BILL ANALYSIS                                                                                                                                                                                                    

                                                                     AB 543

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          Date of Hearing:  April 28, 2015


                                  Luis Alejo, Chair

          AB 543  
          (Quirk) - As Amended April 6, 2015

          SUBJECT:  Proposition 65:  exposure

          SUMMARY: Provides that businesses may complete an exposure  
          assessment to determine if a Proposition 65 warning is required.  
          Specifically, this bill:  

          1)Provides 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 is a qualified exposure assessment for the  
            likely exposure that concludes that the exposure to the  
            chemical is at a level that does not require a warning.

          2)Provides that a qualified exposure assessment must be  
            conducted by a qualified scientist in accordance with  
            regulations adopted by the Office of Environmental Health  
            Hazard Assessment (OEHHA) that are relevant to the alleged  

          3)Requires that the exposure assessment was completed prior to  
            receiving notice of an alleged exposure violation.

          4)Defines a qualified scientist as a person who has completed a  
            masters, doctoral, or medical doctor degree and has experience  
            in an area specializing in any of the following:


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             a)   Epidemiology;
             b)   Oncology;
             c)   Pathology;
             d)   Medicine;
             e)   Public health;
             f)   Biology;

             g)   Toxicology;
             h)   Developmental toxicology;
             i)   Reproductive toxicology;
             j)   Teratology; or,
             aa)  Environmental chemistry.

          5)Requires the qualified scientist to demonstrate ongoing  
            expertise in the conduct of work relevant to the evaluation of  
            exposure to carcinogenic chemicals or chemicals that pose  
            reproductive or developmental hazards.

          EXISTING LAW:  Under Proposition 65:

          1)Prohibits a person, in the course of doing business, from  
            knowingly discharging or releasing a chemical known to the  
            state to cause cancer or reproductive toxicity into any source  
            of drinking water.

          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.  

          3)Provides that any person who violates the above provisions may  
            be enjoined in any court of competent jurisdiction and shall  


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            be liable for a civil penalty not to exceed $2,500 per day for  
            each violation in addition to any other penalty established by  
          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.  

          5)Exempts a business from discharge and release prohibitions for  
            twenty months subsequent to the listing of the chemical in  
            question on the Proposition 65 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.  

          6)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.  

          7)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. 

           FISCAL EFFECT:  Not known.


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          Need for the bill: According to the author, "Businesses commonly  
          provide warnings on their products and facilities even if they  
          do not cause a Prop 65 exposure at levels requiring a warning.   
          Businesses often provide such warnings because: (1) the law  
          permits them; and (2) the law currently provides little guidance  
          regarding how exposure assessments must be conducted and the  
          role they play in guiding a business's decision about whether or  
          not to warn.  Due to this uncertainty and the expense involved  
          in defending these determinations, many businesses choose to  
          provide warnings where the law may not require such warnings.   
          Prop 65 permits this approach, which in many cases is the only  
          reasonable compliance approach for a responsible business.   
          However, there are significant public health consequences to  
          overwarning, including the increased likelihood that  
          Californians will overlook, ignore, or give less credence to  
          other warnings where risks to individuals may be more immediate  
          and potential consequences more extreme."

          Safe harbor levels for businesses:  OEHHA develops numerical  
          guidance levels, known as "safe harbor numbers" for determining  
          whether a warning is necessary or whether discharges of a  
          chemical into drinking water sources are prohibited. However, a  
          business may choose to provide a warning simply based on its  
          knowledge, or assumption, about the presence of a listed  
          chemical without attempting to evaluate the levels of exposure.  
          Because businesses do not file reports with OEHHA regarding what  
          warnings they have issued and why, OEHHA is not able to provide  
          further information about any particular warning.

          OEHHA has developed safe harbor levels to guide businesses in  
          determining whether a warning is necessary or whether discharges  
          of a chemical into drinking water sources are prohibited. A  


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          business has "safe harbor" from Proposition 65 warning  
          requirements or discharge prohibitions if exposure to a chemical  
          occurs at or below these levels. These safe harbor levels  
          consist of No Significant Risk Levels for chemicals listed as  
          causing cancer and Maximum Allowable Dose Levels for chemicals  
          listed as causing birth defects or other reproductive harm.  
          OEHHA has established over 300 safe harbor levels to date and  
          continues to develop more levels for listed chemicals. 

