I respectfully dissent.
In 1997, Rocha, a client of defendant Diversified Paratransit, sexually harassed plaintiff Salazar. Diversified Paratransit and its employees did not sexually harass Salazar. In 1984, the Legislature rejected a proposed amendment to Government Code section 12940,1 the statute at issue here, which would have made employers like Diversified Paratransit liable for sexual harassment by clients like Rocha. Therefore in 1997, when Rocha sexually harassed Salazar, the law gave no notice to Diversified Paratransit that it could be hable for Rocha’s actions. Although the Legislature stated that Assembly Bill No. 76 (2002-2003) merely “clarified” existing law, abundant *329evidence shows that Assembly Bill No. 76 made significant, substantive changes in the law, expanding the scope of employer liability and the scope of a plaintiffs cause of action against an employer for sexual harassment by its clients under the California Fair Employment and Housing Act. The Legislature cannot change “the rules of the game” to make employers liable for past sexual harassment of employees by nonemployees, customers, or clients. Indeed, the Legislature disregarded its own recognition of this principle in section 12940, subdivision (j)(2). For these reasons Assembly Bill No. 76 should apply prospectively only, should have no effect on this appeal, and should not alter this court’s decision filed on October 28, 2002. The judgment for defendants should be affirmed and the order awarding attorney fees to defendants should be reversed.
1. Assem. Bill 76 Did Not “Clarify” the Law and the Legislature Did Not Attempt to Make Assembly Bill No. 76 Retroactive. The Substantive Changes in Assem. Bill 76 Should Apply Prospectively Only
As relevant to his appeal, Assembly Bill No. 76 added two sentences to subparagraphs in subdivision (j) of section 12940,2 and added an uncodified statement of legislative intent as section 2, chapter 671 of the Statutes of 2003.3
The question is whether Assembly Bill No. 76 applies to conduct occurring in 1997, or whether the amendment applies only to conduct occurring after *330January 1, 2004, the date Assembly Bill No. 76 became effective. I find the latter; Assembly Bill No. 76 applies only prospectively.
A. Rules Governing Prospective or Retroactive Application of Statutory Amendments and the Interpretation of a Legislative Declaration That an Amendment Construes and Clarifies Existing Law
The Legislature stated that Assembly Bill No. 76 construed and clarified the meaning and effect of existing law. The Legislature did not declare any intent to make Assem. Bill 76 retroactive.
A retroactive law affects rights, obligations, acts, transactions, and conditions which exist or are performed before the statute takes effect. A statute which increases a party’s liability for past conduct is a retroactive statute. (Myers v. Philip Morris Companies, Inc. (2002) 28 Cal.4th 828, 839 [123 Cal.Rptr.2d 40, 50 P.3d 751].)
The theory against applying a statute retroactively is that parties affected have no notice of a new law affecting conduct already past. (Hughes v. Board of Architectural Examiners (1998) 17 Cal.4th 763, 793 [72 Cal.Rptr.2d 624, 952 P.2d 641].) The California Supreme Court has stated that “ ‘the “principle that the legal effect of conduct should ordinarily be assessed under the law that existed when the conduct took place has timeless and universal appeal.” ’ ” (Myers v. Philip Morris Companies, Inc., supra, 28 Cal.4th at pp. 840-841, quoting Landgraf v. USI Film Products (1994) 511 U.S. 244, 265 [128 L.Ed.2d 229, 114 S.Ct. 1483].) California courts presume that statutes operate prospectively unless the Legislature clearly manifests its contrary intent. The presumption of prospective application of a statute will govern unless: (1) the statute contains an express retroactivity provision; or (2) extrinsic sources make it very clear that the Legislature must have intended retroactive application. (Myers v. Philip Morris Companies, Inc., supra, 28 Cal.4th at p. 841.)
