BILL ANALYSIS Ó
AB 1252
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Date of Hearing: April 14, 2015
ASSEMBLY COMMITTEE ON ENVIRONMENTAL SAFETY AND TOXIC MATERIALS
Luis Alejo, Chair
AB 1252
(Jones) - As Introduced February 27, 2015
SUBJECT: Proposition 65: enforcement
SUMMARY: Prohibits any person from bringing an enforcement
action against a company that employs 25 people or less for
failure to provide a warning for an exposure to a chemical known
to the state to cause cancer or reproductive toxicity, in
violation of Proposition 65, unless certain conditions are met.
Specifically, this bill:
1)Requires any person who serves a notice of alleged violation
of the clear and reasonable warning requirement of Proposition
65 upon a person who employs fewer than 25 employees to
complete and provide to the alleged violator a notice of the
special compliance procedure and proof of compliance form.
2)Prohibits any person who serves a notice of alleged violation
upon a person who employs fewer than 25 employees from filing
an action for that exposure against the alleged violator, or
from recovering from the alleged violator in a settlement any
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payment in lieu of penalties or any reimbursement for costs
and attorney's fees, if , within 14 days after service of the
notice, the alleged violator has done all of the following:
a) Corrected the alleged violation;
b) Agreed to pay a civil penalty for the alleged violation
of the clear and reasonable warning requirement of
Proposition 65 of $500; and,
c) Notified, in writing and as specified, the person that
served the notice of the alleged violation that the
violation has been corrected.
3)Requires the alleged violator to deliver the civil penalty to
the person that served the notice of the alleged violation
within 30 days of service of that notice, and the person that
served the notice of violation to 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.
4)Specifies, in detail, the requirements of the notice required
to be provided to an alleged violator.
5)Makes a legislative finding that this act furthers the
purposes of the Safe Drinking Water and Toxic Enforcement Act
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of 1986.
EXISTING LAW: Under Proposition 65:
1)Prohibits a person in the course of doing business (defined as
a business of 10 or more, per Health and Safety Code (HSC)
Code §25249.11) from knowingly discharging or releasing 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. (HSC § 25249.5)
2)Prohibits a 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 clear and reasonable warning to
such individual. (HSC § 25249.6)
3)Provides that any person who violates the above provisions may
be enjoined in any court of competent jurisdiction and shall
be liable for a civil penalty not to exceed $2,500 per day for
each violation in addition to any other penalty established by
law. (HSC § 25249.7)
4)Provides for a specified course of remediation for lawsuits
alleging a violation of the clear and reasonable warning
requirement for four specified exposures (lawfully permitted
alcoholic beverages; chemicals resulting from food or beverage
preparation; environmental tobacco smoke on premises where
smoking is permitted; and, engine exhaust in parking
facilities, as specified). Prohibits the person who files an
action from exposure from doing so until 14 days after she or
he has served the alleged violator with a notice of alleged
violation. Authorizes the person who served the notice of
violation to file an action if the alleged violator failed to
correct the alleged violation or failed to pay a civil penalty
of $500. (HSC § 25249.7)
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5)Requires the Governor to cause a list to be published of those
chemicals known to the state to cause cancer or reproductive
toxicity, and to cause such list to be revised and republished
in light of additional knowledge at least once per year. (HSC
§ 25249.8)
6)Exempts a business from discharge and release prohibitions for
twenty months subsequent to the listing of the chemical in
question on the list. Exempts a business from discharge and
release prohibitions if the discharge or release is lawful and
will not cause any significant amount of the discharged or
released chemical to enter any source of drinking water. (HSC
§ 25249.9)
7)Exempts a business from the warning requirement in cases of
federal preemption, for 12 months subsequent to the listing of
the chemical in question on the list, and for an exposure for
which the person responsible can show poses no significant
risk, as specified. (HSC § 25249.6)
8)Authorizes amendments to Proposition 65, provided that they
are passed in each house of the Legislature by a two-thirds
vote and further the purposes Proposition 65. (Initiative
Measure, Proposition 65, Sec. 7, Nov. 4, 1986.)
FISCAL EFFECT: Unknown.
