BILL NUMBER: AB 55	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Gatto

                        DECEMBER 6, 2010

   An act to amend Section 679 of the Unemployment Insurance Code,
relating to unemployment insurance.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 55, as introduced, Gatto. Unemployment compensation: employer:
motion picture industry.
   Existing unemployment insurance law requires any employing unit
that is a motion picture payroll services company, as defined, to be
treated as an employer of a motion picture production worker, as
defined, and to file a statement of intent with the Employment
Development Department. Existing law requires any employment unit
operating as a motion picture payroll services company that quits
business to file with the director a final return and report of
wages, as provided, and to notify the motion picture production
companies and allied motion picture services of its intent to quit
business, as provided. Existing law requires the employing unit's
status to be applied to its affiliated entities, as defined. Existing
law requires the director to notify an entity, as provided, that
does not satisfy the requirements of a motion picture payroll
services company, as provided, of the facts and circumstances upon
which the determination was made. Existing law authorizes the
department to make a specified report to the Legislature. Existing
law repeals these provisions on January 1, 2012.
   This bill would delete the authorization of the department to make
the report and the January 1, 2012, repeal date.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 679 of the Unemployment Insurance Code is
amended to read:
   679.  (a) Notwithstanding Sections 606.5, 621, and 678, for the
purposes of this code, "employer" means any employing unit that is a
motion picture payroll services company  who  
that  pays and controls the payment of wages of a motion picture
production worker for services either to a motion picture production
company or to an allied motion picture services company  .
The motion picture payroll services company must also have filed
  , and files  a timely statement of its intent to
be the employer of motion picture production workers pursuant to
subdivision (b).
   (b) (1) Any employing unit meeting the requirements of a motion
picture payroll services company  , as defined by this
section,  that intends to be treated as an employer of
motion picture production workers pursuant to subdivision (a) shall
file a statement with the department that declares its intent to be
the employer of motion picture production workers, pursuant to this
section, within 15 days after first paying wages to the workers. The
statement shall include identification of  all affiliated
entities as defined by this section   each affiliated
entity  .
   (2) Any employing unit operating as a motion picture payroll
services company as of January 1, 2007, that intends to be treated as
an employer of motion picture production workers pursuant to this
section, shall file a statement with the department that declares its
intent to be the employer of motion picture production workers,
pursuant to this section, by January 15, 2007. The statement shall
include identification of  all affiliated entities as defined
by this section   each affiliated entity  .
   (3) Any motion picture payroll company that quits business shall:
   (A) Within 10 days of quitting business:
   (i) File with the director, a final return and report of wages of
its workers, as required by Section 1116.
   (ii) File all statements required by this subdivision.
   (B) Forty-five days in advance of quitting business, notify
 the   each  motion picture production
 companies   company  and allied motion
picture services  companies  company  ,
with respect to which they have been treated as the employer of the
motion picture production workers, of its intent to quit business.
   (4) The director may prevent a motion picture payroll services
company that fails to file a timely statement  , as required
by this section,  from being treated as an employer of
motion picture production workers, for a period not to exceed the
period for which the statement is required.
   (5) Any statement filed by a motion picture payroll services
company pursuant to this subdivision shall be applied to  all
  each  affiliated  entities 
 entity  of the motion picture payroll services company in
existence at the time the statement is filed.
   (c) For each rating period beginning on or after January 1, 2007,
in which an employer operating as a motion picture payroll services
company obtains or attempts to obtain a more favorable rate of
contributions under this section in a manner that is due to
deliberate ignorance, reckless disregard, fraud, intent to evade,
misrepresentation, or willful nondisclosure, the director shall
assign the maximum contribution rate plus 2 percent for each
applicable rating period, the current rating period, and the
subsequent rating period. Contributions paid in excess of the maximum
rate under this section shall not be credited to the employing unit'
s reserve account.
   (d) (1) On and after January 1, 2007, whenever a motion picture
payroll services company creates or acquires a motion picture payroll
services company, or acquires substantially all of the assets of a
motion picture payroll services company, the created or acquired
motion picture payroll services company shall:
   (A) Constitute a separate employing unit, notwithstanding Sections
135.1 and 135.2.
   (B) Have its reserve account and rate of contributions determined
in accordance with subdivision (e).
   (C) Notify the department of the entity being created or acquired
and the nature of its affiliation to that entity.
