California's Proposition 65 has been reformed to allow business owners who correct certain types of alleged violations within 14 days to pay only a nominal fine of $500; prior to the amendment, business owners could have been subjected to penalties up to $2,500 per day for each violation. The change took place with the enactment of AB 227, which was introduced by Assemblyman Mike Gatto (D-Los Angeles) in February 2013 and signed into law by Governor Jerry Brown on October 5, 2013.
Proposition 65, also known as the Safe Drinking Water and Toxic Enforcement Act of 1986, prohibits businesses from exposing any individual to a chemical known to the State of California to cause cancer or reproductive toxicity without providing a clear and reasonable warning. The law allows private citizens to bring enforcement actions against businesses if the state declines to do so or does not act within 60 days after it is notified of an alleged violation. Since these "bounty hunters" are entitled to a percentage of any penalties assessed by the courts, the unintended consequence has been a rash of abusive filings. When he first introduced the bill, Gatto explained that the original intent of Proposition 65 was not to create a situation where shakedowns of California's small-business owners would cause them to want to close their doors.
AB 227 amended Section 25249.7 of California's Health and Safety Code. The 14-day grace period and $500 fine apply to the following alleged violations:
- Exposure to alcoholic beverages consumed on the alleged violator's premises;
- Exposure to a chemical known to cause cancer or reproductive toxicity in a food or beverage prepared and sold on the alleged violator's premises if the chemical was not intentionally added and was formed by cooking or similar preparation;
- Exposure to environmental tobacco smoke to persons (other than employees) who enter premises where smoking is permitted; or
- Exposure to chemicals known to cause cancer or reproductive toxicity that occur inside facilities primarily intended for parking non-commercial vehicles.
AB 227 was the first bill to substantively amend Proposition 65 in nearly fifteen years, and only the second one in history, according to a press release issued by Assemblyman Gatto's office. Legislation to reform Proposition 65 requires passage by a two-thirds majority vote in the legislature. AB 227 had wide support and passed both the California Assembly and Senate unanimously.