          Safe use determination (SUD).  A SUD is a written statement  
          issued by OEHHA, which interprets and applies Proposition 65 and  
          its implementing regulations to a specific set of facts in  
          response to a request by a business or a trade group. Requests  
          for SUDs seek OEHHA's determination whether an exposure or  
          discharge of a listed chemical resulting from specific business  
          actions or the average use of a specific product is subject to  
          the warning requirement or discharge prohibition. The SUD  
          determines if the discharge or exposure is at or below the safe  
          harbor number.

          According to OEHHA, there have been fewer than 12 total requests  
          over the years, but there are currently five requests pending in  
          various stages of the process. There have been five other  
          requests that were withdrawn, either before formal submission of  
          the request or before the process were completed.  Three SUD's  
          have been issued - one for saccharin and two for crystalline  
          silica. In addition, OEHHA issued an interpretive guidance  
          document for lead in fishing tackle instead of an official SUD.  
          OEHHA has also issued three informational letters that have  
          responded to some aspects of SUD requests.

          The business can use the SUD document as a defense in a legal  
          action. The courts consider it persuasive but not conclusive  
          evidence. OEHHA is not aware of any case in which a plaintiff  
          has successfully challenged a defendant's reliance on an SUD.

          Proposed regulatory action on the Proposition 65 warning  
          requirement:  On March 7, 2014, OEHHA released a pre-regulatory  


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          package to reform Proposition 65, which includes enhancements to  
          the warning requirements and provides an opportunity for  
          retailers, only, with 25 or fewer employees to cure certain  
          minor warning violations, as specified, to avoid private  
          enforcement.  Minor warning violations would include the  
          short-term absence of a sign or other warning materials that had  
          been previously provided, inadvertent obstruction of a warning  
          label or sign, or the interruption of an electronic device due  
          to software problems or internet connectivity issues.  The  
          regulations specify that the opportunity to cure only exists  
          where the retail seller was previously in compliance with  
          Proposition 65; the violation is not the result of intentional  
          neglect or disregard for Proposition 65; unavoidable; corrected  
          within 24 hours of discovery or notification, or within 14 days  
          where software or equipment must be repaired or replaced; and,  
          not recurrent.   

           Argument in support:  A coalition of business groups, including  
          the California Chamber of Commerce, voiced their support for the  
          bill and said, "Businesses may use a Proposition 65-listed  
          chemical without providing a warning so long as the exposure  
          does not exceed a specified threshold level. Notwithstanding  
          this so-called "safe harbor" from the warning requirement,  
          businesses often provide warnings on their products or  
          facilities out of an abundance of caution, even if no chemical  
          exposure is present or if the chemical exposure is occurring  
          below specified threshold levels. This is because if a business  
          rightfully and lawfully elects not to warn on the basis that its  
          scientific exposure assessment concludes that the exposure does  
          not exceed the threshold level, its risk of being sued is  
          actually greater than if it provides a warning unnecessarily."

          Argument in opposition:  According to The Center for  
          Environmental Health, "AB 543 would allow any company with  
          enough resources to hire an expert to conduct an exposure  
          assessment that determines that their product does not contain  
          levels sufficient to require warnings. OEHHA already conducts  


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          such assessments (called Safe Use Determinations) under current  
          law with stringent science and public input. But AB 543 would  
          allow these exposure assessments to be done by private companies  
          without public review and would make the results  
          unchallengeable. AB 543 could also lead to more litigation over  
          whether the exposure assessment was done in accordance with the  
          OEHHA implementing regulations under 25249.6(b)(1)."

          Previous legislation:

          1)AB 2738 (Committee on Environmental Safety and Toxic  
            Materials) (Chapter 828, Statutes of 2014).  Includes  
            technical clean-up of the Proposition 65 provisions in AB 227  
            (Gatto, 2013).  

          2)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.



          Advanced Medical Technology Association 


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          Agricultural Council of California 

          Alhambra Chamber of Commerce 

          Alliance of Automobile Manufacturers 

          American Apparel and Footwear Association 

          American Coatings Association 

          American Composite Manufacturers Association 

          American Frozen Foods Institute 

          American Herbal Products Association 

          American Home Furnishings Alliance 

          Associated Roofing Contractors of the Bay Area Counties, Inc. 

