BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 1401
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          CONCURRENCE IN SENATE AMENDMENTS
          AB 1401 (Arts, Entertainment, Sports, Tourism, & Internet Media 
          Committee)
          As Amended  August 15, 2011
          Majority vote
           
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          |ASSEMBLY:  |52-24|(May 26, 2011)  |SENATE: |25-19|(August 22,    |
          |           |     |                |        |     |2011)          |
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           Original Committee Reference:    A.,E.,S.,T., & I.M.  
           
          SUMMARY  :  Establishes a program to be administered by the Labor 
          Commissioner (LC) that would enable a minor's parent or guardian 
          to obtain a temporary permit for the employment of a minor, 
          under specified conditions.  This bill would also authorize the 
          LC to collect and deposit money into the Entertainment Work 
          Permit (EWP) Fund, which the bill creates, and upon 
          appropriation by the Legislature, to expend the proceeds from 
          this fund to pay the costs of administrating the temporary 
          minor's EWP program.  This bill would also authorize the Labor 
          Commissioner, on a one-time basis, to borrow and repay up to 
          $250,000 from the Labor Enforcement and Compliance Fund to the 
          Entertainment Work Permit Fund to pay for startup costs incurred 
          in the creation of the program.

           The Senate amendments  authorize the Labor Commissioner, on a 
          one-time basis, to borrow and repay up to $250,000 from the 
          Labor Enforcement and Compliance Fund to the EWP Fund to pay for 
          startup costs incurred in the creation of the program and 
          require the loan to be repaid as soon as sufficient funds are 
          available in the EWP Fund, provided repayment does not 
          compromise the operations of the temporary work permit program.

           AS PASSED BY THE ASSEMBLY, this bill  :

          1)Provided that prior to the employment of a minor under the age 
            of 16 years, as specified, the LC may issue a temporary permit 
            authorizing employment of the minor.

          2)Declared the purposes of the temporary permit is to:

             a)   Enable a parent or guardian of the minor to meet the 
               requirement for a permit;








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             b)   Establish a trust account for the minor; and,

             c)   Produce the documentation required by the LC for the 
               issuance of a permit.

          3)Established the following conditions for the temporary work 
            permit:

             a)   A temporary permit shall be valid for a period not to 
               exceed 10 days from the date of issuance; and,

             b)   A 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 LC 
               pursuant to Labor Code Section 1308.5, or a temporary 
               permit pursuant to this section for employment of the 
               minor.

          4)Required the Division of Labor Standards Enforcement (DLSE) to 
            prepare and make available on its Internet Web site the 
            application form for a temporary permit. 

          5)Required an applicant for a temporary permit to submit a 
            completed application and application fee online to DLSE.

          6)Required upon receipt of the completed application and fee, 
            DLSE to immediately issue a temporary permit.

          7)Created the EWP Fund in the State Treasury.

          8)Directed the LC to deposit all fees for temporary permits 
            received into the fund. 

          9)Provided that the funds deposited in the EWP Fund shall be 
            available to the LC, upon appropriation by the Legislature, to 
            pay for the costs of administration of the online temporary 
            minor's EWP program.

          10)Allowed the LC to set forth the fee in an amount sufficient 
            to pay for these costs, not to exceed $50.

           FISCAL EFFECT  :  According to the Assembly Appropriations 
          Committee, "The DLSE would incur one-time start-up costs of 
          $50,000 to $100,000 for a contract to establish the online 








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          application and payment system for temporary permits and to 
          implement new procedures to integrate the temporary permit 
          process with the existing EWP system.  These start-up costs 
          would likely be covered by a loan from the Labor Enforcement and 
          Compliance Fund, which would be repaid by revenues from the 
          temporary permit fee.  The bill requires that the temporary 
          permit fee revenues be sufficient to cover program costs.  These 
          revenues, which would depend on the number of applicants and the 
          fee level established by the LC, are unknown.  At the maximum 
          fee of $50 per applicant, around 3,000 annual applications could 
          support the costs for two administrative staff.

          "The current EWP program includes processing about 60,000 
          permits at an annual cost of about $800,000 for 11 positions.  
          As part of the 2011-12 Budget Act, General Fund support for the 
          DLSE was removed and replaced with funding from the 
          newly-created Labor Enforcement and Compliance Fund, which is 
          financed by a surcharge on employers."

           COMMENTS  :  The Senate amendments are technical and clarifying of 
          the existing statutory authority for the LC to borrow from the 
          Labor Enforcement and Compliance Fund for the startup costs 
          incurred in the creation of the temporary minor's EWP program.  
          According to the author, they were taken at the recommendation 
          of the Department of Finance, and address the concerns raised in 
          their analysis of the bill.

           
          Analysis Prepared by  :    Dana Mitchell / A.,E.,S.,T. & I.M. / 
          (916) 319-3450 
                                                               FN: 0002065