Amended in Senate January 6, 2014

Amended in Senate April 15, 2013

Senate Bill No. 650

Introduced by Senator Lieu

February 22, 2013

An act to begin delete amend Section 25249.7 of the Health and Safety Code, relating to toxic chemicals. end delete begin insert add Section 9321.1 to, and to repeal and amend Section 9321 of, the Commercial Code, relating to business. end insert

LEGISLATIVE COUNSEL’S DIGEST

SB 650, as amended, Lieu. begin delete Toxic chemicals: exposure. end delete begin insert Motion pictures. end insert

begin insert

Existing law provides, until January 1, 2015, that a licensee in ordinary course of business takes its rights under a nonexclusive license free of a security interest in the general intangible created by the licensor, even if the security interest is perfected and the licensee knows of its existence.

end insert begin insert

This bill would remove the repeal of this provision on January 1, 2015, thus making this provision in effect indefinitely.

end insert begin insert

This bill would also provide that a licensee of nonexclusive rights in a motion picture that is produced pursuant to one or more collective bargaining agreements, as specified, takes its nonexclusive license in the motion picture subject to any perfected security interest securing the obligation to pay residuals as set forth in the applicable collective bargaining agreement and arising from exploitation under the license.

end insert begin delete

(1) 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 discharging or releasing such a chemical into any source of drinking water, except as specified. The act provides that it does not alter or diminish any legal obligation otherwise required in common law or by statute or regulation, or create or enlarge any defense in any action to enforce a legal obligation. The act requires a person bringing an action in the public interest, or a private person filing an action in which a violation of the act is alleged, to provide to specified entities, including to the Attorney General, a notice of an alleged violation at least 60 days prior to the filing of the action and to report to the Attorney General the results of a settlement or judgment and the final disposition of a case brought by the person. The act requires the Attorney General to maintain a record of the notice and report and to make the information available to the public.

end delete begin delete

This bill would specifically require the Attorney General to post the above information on its Internet Web site.

end delete begin delete

(2) Proposition 65 provides that it may be amended by a statute, passed in each house by a 2⁄3 vote, to further its purposes.

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This bill would find and declare that it furthers the purposes of Proposition 65.

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Vote:  begin delete ²⁄₃ end delete begin insert majority end insert . Appropriation: no. Fiscal committee:  begin delete yes end delete begin insert no end insert . State-mandated local program: no.

The people of the State of California do enact as follows:

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert Section 9321 of the end insert begin insert Commercial Code end insert begin insert , as
amended by Section 2 of Chapter 54 of the Statutes of 2013, is
repealed. end insert

begin delete

9321.  

(a) A lessee in ordinary course of business takes its
leasehold interest free of a security interest in the goods created
by the lessor, even if the security interest is perfected and the lessee
knows of its existence.

(b) This section shall become operative on January 1, 2015.

end delete

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 9321 of the end insert begin insert Commercial Code end insert begin insert , as added by
Section 3 of Chapter 54 of the Statutes of 2013, is amended to
read: end insert

9321.  

(a) In this section, “licensee in ordinary course of
business” means a person that becomes a licensee of a general
intangible in good faith, without knowledge that the license violates
the rights of another person in the general intangible, and in the
ordinary course from a person in the business of licensing general
intangibles of that kind. A person becomes a licensee in the
ordinary course if the license to the person comports with the usual
or customary practices in the kind of business in which the licensor
is engaged or with the licensor’s own usual or customary practices.

(b) A licensee in ordinary course of business takes its rights
under a nonexclusive license free of a security interest in the
general intangible created by the licensor, even if the security
interest is perfected and the licensee knows of its existence.