   (2) The department may promulgate regulations requiring a motion
picture payroll services company, prior to the creation or
acquisition of a motion picture payroll services company that will be
an affiliated entity, to seek the approval of the department to
apply  the provisions of  this section to the
created or acquired entity.
   (e) When a motion picture payroll services company transfers all
or part of its business or payroll to another motion picture payroll
services company  , as defined by this section,  the
reserve account attributable to the transferor shall be transferred
to the transferee motion picture payroll services company, and the
transferee's rate of contribution shall be determined in accordance
with Section 1052. The transferee shall notify the department within
15 days of the transfer of the business or payroll.
   (f) For purposes of this section  , the following
definitions apply  :
   (1) "Affiliated entity" means any one or more motion picture
payroll services company or companies that are united by factors of
common ownership, management, or control as prescribed by Section
1061.
   (2) "Allied motion picture services company" means any person
engaged in an industry closely allied with, and whose work is
integral to, a motion picture production company in the development,
production, or postproduction of a motion picture, excluding the
distribution of the completed motion picture and any 
activities   activity  occurring thereafter, and
who hires from the same pool of craft and guild or union workers,
actors, or extras as a motion picture production company.
   (3) "Motion picture" means a motion picture of any type, including
 , but not limited to,  a theatrical motion picture, a
television production, a television commercial,  or  a music
video,  or any other type of motion picture 
regardless of its theme or the technology used in its production or
distribution.
   (4) (A) "Motion picture payroll services company" means any
employing unit that directly or through its affiliated entities meets
all of the following criteria:
   (i) Contractually provides the services of motion picture
production workers to a motion picture production company or to an
allied motion picture services company.
   (ii) Is a signatory to a collective bargaining agreement for one
or more of its clients.
   (iii) Controls the payment of wages to the motion picture
production workers and pays those wages from its own account or
accounts.
   (iv) Is contractually obligated to pay wages to the motion picture
production workers without regard to payment or reimbursement by the
motion picture production company or allied motion picture services
company.
   (v) At least 80 percent of the wages paid by the motion picture
payroll services company each calendar year are paid to workers
associated between contracts with motion picture production companies
and motion picture payroll services companies.
   (B) If the director determines that any employing unit is
operating as a motion picture payroll services company but is failing
to comply with any of the provisions of subparagraph (A) of
paragraph (4), the employing unit is subject to determination of the
employer-employee relationship pursuant to this code. When the
director's ruling becomes final, the director may preclude the
employing unit from being classified as a motion picture payroll
services company pursuant to this section for up to three years from
the date of the determination.
   (5) "Motion picture production company" means any employing unit
engaged in the development, production, and postproduction of a
motion picture, excluding the distribution of the completed motion
picture and any activities occurring thereafter.
   (6) "Motion picture production worker" means an individual who
provides services to a motion picture production company or allied
motion picture services company and who, with regard to those
services, is reported under this part as an employee by the motion
picture payroll services company. An individual who has been reported
as an employee by the motion picture payroll services company,
without regard to the individual's status as an employee or
independent contractor, shall be the employee of the motion picture
payroll services company for the purposes of this code throughout the
contractual period with the motion picture payroll services company.

   (7) "Wages" shall have the same meaning given the term in Article
2 (commencing with Section 926) of Chapter 4 of Part 1 of Division 1,
and shall include residual payments.
   (g) If the director determines that an entity does not meet any
 of the requirements specified by   requirement
of  this section, the director shall give notice of its
determination to that entity pursuant to Section 1206. The notice
shall contain a statement of the facts and circumstances upon which
the determination was made. The entity so noticed shall have the
right to petition for review of the director's determination within
30 days of the notice, as provided in Section 1222.
   (h) The director shall prescribe the form and manner of the
statements and information required to be filed or reported by this
section. 
   (i) On or before December 31, 2010, the department may report to
the Legislature regarding the impact of this section on the
Unemployment Insurance Fund and the entertainment industry. 

   (j) This section shall remain in effect only until January 1,
2012, and as of that date is repealed, unless a later enacted
statute, which is chaptered before January 1, 2012, deletes or
extends that date. 
  SEC. 2.  Nothing in this act shall be construed to change existing
law as it relates to employing units that do not elect to be
considered a motion picture payroll services company pursuant to
Section 679 of the Unemployment Insurance Code.