“A corollary to these rules is that a statute that merely clarifies, rather than changes, existing law does not operate retrospectively even if applied to transactions predating its enactment.” (Western Security Bank v. Superior Court (1997) 15 Cal.4th 232, 243 [62 Cal.Rptr.2d 243, 933 P.2d 507], italics omitted.) “Such a legislative act has no retrospective effect because the true meaning of the statute remains the same.” (Ibid.) Where an unmistakable substantive change in the law has occurred, however, the court is not bound to accept a legislative statement that an amendment merely clarifies and restates the original statutory terms. (Riley v. Hilton Hotels Corp. (2002) 100 Cal.App.4th 599 [123 Cal.Rptr.2d 157], citing California Emp. etc. Com. v. *331Payne (1947) 31 Cal.2d 210, 214 [187 P.2d 702]; Jarvis v. Cory (1980) 28 Cal.3d 562, 570 [170 Cal.Rptr. 11, 620 P.2d 598]: “[W]here a declaration is in irremediable conflict with a statute’s substantive provisions, courts will not blindly bow to the Legislature’s stated interpretation.”)
The question in this case is whether the Legislature, in enacting Assembly Bill No. 76, construed and clarified the meaning and application of existing law or substantively changed it.
B. The Presumption That Statutory Amendments Have Prospective Effect Governs This Appeal
i. Assembly Bill No. 76 Substantively Changed Section 12940, Subdivision (j)(l) by Expanding the Scope of Employer Liability for Sexual Harassment
Abundant evidence shows that Assembly Bill No. 76 did not construe and clarify existing law, and instead substantively revised section 12940, subdivision (j)(l) to expand the scope of employer liability for sexual harassment.
The two new sentences in Assembly Bill No. 76 derive from an Equal Employment Opportunity Commission (EEOC) regulation concerning sexual harassment. (29 C.F.R. § 1604.11(e) (1972).) In 1984, the Legislature incorporated other parts of this EEOC regulation into section 12940, subdivision (j)(l).4 The Legislature’s 1984 amendments, however, did not incorporate the two sentences from the EEOC regulation Which Assembly Bill No. 76 has now added to section 12940, subdivision (j)(l). Those two sentences did not appear in subdivision (j)(l) until Assembly Bill No. 76 added them, and previous versions of subdivision (j)(l) provided no basis for inferring their presence. That the Legislature rejected the option of incorporating these two sentences in 1984, and did not incorporate them into the statute until it enacted Assembly Bill No. 76 in 2003, constitutes evidence that Assembly Bill No. 76 substantively changed the statute rather than merely clarifying and construing it.
In addition, a bill proposed to the Legislature in 1984 would have made an employer liable for “harassment of an employee or applicant by any person,” not just by co-employees or supervisors. (Sen. Bill No. 2012, as introduced Feb. 16, 1984, italics added.) An amendment to the proposed bill, however, specifically narrowed an employer’s potential liability, and the Legislature ultimately enacted an amended version of the bill prohibiting “[h]arassment of an employee or applicant by an employee.” (Stats. 1984, ch. 1754, § 2; *332italics added.) Notably, the author of the 1984 statute, Senator Diane Watson, specifically acknowledged that the statute enacted did not make employers liable for customer harassment. In 2003, Assembly Bill No. 76 broadened employers’ liability by specifying that pursuant to subdivision (j)(l), an employer may now be responsible for “the acts of non-employees, with respect to sexual harassment of employees.” (Italics added.) By adding sexual harassment of employees by nonemployees, such as customers and clients, to section 12940, subdivision (j)(l), Assembly Bill No. 76 newly expanded the scope of employer liability.
Assembly Bill No. 76 significantly revises section 12940, subdivision (j)(l) in another way. Former section 12940, subdivision (j)(l) and (3) did not distinguish between various forms of harassment. These statutes made it an unlawful employment practice for another employee, or for an employer, to harass an employee because of race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, marital status, sex, age, or sexual orientation. By comparison to this broad liability for any form of prohibited harassment by an employer or an employee, Assembly Bill No. 76 singles out sexual harassment and makes an employer responsible only for a nonemployee’s sexual harassment of an employee. Former section 12940, subdivision (j)(l) did not treat sexual harassment differently from the numerous other forms of prohibited harassment; Assembly Bill No. 76 does, and thus does more than simply construe and clarify existing law. By imposing new duties and obligations on employers, Assembly Bill No. 76 added a new basis of employer liability for sexual harassment by a nonemployee, such as a client or customer.