COMMENTS:
Need for the bill: According to the author, "This bill provides
small businesses with relief from Proposition 65 litigation
abuse. It will allow for businesses with between 10-25
employees, to correct an enforcement action within 14 days after
service notice. Proposition 65 has become a boon for trial
lawyers and the civic penalties pale in comparison to the
amounts awarded for attorney fees and costs. Currently
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Proposition 65 exempts businesses with less than 10 employees
however it does not account for other small businesses,
particularly those that have between 10-25employees. The
current civic penalty is $2,500 per day for each violation. That
and the attorney fees that are added on top of that can be a
devastating blow to a small business."
Proposition 65: In 1986, California voters approved a ballot
initiative, Proposition 65, the Safe Drinking Water and Toxic
Enforcement Act of 1986, commonly referred to as Proposition 65,
to address their concern that "hazardous chemicals pose a
serious potential threat to their health and well-being, [and]
that state government agencies have failed to provide them with
adequate protection?" Proposition 65 requires the State to
publish a list of chemicals known to cause cancer or birth
defects or other reproductive harm. This list, which must be
updated at least once a year, currently includes approximately
800 chemicals. The Office of Environmental Health Hazard
Assessment (OEHHA) administers the Proposition 65 program,
including evaluating all currently available scientific
information on substances considered for placement on the
Proposition 65 list.
Under Proposition 65, businesses in California are required to
provide a "clear and reasonable" warning before knowingly and
intentionally exposing anyone to a Proposition 65-listed
chemical. Warnings can be made in many ways, including by
labeling a consumer product, posting signs, distributing
notices, or publishing notices in a newspaper. Once a chemical
is listed, businesses have 12 months to comply with warning
requirements.
Proposition 65 also prohibits companies that do business within
California from knowingly discharging listed chemicals into
sources of drinking water. Once a chemical is listed,
businesses have 20 months to comply with the discharge
prohibition.
Businesses with less than 10 employees and government agencies
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are exempt from Proposition 65's warning requirements and
prohibition on discharges into drinking water sources.
Businesses are also exempt from the warning requirement and
discharge prohibition if the exposures they cause are so low as
to create no significant risk of cancer or birth defects or
other reproductive harm.
In 2013, through the enactment of AB 227 (Gatto), the
Legislature amended the clear and reasonable warning requirement
of Proposition 65 for four specified exposures: lawfully
permitted alcoholic beverages; chemicals resulting from food or
beverage preparation; environmental tobacco smoke on premises
where smoking is permitted; and, engine exhaust in parking
facilities. For these exposures, statute provides for a
specified course of remediation, which includes enabling the
alleged violator to correct the alleged violation within 14 days
and pay a civil penalty of $500 in order to avoid a lawsuit.
This bill proposes to extend the course of remediation
delineated for the four specified exposures in AB 277 for all
business of 10- 25 employees who have violated the clear and
reasonable warning requirement of Proposition 65.
How does Proposition 65 work to protect the public? According
to the Office of the Attorney General (AG), the provisions of
Proposition 65 have been successful at protecting consumers from
toxic chemicals. The AG asserts that Proposition 65 has
motivated businesses to eliminate or reduce toxic chemicals in
numerous consumer products. Products that have been
reformulated as a result of notices of violation or litigation
include ceramic tableware, artificial turf, household faucets,
children's jewelry, potato chips, candy, and vitamin
supplements. Proposition 65 has also resulted in significant
reductions in toxic air pollution - both outdoor (diesel school
bus and grocery truck emissions) and indoor (salon worker
exposures to formaldehyde, toxic solvents in nail products, and
formaldehyde gas release from the building materials in portable
classrooms). Proposition 65 has induced "quiet compliance"
without the need for litigation, in which manufacturers
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voluntarily take steps to comply by providing their suppliers
with specifications so that the ingredients in their products
avoid or significantly limit exposure to listed chemicals. The
law has also educated the general public about exposures to
specific toxic chemicals, creating both demand and market reward
for less-toxic products. Finally, Proposition 65 litigation has
identified specific chemical exposure concerns and led to
regulatory reforms to benefit public health at the state and
national level.