(c) A lessee in ordinary course of business takes its leasehold
interest free of a security interest in the goods created by the lessor,
even if the security interest is perfected and the lessee knows of
its existence.

begin delete

(d) This section shall remain in effect only until January 1, 2015,
and as of that date is repealed, unless a later enacted statute, that
is enacted before January 1, 2015, deletes or extends that date.

end delete

begin insert

begin insert SEC. 3. end insert   

end insert

begin insert Section 9321.1 is added to the end insert begin insert Commercial Code end insert begin insert , to
read: end insert

begin insert

begin insert 9321.1. end insert   

Notwithstanding the foregoing, a licensee of
nonexclusive rights in a motion picture that is produced pursuant
to one or more collective bargaining agreements governed by the
laws of the United States takes its nonexclusive license in such
motion picture subject to any perfected security interest securing
the obligation to pay residuals as set forth in the applicable
collective bargaining agreement and arising from exploitation
under such license. The terms “motion picture” and “residuals”
have the meaning ascribed to such terms under the applicable
collective bargaining agreements.

end insert

begin delete

  

SECTION 1.  

Section 25249.7 of the Health and Safety Code
is amended to read:

25249.7.  

(a) Any person who violates or threatens to violate
Section 25249.5 or 25249.6 may be enjoined in a court of
competent jurisdiction.

(b) (1) Any person who has violated Section 25249.5 or 25249.6
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. That civil penalty may be
assessed and recovered in a civil action brought in any court of
competent jurisdiction.

(2) In assessing the amount of a civil penalty for a violation of
this chapter, the court shall consider all of the following:

(A) The nature and extent of the violation.

(B) The number of, and severity of, the violations.

(C) The economic effect of the penalty on the violator.

(D) Whether the violator took good faith measures to comply
with this chapter and the time these measures were taken.

(E) The willfulness of the violator’s misconduct.

(F) The deterrent effect that the imposition of the penalty would
have on both the violator and the regulated community as a whole.

(G) Any other factor that justice may require.

(c) Actions pursuant to this section may be brought by the
Attorney General in the name of the people of the State of
California, by a district attorney, by a city attorney of a city having
a population in excess of 750,000, or, with the consent of the
district attorney, by a city prosecutor in a city or city and county
having a full-time city prosecutor, or as provided in subdivision
(d).

(d) Actions pursuant to this section may be brought by any
person in the public interest if both of the following requirements
are met:

(1) The private action is commenced more than 60 days from
the date that the person has given notice of an alleged violation of
Section 25249.5 or 25249.6 that is the subject of the private action
to the Attorney General and the district attorney, city attorney, or
prosecutor in whose jurisdiction the violation is alleged to have
occurred, and to the alleged violator. If the notice alleges a
violation of Section 25249.6, the notice of the alleged violation
shall include a certificate of merit executed by the attorney for the
noticing party, or by the noticing party, if the noticing party is not
represented by an 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. Factual information sufficient to establish the basis of the
certificate of merit, including the information identified in
paragraph (2) of subdivision (h), shall be attached to the certificate
of merit that is served on the Attorney General.

(2) Neither the Attorney General, a district attorney, a city
attorney, nor a prosecutor has commenced and is diligently
prosecuting an action against the violation.

(e) A person bringing an action in the public interest pursuant
to subdivision (d) and a person filing an action in which a violation
of this chapter is alleged shall notify the Attorney General that the
action has been filed. Neither this subdivision nor the procedures
provided in subdivisions (f) to (j), inclusive, shall affect the
requirements imposed by statute or a court decision in existence
on January 1, 2002, concerning whether a person filing an action
in which a violation of this chapter is alleged is required to comply
with the requirements of subdivision (d).

(f) (1) A person filing an action in the public interest pursuant
to subdivision (d), a private person filing an action in which a
violation of this chapter is alleged, or a private person settling a
violation of this chapter alleged in a notice given pursuant to
paragraph (1) of subdivision (d), shall, after the action or violation
is subject either to a settlement or to a judgment, submit to the
Attorney General a reporting form that includes the results of that
settlement or judgment and the final disposition of the case, even
if dismissed. At the time of the filing of a judgment pursuant to
an action brought in the public interest pursuant to subdivision (d),
or an action brought by a private person in which a violation of
this chapter is alleged, the plaintiff shall file an affidavit verifying
that the report required by this subdivision has been accurately
completed and submitted to the Attorney General.