Assembly Bill No. 76 also added new conditions which apply only to employer responsibility for nonemployees’ sexual harassment of employees. Assembly Bill No. 76 did not apply these conditions to other forms of harassment by nonemployees. When it made employers responsible for nonemployees’ sexual harassment, Assembly Bill No. 76 required that the employer, or its agents or supervisors, knew or should have known of the conduct and failed to take immediate and appropriate corrective action. Assembly Bill No. 76 also added the element of the employer’s control and other legal responsibility to nonemployees’ conduct by stating, in section 12940, subdivision (j)(l): “In reviewing cases involving the acts of nonemployees, the extent of the employer’s control and any other legal responsibility which the employer may have with respect to the conduct of those nonemployees shall be considered.” Again, the Legislature treated sexual harassment differently. Further, these new requirements and conditions upon employer responsibility were not present in and could not be inferred from prior section 12940, subdivision (j)(l). These additions in Assembly Bill No. 76 constituted a substantive change and not a clarification.
*333ii. The 2003 Legislature Cannot Validly Declare the Intent of a Previous Legislature in Enacting the 1984 Amendment
“[W]hen the Legislature declares that an amendment is intended simply to ‘clarify’ the meaning of a preexisting version of a statute, such a declaration is not determinative as to the meaning of the earlier version.” (People v. Cruz (1996) 13 Cal.4th 764, 781 [55 Cal.Rptr.2d 117, 919 P.2d 731].) Determining the meaning of statutes is a judicial function. To determine the scope of an earlier statute, a court must ascertain from pertinent circumstances and considerations whether the later amendment modifies, or clarifies, the earlier provision. (Ibid.)
“The declaration of a later Legislature is of little weight in determining the relevant intent of the Legislature that enacted the law. [Citations.] This is especially true when . . . such declared intent is without objective support in either the language or history of the legislation^]” (Peralta Community College Dist. v. Fair Employment & Housing Com. (1990) 52 Cal.3d 40, 52 [276 Cal.Rptr. 114, 801 P.2d 357].) The length of time between the 1984 amendment and the 2003 amendment suggests that the Legislature’s declaration of its earlier intent should be disregarded. “[T]here is little logic and some incongruity in the notion that one Legislature may speak authoritatively on the intent of an earlier Legislature’s enactment when a gulf of decades separates the two bodies.” (Western Security Bank v. Superior Court, supra, 15 Cal.4th at p. 244; see also People v. Hubbart (2001) 88 Cal.App.4th 1202, 1233 [106 Cal.Rptr.2d 490], and People v. Martinez (1987) 188 Cal.App.3d 1254, 1259 [233 Cal.Rptr. 877].) That only two legislators who voted on the 1984 amendments also voted on the 2003 amendments underscores this point.5
iii. Legislative History Shows That Assembly Bill No. 76 Substantively Changed Section 12940, Subdivision (j)(l)
a. The Legislative Counsel Described Assembly Bill No. 76 as a “Revision” of Prior Law
Digests of the Legislative Counsel are relevant because it is reasonable to infer that members of the Legislature considered them when voting on a proposed statute. (Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 45-46, fn. 9 [77 Cal.Rptr.2d 709, 960 P.2d 513].) The Legislative *334Counsel’s Digest of Assembly Bill No. 76 stated: “Existing law makes it an unlawful employment practice for [an employer] ... or any person acting as an agent of such an employer, directly or indirectly, who knows or should have known of harassment of an employee ... by an employee, to fail to take immediate and appropriate corrective action and to take all reasonable steps to prevent harassment based upon specified categories from occurring.” The Legislative Counsel’s Digest summarized the effect of Assembly Bill No. 76: “This bill would revise the provision summarized in the first paragraph above to include sexual harassment by nonemployees if the employer knows or should have known of the incident and fails to take corrective action.” (Italics added.) The Legislative Counsel’s Digest recognizes that Assembly Bill No. 76 substantively changed the law.
b. Amendments While Assembly Bill No. 76 Was Pending Limited Employer Responsibility to Sexual Harassment by Nonemployees
The legislative history also shows that in Assembly Bill No. 76 the Legislature deliberately rejected a broad prohibition against harassment of whatever kind. Instead the Legislature enacted a version of Assembly Bill No. 76 which limited an employer’s potential liability to sexual harassment of employees by nonemployees.