Proposed regulatory action on the Proposition 65 warning
requirement: After holding public workshops on safe-harbor
warning regulations in 2013 and 2014, on January 12, 2015 OEHHA
released a formal regulatory proposal to reform certain
regulations related to Proposition 65. The proposed warning
regulations include a provision allowing product retailers,
under specified circumstances, to correct alleged violations of
the warning requirements of Proposition 65 within two business
days after they have actual knowledge of the exposures. The
provision applies to all product retailers subject to the law,
regardless of the number of employees. OEHHA held a public
hearing on the proposal on March 25, 2014. If the regulation is
eventually adopted, it would replace the existing related
warning regulation.
Additionally, OEHHA concurrently proposed a regulation
describing a new website it is developing that will provide more
detailed information to the public on warnings they see on
products and in locations in California; a proposed Labor Code
mechanism regulation; potential revisions to the regulation on
exposures to naturally occurring chemicals; and, other changes.
OEHHA has held public hearings and/or workshops and held public
comment periods for all of these proposed changes.
Are the provisions of this bill constitutional? In order to
protect the initiative authority of the electorate, the
California Constitution prohibits the Legislature from amending
any statute that was passed by ballot initiative, except by the
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specific conditions included in the initiative. Proposition 65
specifically prohibits the Legislature from making any
amendments, except upon at least two-thirds vote and only if
such amendments "further its purposes." The California
Legislative Counsel Bureau (Legislative Counsel) noted that,
"The California Supreme Court has held that Proposition 65 is to
be construed broadly to protect the public (People ex rel.
Lungren v. Superior Court (1996) 14 Cal. 4th 294, 306-307, 314)?
A court may determine that these proposed changes on the
enforcement provisions of the act, if enacted, do not further
the purposes of the initiative, notwithstanding the legislative
findings in proposed Section 2 of the measure (see Amwest Surety
Ins. Co. v. Wilson (1995) 11 Cal.4th 1243, 1249-1265)."
Arguments in support: A coalition of supporters argues that,
"Unfortunately, because Proposition 65 incentivizes individual
pursuits by entitling private enforcers to 25 percent of the
penalty collected for successful enforcement in addition to
legal fees, a limited number of plaintiffs have engaged in
shakedown lawsuits against small businesses over a lack of a
sign. These lawsuits can easily cost several thousand dollars to
litigate, causing many small businesses to settle out of court
regardless of whether they were required by law to provide a
warning?
"In 2013, recognizing the impact of these lawsuits on
businesses, the Legislature passed AB 227 (Gatto), which
provides businesses with fewer than 25 employees a 14-day window
to cure a signage violation relating only to specific
situations... AB 1252, however, would have broader application
than AB 227 in that it would allow businesses with fewer than 25
employees to cure any type of signage violation?
"With so many chemicals on the list, including every day
products, it's easy to understand why business owners sometimes
fail to realize a warning sign is required. In fact, according
to the Office of Environmental Health Hazard Assessment,
"determining anticipated levels of exposure to listed chemicals
can be very complex." Further, many business owners determine
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that signage is not warranted given the exposure levels of a
particular chemical at their business establishment, but
attorneys will still make an allegation in a demand letter in
order to pressure them into handing over a small settlement or
risk ruinous litigation. AB 1252 will help eliminate the
inappropriate use of litigation against these small businesses
who can least afford these drive-by lawsuits, while ensuring
that the public does receive Proposition 65 warnings when
appropriate."
Arguments in opposition: The Center for Environmental Health
argues that, "The purpose of Proposition 65 is to prevent
exposures by workers and the public to toxic chemicals, not to
mitigate the harm once it is done. AB 1252 would do just the
opposite by allowing companies with 10 - 25 employees to avoid
serious consequences if, within 14 days, they have 'corrected
the violation' that has already allowed people to be exposed to
chemicals that cause cancer and/or reproductive harm, agreed to
pay a fine of $55, and submitted a written notice with proof of
compliance to the person who served the notice of violation.
Not only does this bill undermine the fundamental purpose of
Proposition 65, but it also puts those working for small
businesses at particular risk of exposure to toxic materials and
the associated health problems?