          Association of Home Appliance Manufacturers 

          Auburn Chamber of Commerce 

          Automotive Specialty Products Alliance 


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          Breen Color Concentrates 

          Building Owners and Managers Association of California 

          California Apartment Association 

          California Association of Boutique & Breakfast Inns 

          California Asian Pacific Chamber of Commerce

          California Association of Health Facilities 

          California Association of Realtors 

          California Association of Winegrape Growers 

          California Attractions and Parks Association 

          California Business Properties Association 

          California Chamber of Commerce 

          California Cotton Ginners Association 

          California Cotton Growers Association 


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          California Farm Bureau Federation 

          California Furniture Manufacturers Association 

          California Hospital Association 

          California Hotel and Lodging Association 

          California League of Food Processors 

          California Manufacturers and Technology Association 

          California Metals Coalition 

          California Paint Council 

          California Restaurant Association 

          California Retailers Association 

          California Small Business Alliance 

          California Travel Association 

          Camarillo Chamber of Commerce 


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          Cerritos Regional Chamber of Commerce 

          Chamber of Commerce, Mountain View Chemical Industry Council of  

          Commercial Real Estate Development Association 

          Composite Panel Association 

          Consumer Electronics Association 

          Consumer Specialty Products Association 

          Council for Responsible Nutrition 

          El Centro Chamber of Commerce 

          Fashion Accessories Shippers Association 

          Frozen Potato Products Institute 

          Fullerton Chamber of Commerce 

          Gateway Chambers Alliance 

          Goleta Valley Chamber of Commerce 


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          Greater Riverside Chamber of Commerce 

          Greater San Fernando Valley Chamber of Commerce 

          Grocery Manufacturers Association 

          Industrial Environmental Association 

          Information Technology Industry Council 

          International Council of Shopping Centers 

          International Fragrance Association, North America 

          International Franchise Association 

          ISSA, the Worldwide Cleaning Industry Association 


          Metal Finishing Association of Northern California 

          Metal Finishing Association of Southern California 

          National Aerosol Association 


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          National Council of Textile Organizations 

          National Electrical Manufacturers Association 

          National Federation of Independent Businesses 

          National Shooting Sports Foundation 

          North American Home Furnishings Association 

          Orange Chamber of Commerce 

          Oxnard Chamber of Commerce 

          Palm Desert Area Chamber of Commerce 

          Personal Care Products Council 

          Plumbing Manufacturers International 

          Printing Industries of California 

          Redondo Beach Chamber of Commerce 

          Ripon Chamber of Commerce 


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          Rubber Manufacturers Association 

          San Diego Regional Chamber of Commerce 

          San Francisco Chamber of Commerce 

          Santa Clara Chamber of Commerce and Convention-Visitors Bureau 

          Santa Maria Valley Chamber of Commerce and Visitors Bureau 

          Simi Valley Chamber of Commerce 

          South Bay Association of Chambers of Commerce 

          Southwest California Legislative Council 

          Sporting Arms and Ammunition Manufacturers Institute 

          Styrene Information Research Center 

          The Art and Creative Materials Institute, Inc. 

          The Chamber of Commerce of the Santa Barbara Region 

          Torrance Area Chamber of Commerce 


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          Toy Industry Association 

          Travel Goods Association 

          West Coast Lumber and Building Materials Association 

          Western Agricultural Processors Association 

          Western Carwash Association 

          Western Growers Association 

          Western Plant Health Association 

          Writing Instrument Manufacturers Association


          As You Sow
          Black Woman for Wellness 
          Breast Cancer Fund
          CA Healthy Nail Salon Collaborative 
          California Labor Federation
          California Teamster
          Californians Against Waste 
          Californians for a Healthy & Green Economy 


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          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 
          North America Worksafe 
          Pesticide Action Network
          Physicians for Social Responsibility - Los Angeles 
          Physicians for Social Responsibility - San Francisco Bay Area

          Analysis Prepared by:Bob Fredenburg / E.S. & T.M. / (916)