BILL ANALYSIS                                                                                                                                                                                                    Ó






                             SENATE JUDICIARY COMMITTEE
                             Senator Noreen Evans, Chair
                              2011-2012 Regular Session


          AB 1401 (Committee on Arts, Entertainment, Sports, Tourism & 
          Internet Media)
          As Introduced
          Hearing Date: June 21, 2011
          Fiscal: Yes
          Urgency: No
          TW
               

                                        SUBJECT
                                           
                                 Employment:  Minors

                                      DESCRIPTION  

          This bill would establish an Internet Web site permit process to 
          be administered by the Division of Labor Standards Enforcement 
          for the issuance of temporary work permits for minors working in 
          the entertainment industry.  The temporary work permit issued 
          under this bill would enable a parent or guardian of a minor to 
          establish a Coogan Trust Account for the benefit of the minor.  
          This bill would require the Labor Commissioner to place fees 
          received for a temporary minor's entertainment work permit into 
          an Entertainment Work Permit Fund, which funds would pay for the 
          costs of administration of the Internet Web site created under 
          this bill.

                                      BACKGROUND  

          In 1975, the California Labor and Education Codes were 
          overhauled to provide for child labor protections.  (AB 436 
          (McCarthy, Ch. 436, Stats. 1975).)  At that time, provisions 
          were enacted for the employment of children in the entertainment 
          industry, including the requirement of obtaining the written 
          consent of the Labor Commissioner in advance of entertainment 
          industry employment.  (Lab. Code Sec. 1308.5.)  Since 1975, this 
          Labor Code provision has not been substantively amended.

          Children entering into contracts to provide professional 
          entertainment services are subject to the permit requirement.  
          Work permits issued by the Labor Commissioner related to 
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          AB 1401 
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          Media)
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          contracted services are valid for ten days, unless the permit is 
          attached to a trustee's statement evidencing the establishment 
          of a Coogan Trust Account.  (Lab. Code Sec. 1308.9.)  

          Coogan Trust Accounts were established under the Coogan Law in 
          1938 in response to child star Jackie Coogan's plight.  Even 
          though he earned millions as a child, Coogan was surprised to 
          find out when he reached adulthood that he was flat broke, 
          because his mother and stepfather spent all of his money - 
          legally.  Community property laws in California made all 
          earnings of individual members of a family the property of the 
          family, and a child had no control over his or her earnings.  
          Thus, the Coogan Law was passed in order to preserve a portion 
          of the minor's earnings for the minor's use when he or she 
          reaches the age of majority.  In 1999 and 2003, the Coogan Law 
          was amended to provide enhanced protections for a minor's 
          earnings.  (SB 1162 (Burton, Ch. 940, Stats. 1999); SB 210 
          (Burton, Ch. 667, Stats. 2003).)  

          This bill, sponsored by the Screen Actors Guild, would update 
          the current minor's entertainment temporary work permit 
          application process by establishing an Internet Web site 
          administered by the Division of Labor Standards Enforcement for 
          same-day processing of the temporary work permit.  This bill 
          would require the Labor Commissioner to place fees received for 
          a temporary minor's entertainment work permit into an 
          Entertainment Work Permit Fund, which funds would pay for the 
          costs of administration of the Internet Web site created under 
          this bill.

                                CHANGES TO EXISTING LAW
           
           Existing law  requires written consent of the Labor Commissioner 
          for the employment of a minor in the entertainment industry, as 
          specified.  (Lab. Code Sec. 1308.5.)

           Existing law  provides that the written consent of the Labor 
          Commissioner expires after ten days unless a Coogan Trust 
          Account or similar trust account (collectively, Coogan Trust 
          Account) has been established for the benefit of the minor.  If 
          a trustee's statement evidencing the establishment of a Coogan 
          Trust Account is attached to the written consent, then the 
          written consent is valid for six months.  (Lab. Code Sec. 
          1308.9.)

           Existing law  defines a Coogan Trust Account to mean a trust 
                                                                      



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          (Committee on Arts, Entertainment, Sports, Tourism & Internet 
          Media)
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          account established for the purpose of preserving for the 
          benefit of a minor the portion of the minor's gross earnings.  
          (Fam. Code Sec. 6753.)

           This bill  would authorize, prior to the employment of a minor 
          under 16 years of age, the Labor Commissioner to issue a 
          temporary permit to enable the parent or guardian of the minor 
          to apply for written consent for entertainment industry 
          employment of the minor and to establish a Coogan Trust Account, 
          or similar trust account for the benefit of the minor, as 
          follows:
        a temporary permit shall be valid for ten days from the date of 
          issuance; 
        the temporary permit shall not be issued for the employment of a 
          minor if the minor's parent or guardian has previously applied 
          for or been issued a permit by the Labor Commissioner for 
          employment of the minor;
        the Division of Labor Standards Enforcement (DLSE) shall prepare 
          and make available on its Internet Web site the application form 
          for a temporary permit, which must be completed by the applicant 
          and submitted online with the appropriate fee; and 
        upon receipt of the completed application and fee, the DLSE shall 
          immediately issue a temporary permit.
           This bill  would create the Entertainment Work Permit Fund (Fund) 
          in the State Treasury and require the Labor Commissioner to 
          deposit all fees received for temporary entertainment work 
          permits into the Fund.  The funds deposited in the Fund shall be 
          available to the Labor Commissioner, upon appropriation by the 
          Legislature, to pay for the costs of administration of the 
          online minor's temporary entertainment work permit program.