"By allowing businesses with fewer than 25 employees to avoid
any significant consequences for violating Prop 65, AB 1252
would eliminate incentives for businesses to comply with the
statute? Just as the threat of speeding tickets is critical to
making our highways safer, the threat of Prop 65 enforcement is
critical to ensuring that companies comply with the law and keep
our children and families safer?
"AB 2361 would allow any company with fewer than 25 employees to
avoid serious consequences if, within 14 days, it has 'corrected
the violation.' Given the many scenarios that may require a
Prop 65 warning, this provision is so vague as to be
meaningless. What does it mean for a retailer to correct a
violation of Prop 65 when it has already sold a product to a
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consumer? How does a business that exposes people to a Prop 65
chemical on its premises correct that violation? More
importantly, who decides whether a violation has been
"corrected"? Rather than protecting companies with 10-25
employees from litigation, AB 1252 invites endless litigation on
these questions."
Recent related legislation:
1)AB 543 (Quirk). Provides, under Proposition 65, that a
person, in the course of doing business, does not knowingly
and intentionally expose an individual to a chemical known to
the state to cause cancer or reproductive toxicity if there
exists an exposure assessment that meets three specified
requirements. This bill is scheduled to be heard by the
Assembly Environmental Safety and Toxic Materials Committee on
April 28, 2015.
2)AB 2361 (Jones, 2014). Would have prohibited any person from
bringing an enforcement action against a company that employs
25 people or less for failure to provide a warning for an
exposure to a chemical known to the state to cause cancer or
reproductive toxicity, in violation of Proposition 65, unless
certain conditions are met. This bill was held by the
Assembly Environmental Safety and Toxic Materials Committee.
3)AB 2738 (Committee on Environmental Safety and Toxic
Materials), Chapter 828, Statutes of 2014. Included technical
clean-up of the Proposition 65 provisions in AB 227 (Gatto,
2013).
4)AB 227 (Gatto), Chapter 581, Statutes of 2013. For four
potential exposures (alcohol, food preparation, environmental
cigarette smoke, and vehicle exhaust, all in certain
contexts), provides for a specified course of remediation for
lawsuits alleging a violation of the clear and reasonable
warning requirement of Proposition 65.
5)AB 1026 (Quirk, 2013). Would have changed the process for
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identifying carcinogens and reproductive toxicants under
Proposition 65 to require the listing of chemicals only if
there is "sufficient evidence" that the suspect material is
known to cause cancer or reproductive toxicity. This bill was
held by the Assembly Environmental Safety and Toxic Materials
Committee.
Double referral: This bill has been double referred to the
Assembly Judiciary Committee.
REGISTERED SUPPORT / OPPOSITION:
Support
American Coatings Association
Association of California Egg Farmers
Automotive Specialty Products Association
Biocom
Boma California
California Association of Realtors
California Building Industry Association
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California Business Properties Association
California Chamber of Commerce
California Farm Bureau Federation
California Grain & Feed Association
California League of Food Producers
California Manufacturers & Technology Association
California Metals Coalition
California Paint Council
California Seed Association
California State Association of Florists
Civil Justice Association of California
Consumer Specialty Products Association
Industrial Environmental Association
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International Council of Shopping Centers
International Fragrance Association, North America
National Aerosol Association
National Association of Independent and Office Properties
National Federation of Independent Business
West Coast Lumber & Building Material Association
Opposition
As You Sow
Breast Cancer Action
Breast Cancer Fund
California Healthy Nail Salon Collaborative
California Labor Federation
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California Teamsters Public Affairs Council
Californians for a Healthy & Green Economy (CHANGE)
Capobianco
Center for Environmental Health
Center on Race, Poverty & the Environment
Clean Water Action- California
Coalition for Clean Air
Consumer Attorneys of California
Environmental Working Group
Friends of the Earth
Pesticide Action Network North America
Physicians for Social Responsibility, Los Angeles
Physicians for Social Responsibility, San Francisco Bay Area
Chapter
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Worksafe
Analysis Prepared by:Shannon McKinney / E.S. & T.M. / (916)
319-3965