As initially proposed, Assembly Bill No. 76 prohibited all harassment of employees by any person. Early versions of subdivision (j)(l) of Assembly Bill No. 76 referred to employer responsibility for acts “with respect to harassment of employees” and to “[bjarassment of an employee ... by any person.”6 The Legislature, however, rejected this early formulation of Assembly Bill No. 76. On June 19, 2003, the Senate deleted the prohibition against harassment “by any person” and added a sentence stating that “[a]n employer may be responsible for the acts of nonemployees, with respect to harassment of employees . . . .”7 On August 28, 2002, the Senate limited the prohibition against harassment to “sexual harassment.”8 The final version of Assembly Bill No. 76 contained both changes.
The June 19 and August 28, 2003 amendments thus materially changed the initial version of Assembly Bill No. 76 by narrowing employers’ statutory *335liability from broad “harassment by any person” to “acts of nonemployees, with respect to sexual harassment of employees.” The existence of these starkly different substantive amendments precludes any conclusion that Assembly Bill No. 76 clarified and construed existing law.
iv. Ambiguity Concerning the Retroactive Effect of Assembly Bill No. 76 Requires This Court to Construe That Amendment Prospectively
Assembly Bill No. 76 amended only section 12940, subdivision (j)(l). It did not amend section 12940, subdivision (j)(2), which has been in effect since 1984.9 Section 12940, subdivision (j)(2) states: “The provisions of this subdivision are declaratory of existing law, except for the new duties imposed on employers with regard to harassment.” Section 12940, subdivision (j)(2) protects an employer from liability for conduct occurring before enactment of a statute imposing new duties on that employer. Assembly Bill No. 76 does impose new duties on employers with regard to harassment: an employer’s potential liability for nonemployees’ sexual harassment of employees had not previously existed. Subdivision (j)(2) makes it clear that the new duties imposed on employers with regard to harassment in Assembly Bill No. 76 are not declaratory of existing law. Subdivision (j)(2) thus contradicts the Legislature’s declaration that the 2003 amendment construes and clarifies the meaning and effect of existing law. A statute that is ambiguous with respect to retroactive application is construed to be unambiguously prospective. (Myers v. Philip Morris Companies, Inc., supra, 28 Cal.4th at p. 841.) The contradiction between subdivision (¡)(2) and uncodified section 2 of the 2003 amendments creates an ambiguity, which requires this court to construe the 2003 amendments as applying prospectively.
v. To Prevent Unfairness, the Legal Presumption of Prospectivity Should Apply to Assembly Bill No. 76
To give effect to the statement of legislative intent that Assembly Bill No. 76 construed and clarified the meaning and effect of existing law would be to conclude that section 12940, subdivision (j)(l) had always contained the substance of Assembly Bill No. 76 and that Assembly Bill No. 76 should apply to conduct preceding its enactment. However, the majority concedes that the 1984 statute and later versions of section 12940 before enactment of Assembly Bill No. 76 were ambiguous with regard to employers’ liability for harassment by customers and clients. Thus the prior statute did not clearly give notice to Diversified Paratransit that it would be responsible for sexual *336harassment of Salazar by Diversified Paratransit’s customers or clients. Before enactment of Assembly Bill No. 76, no case law applied section 12940 to hold an employer hable for nonemployees’ sexual harassment of employees. In the absence of clear notice by prior statute or case authority, to apply Assembly Bill No. 76 to conduct preceding its enactment would amount to an unfair change in “ ‘the rules of the game’ ” in the middle of a contest. (Evangelatos v. Superior Court (1988) 44 Cal.3d 1188, 1194 [246 Cal.Rptr. 629, 753 P.2d 585].) Under these circumstances, I would find that Assembly Bill No. 76 applies prospectively only and did not apply to events occurring in 1997. Assembly Bill No. 76 must not “[modify] a legal doctrine on which many persons may have reasonably relied in conducting their legal affairs prior to the new enactment.” (Ibid.)