           This bill  would authorize the Labor Commissioner to set the fee, 
          not to exceed $50, for the minor's temporary entertainment work 
          permit in an amount sufficient to pay for the costs associated 
          with the Internet Web site.

                                        COMMENT
           
          1. Stated need for the bill  
          
          The author writes:
          
            Parents of child performers often will obtain an entertainment 
            work permit prior to even auditioning their child for a job.  
            This results in an inefficient and expensive work volume for 
            the Labor Commissioner's office - who issues over 60,000 
                                                                      



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          Media)
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            entertainment work permits for minors annually - which is 
            vastly larger than the pool of actual children working in the 
            industry in need of a permit.

            ÝU]nder the current system, there is no way to obtain a same 
            day work permit.  Instead, a paper application must be 
            presented to the Labor Commissioner's office, and a work 
            permit is mailed back to the applicant.  This process takes up 
            to two weeks to complete.  The delay in obtaining a permit can 
            deny some child performers the ability to work.

            Under AB 1401 parents would be able to apply for their child's 
            first permit online for a temporary permit that will be 
            granted immediately.  This will allow parents to wait to apply 
            for a permit until their child actually has a job - and save 
            the Labor Commissioner many hours of work.  The temporary 
            permit is only valid for 10 days - time to allow the parents 
            to submit the required documentation with their permit renewal 
            application, including . . . Ýe]stablishing a Coogan blocked 
            trust bank account.
          
          2.  This bill would maintain existing trust account protections  

          This bill, sponsored by the Screen Actors Guild, would update 
          the current minor's temporary entertainment work permit 
          application process by establishing an Internet Web site 
          administered by the Division of Labor Standards Enforcement for 
          same-day processing of the temporary work permit.  Existing law, 
          in order for a minor to work in the entertainment industry, 
          requires a permit to be issued by the Labor Commissioner prior 
          to the minor's hiring.  (Lab. Code Sec. 1308.5)  Existing law 
          provides that if a child enters into an entertainment services 
          contract, a Coogan Trust Account must be established into which 
          the child's earnings would be placed for the child's benefit.  
          (Fam. Code Sec. 6750 et seq.)  In order for the temporary work 
          permit to be valid longer than ten days, the trustee (who, in 
          most cases, is the child's parent or guardian) of the Coogan 
          Trust Account must provide a statement that a Coogan Trust 
          Account has been established for the child's benefit.  (Lab. 
          Code Sec. 1308.9.)  A temporary work permit that is attached to 
          a trustee's statement regarding the Coogan Trust Account is then 
          valid for six months. 

          The author reports that the antiquated method of applying by 
          mail for the temporary work permit can take up to two weeks.  In 
          the meantime, the minor would not be able to provide proof of a 
                                                                      



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          Media)
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          valid work permit and would not be hired.  Because of this 
          undesirable result, many parents and guardians are applying for 
          the temporary work permits before the child even auditions for 
          the entertainment job.  Accordingly, the Labor Commissioner is 
          processing far more temporary work permits than are actually 
          needed because the child may or may not be hired after each 
          audition.

          Importantly, this bill would not modify the current requirement 
          for establishment of a Coogan Trust Account.  Once the child 
          enters into an entertainment services contract, the parent or 
          guardian would still be required to open a Coogan Trust Account 
          within ten days of signing the contract.  Further, the parent or 
          guardian would still be required to attach the temporary work 
          permit to the trustee's statement of Coogan Trust Account in 
          order for the child to continue working for the entertainment 
          entity for six months. The current safeguards contained in 
          Family Code Section 6752 protecting the minor's earnings also 
          remain in place under this bill.  In order for the child to 
          receive payment for services rendered, the Coogan Trust Account 
          must be established so that the employer, pursuant to statute, 
          can deposit the minor's earnings into the account.  If the 
          account has not been established, the employer forwards the 
          funds to the Actor's Fund of America (Fund) until the Fund 
          receives proof that the minor's trust account has been 
          established.
          

           Support  :  None Known

          Opposition  :  None Known

                                        HISTORY
           
           Source  :  Screen Actors Guild

           Related Pending Legislation  :  None Known

           
          Prior Legislation  :  

          AB 436 (McCarthy, Ch. 436, Stats. 1975) See Background. 
          SB 1162 (Burton, Ch. 940, Stats. 1999) See Background.
          SB 210 (Burton, Ch. 667, Stats. 2003) See Background.

           Prior Vote  :
                                                                      



          AB 1401 
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          Media)
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          Senate Labor and Industrial Relations Committee (Ayes 4, Noes 1)
          Assembly Floor (Ayes 52, Noes 24)
          Assembly Appropriations Committee (Ayes 12, Noes 5)
          Assembly Labor and Employment Committee (Ayes 5, Noes 1)
          Assembly Arts, Entertainment, Sports, Tourism, and Internet 
          Media Committee (Ayes 7, Noes 1)

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