San  
          Fernando Valley Chamber of Commerce; San Gabriel Valley  
                                                                      



          AB 227 (Gatto)
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          Legislative Coalition of Chambers; San Gabriel Valley Regional  
          Chamber of Commerce; San Pedro Chamber of Commerce; Santa  
          Barbara Chamber of Commerce; Santa Clarita Chamber of Commerce;  
          Santa Paula Chamber of Commerce; Simi Valley Chamber of  
          Commerce; South Bay Association of Chambers of Commerce;  
          Thousand Oaks Chamber of Commerce; Torrance Chamber of Commerce;  
          United Chambers of San Fernando Valley; Valley Industry &  
          Commerce Association; Ventura Chamber of Commerce; Visalia  
          Chamber of Commerce; West Coast Lumber and Building Material  
          Association; Western Electrical Contractors Association;  
          Wilmington Chamber of Commerce

           Opposition  :  None Known

                                        HISTORY
           
           Source  :  Author

           Related Pending Legislation  :  AB 1026 (Quirk) would specify that  
          the substances included in the list that are identified as  
          hazardous for purposes of the Safe Drinking Water and Toxic  
          Enforcement Act of 1986 (Proposition 65) may only be included if  
          there is sufficient evidence that the referenced substance is  
          known to cause cancer or reproductive toxicity.  This bill is  
          pending in the Assembly Committee on Environmental Safety and  
          Toxic Materials.

           Prior Legislation  :

          AB 1756 (Committee on Budget, Chapter 228, Statutes of 2003)  
          established the Safe Drinking Water and Toxic Enforcement Fund  
          in the State Treasury and authorized the director of the lead  
          agency, who is designated by the Governor to implement the act,  
          to expend the funds in the Safe Drinking Water and Toxic  
          Enforcement Fund upon appropriation by the Legislature to  
          implement and administer the act.  This bill requires 75 percent  
          of all civil and criminal penalties collected pursuant to the  
          act to be deposited in the fund and requires any interest earned  
          upon the money deposited into the fund to be deposited in the  
          fund.  The bill requires 25 percent of all civil and criminal  
          penalties collected pursuant to the act to be paid to the  
          prosecuting office or the person who brought the action in the  
          public interest.

          AB 1447 (Matthews, 2003) would have authorized a person who  
          receives a notice alleging a violation of the warning  
                                                                      



          AB 227 (Gatto)
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          requirements of the Safe Drinking Water and Toxic Enforcement  
          Act of 1986 (Proposition 65) pursuant to the act's citizen suit  
          provision to serve a written offer, including a specified  
          declaration under penalty of perjury, to enter into a resolution  
          of the notice's allegations, before an enforcement action is  
          commenced.  The bill would have prohibited a person who brings  
          an action under the citizen suit provision from receiving either  
          an award of civil penalties if the written offer includes a  
          specified declaration and the person serving the written offer  
          agrees to provide a clear and reasonable warning or eliminate or  
          reduce the alleged exposure, or attorney's fees if the person  
          who makes the written offer agrees to reimburse the attorney's  
          fees and other costs and the person who brings the action does  
          not achieve a more favorable result than the terms of the offer.  
           The bill would have deemed as frivolous an unreasonable  
          rejection of a written offer and the continued prosecution of an  
          enforcement action.  This bill died in the Assembly Committee on  
          the Judiciary.

          AB 1176 (Campbell, 2003) would have made similar changes to  
          those in AB 1447, but would have additionally required a court  
          to make a finding that any proposed settlement was "fair,  
          reasonable and in the public interest" before it could be  
          approved.   This bill died in the Assembly Committee on  
          Environmental Safety and Toxic Materials.

          AB 1380 (Pacheco, 2003) would have made similar changes to those  
          in AB 1447, but would have additionally prohibited Proposition  
          65 suits against retailers of consumer  products, and would have  
          increased the number of exemptions from specified Proposition 65  
          requirements.  This bill died in the Assembly Committee on  
          Environmental Safety and Toxic Materials.

          SB 471 (Sher, Chapter 578, Statutes of 2001) requires a court,  
          in assessing the amount of a civil penalty for a violation of  
          the Safe Drinking Water and Toxic Enforcement Act of 1986  
          (Proposition 65), to consider specified factors, including,  
          among other things, the economic effect of the penalty on the  
          violator, whether the violator took good-faith measures to  
          comply with the act, the willfulness of the defendant's  
          misconduct, and the deterrent effect that the imposition of the  
          penalty would have on both the violator and the regulated  
          community.  This bill further states that, in cases where a  
          person bringing an action in the public interest alleging a  
          violation of the act's warning provisions is required to give  
          notice to the Attorney General, the notice must include a  
                                                                      



          AB 227 (Gatto)
          Page 17 of ?



          certificate of merit stating that the person executing the  
          certificate has consulted with one or more persons with relevant  
          and appropriate experience or expertise who has reviewed facts,  
          studies, or other data regarding the exposure to the listed  
          chemical that is the subject of the action, and that, based on  
          that information, the person believes there is a reasonable and  
          meritorious case for the private action.

           Prior Vote  :

          Assembly Committee on Environmental Safety and Toxic Materials  
          (Ayes 7, Noes 0)
          Assembly Committee on the Judiciary (Ayes 10, Noes 0)
          Assembly Committee on Appropriations (Ayes 17, Noes 0)
          Assembly Floor (Ayes 72, Noes 0)
          Senate Committee on Environmental Quality (Ayes 9, Noes 0)

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