2. Conclusion
I conclude that the Legislature’s declaration that Assembly Bill No. 76 clarified and construed the meaning and application of existing law does not accurately describe what the Legislature actually did. To the contrary, the circumstances show that the Legislature substantively changed section 12940, subdivision (j)(l). Assembly Bill No. 76 created a new basis of potential employer liability under the Fair Employment and Housing Act which had not formerly existed. By newly encompassing non-employees’ acts of sexual harassment, Assembly Bill No. 76 enlarged a plaintiff employee’s cause of action for sexual harassment against an employer. (Cf. Western Security Bank v. Superior Court, supra, 15 Cal.4th at p. 243.) Assembly Bill No. 76 should apply prospectively only.
I would hold that Assembly Bill No. 76 applies only prospectively, that it therefore does not alter this court’s majority opinion filed on October 28, 2002, and that the judgment for defendants should be affirmed and the order awarding attorney fees to defendants should be reversed.
A petition for a rehearing was denied April 27, 2004, and on April 6, 2004, the opinion was modified to read as printed above.
Unless otherwise specified, statutes in this dissenting opinion will refer to the Government Code.
Section 12940 now states: “It shall be an unlawful employment practice, unless based upon a bona fide occupational qualification, or, except where based upon applicable security regulations established by the United States or the State of California: [f] . . . []□ (j)(l) For an employer, labor organization, employment agency, apprenticeship training program or any training program leading to employment, or any other person, because of race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, marital status, sex, age, or sexual orientation, to harass an employee, an applicant, or a person providing services pursuant to a contract. Harassment of an employee, an applicant, or a person providing services pursuant to a contract by an employee, other than an agent or supervisor, shall be unlawful if the entity, or its agents or supervisors, knows or should have known of this conduct and fails to take immediate and appropriate corrective action. An employer may also be responsible for the acts of nonemployees, with respect to sexual harassment of employees, applicants, or persons providing services pursuant to a contract in the workplace, where the employer, or its agents or supervisors, knows or should have known of the conduct and fails to take immediate and appropriate corrective action. In reviewing cases involving the acts of nonemployees, the extent of the employer’s control and any other legal responsibility which the employer may have with respect to the conduct of those nonemployees shall be considered. An entity shall take all reasonable steps to prevent harassment from occurring. Loss of tangible job benefits shall not be necessary in order to establish harassment.” (Italics added.) The two amended sentences, in italics, derive from an EEOC regulation on sexual harassment. (29 C.F.R. § 1604.11(e) (1972).)
Assembly Bill No. 76 added an uncodified section 2 to chapter 671, Statutes of 2003: “SEC. 2. It is the intent of the Legislature in enacting this act to construe and clarify the meaning and effect of existing law and to reject the interpretation given to the law in Salazar v. Diversified Paratransit, Inc. (App. 2 Dist. 2002) 126 Cal.Rptr.2d 475 [103 Cal.App.4th 131].”
The subdivision now numbered section 12940, subdivision (j)(l) was numbered section 12940, subdivision (i) in 1984.
Senator Byron Sher voted to enact the 2003 amendment, and as a member of the Assembly also voted to enact the 1984 amendment. Senator Tom McClintock voted against the 2003 amendment, but as a member of the Assembly voted in favor of the 1984 amendment.
See Assembly Bill No. 76, introduced December 23, 2002, and amendments dated February 26, 2003, February 27, 2003, and March 11, 2003.
Amendment of June 19, 2003, to section 1 of Assembly Bill No. 76, amending Government Code section 12940, subdivision (j)(l).
With the new language italicized, the August 28, 2003, amendment changed section 12940, subdivision (j)(l) to state, in relevant part: “An employer may also be responsible for the acts of nonemployees, with respect to sexual harassment of employees . . . where the employer, or its agents or supervisors, knows or should have known of the conduct and fails to take immediate and appropriate corrective action.” (Italics added.)
Current subdivision (j)(2) was made part of section 12940 as subdivision (i) (Stats. 1984, ch. 1754, p. 6406). The section was designated subdivision (h)(2) in 1992 (Stats. 1992, ch. 913, § 23.1, p. 4315) and (j)(2) in 1999 (Stats. 1999, ch. 592).