(2) A person bringing an action in the public interest pursuant
to subdivision (d), or a private person bringing an action in which
a violation of this chapter is alleged, shall, after the action is either
subject to a settlement, with or without court approval, or to a
judgment, submit to the Attorney General a report that includes
information on any corrective action being taken as a part of the
settlement or resolution of the action.

(3) The Attorney General shall develop a reporting form that
specifies the information that shall be reported, including, but not
limited to, for purposes of subdivision (e), the date the action was
filed, the nature of the relief sought, and for purposes of this
subdivision, the amount of the settlement or civil penalty assessed,
other financial terms of the settlement, and any other information
the Attorney General deems appropriate.

(4) If there is a settlement of an action brought by a person in
the public interest under subdivision (d), the plaintiff shall submit
the settlement, other than a voluntary dismissal in which no
consideration is received from the defendant, to the court for
approval upon noticed motion, and the court may approve the
settlement only if the court makes all of the following findings:

(A) Any warning that is required by the settlement complies
with this chapter.

(B) Any award of attorney’s fees is reasonable under California
law.

(C) Any penalty amount is reasonable based on the criteria set
forth in paragraph (2) of subdivision (b).

(5) The plaintiff subject to paragraph (4) has the burden of
producing evidence sufficient to sustain each required finding.
The plaintiff shall serve the motion and all supporting papers on
the Attorney General, who may appear and participate in any
proceeding without intervening in the case.

(6) Neither this subdivision nor the procedures provided in
subdivision (e) and subdivisions (g) to (j), inclusive, shall affect
the requirements imposed by statute or a court decision in existence
on January 1, 2002, concerning whether claims raised by any
person or public prosecutor not a party to the action are precluded
by a settlement approved by the court.

(g) The Attorney General shall maintain a record of the
information submitted pursuant to subdivisions (e) and (f) and
shall make this information available to the public, including the
posting of the information on its Internet Web site.

(h) (1) Except as provided in paragraph (2), the basis for the
certificate of merit required by subdivision (d) is not discoverable.
However, nothing in this subdivision shall preclude the discovery
of information related to the certificate of merit if that information
is relevant to the subject matter of the action and is otherwise
discoverable, solely on the ground that it was used in support of
the certificate of merit.

(2) Upon the conclusion of an action brought pursuant to
subdivision (d) with respect to any defendant, if the trial court
determines that there was no actual or threatened exposure to a
listed chemical, the court may, upon the motion of that alleged
violator or upon the court’s own motion, review the basis for the
belief of the person executing the certificate of merit, expressed
in the certificate of merit, that an exposure to a listed chemical had
occurred or was threatened. The information in the certificate of
merit, including the identity of the persons consulted with and
relied on by the certifier, and the facts, studies, or other data
reviewed by those persons, shall be disclosed to the court in an
in-camera proceeding at which the moving party shall not be
present. If the court finds that there was no credible factual basis
for the certifier’s belief that an exposure to a listed chemical had
occurred or was threatened, then the action shall be deemed
frivolous within the meaning of Section 128.7 of the Code of Civil
Procedure, whichever provision is applicable to the action. The
court shall not find a factual basis credible on the basis of a legal
theory of liability that is frivolous within the meaning of Section
128.7 of the Code of Civil Procedure.

(i) The Attorney General may provide the factual information
submitted to establish the basis of the certificate of merit on request
to any district attorney, city attorney, or prosecutor within whose
jurisdiction the violation is alleged to have occurred, or to any
other state or federal government agency, but in all other respects
the Attorney General shall maintain, and ensure that all recipients
maintain, the submitted information as confidential official
information to the full extent authorized in Section 1040 of the
Evidence Code.

(j) In an action brought by the Attorney General, a district
attorney, a city attorney, or a prosecutor pursuant to this chapter,
the Attorney General, district attorney, city attorney, or prosecutor
may seek and recover costs and attorney’s fees on behalf of any
party who provides a notice pursuant to subdivision (d) and who
renders assistance in that action.

SEC. 2.  

The Legislature finds and declares that this act furthers
the purposes of the Safe Drinking Water and Toxic Enforcement
Act of 1986 (Chapter 6.6 (commencing with Section 25249.5) of
Division 20 of the Health and Safety Code).

end delete